DAO NO.10-08 s2010
  Further amending the revised implementing rules and regulations of Act No. 3883, as amended, otherwise known as the Business Name Law.
   
   
   
   
   
   
   
 
   

Frequently Asked Questions

Sales Promotion

What should sponsor / advertiser secure in conducting sales promotion?
1. DTI-NCR number
2. Duration of the promotion
3. Complete mechanics
4. Criteria, disqualification and other rules that maybe imposed by sponsor/s
5. Required entry form
6. Manner, date, place and time for selection or determination of winners
7. Claim period and redemption center
8. Requirements for claiming prizes
9. Tax provisions

What is a DTI-NCR number?
This pertains to the number assigned by the DTI-NCR for approved nationwide sales promotion. This is located at the lower right side of the ad material released by the promoting agency. Presence of this permit number means that the sales promotion has been approved / supervised by DTI-NCR.

What are the coverage of the DTI-NCR permit?
1. all sales promotions campaigns conducted within the Philippines
2. consumer product or services
3. consumer credit
4. consumer service
5. nationwide beauty contest
6. home solicitation sales

Exemptions:
a. sales promotion campaigns sponsored by the government, or any of its agencies, in line with its government functions
b. imported products under promotion in the country of origin not covering the Philippines
c. civic groups sponsored intended among members
*Food, drugs, devices, cosmetics, and hazardous substances are covered by Bureau of Food and Drugs (BFAD).

What do you mean by duration of the promotion?
This means the period covering the first to the last day that a participant may join or send or present entries to a sales promotion campaign.

Shall cancellation of a sales promotion be allowed?
An ongoing sales promotion should not be allowed to be cancelled, except upon approval from the DTI-NCR. Cancellation shall be allowed only before the ad announcement, and, in case ad announcement is already released, before entries are made available to the public.

On what grounds shall cancellation of ongoing promotion be allowed?
Cancellation of ongoing promotion may be allowed on any of the following grounds:
1. final judgment of insolvency of the sponsor/s from a court of proper jurisdiction
2. occurrence of any fortuitous event that will make it impossible for all sponsors to deliver the products or services to be used in the promotion

If a promotion is approved to be cancelled and there are already winners before the approval, do the winners have the right to claim their prizes?
Yes. Those who had already won in the promotion before the approval of its cancellation shall be granted their prize/s.

What is a complete mechanics?
This means the rules, procedure and criteria by which one may participate and win and by which the winner may claim his prize in a sales promotion campaign.

Who shall be disqualified from joining a sales promotion?
1. The sponsor, promoter, advertiser, participating outlets and their employees including their relatives up to the second civil degree of consanguinity or affinity.
2. Persons reporting regularly to the promoter, sponsor or advertiser under a contract or service and who, by the nature of the service they render may have a direct and personal knowledge of the promotion
3. In case of promotions involving bank deposits, the Bangko Sentral ng Pilipinas (BSP) shall prescribe the degree of relationship whch shall be covered by the disqualification.

What is a required entry form?
This may be any proof of purchase, receipts, coupons, tickets, wrappers, labels, packaging, caps, crowns, raffle numbers, game cards or any other instrument identifying the participant and conforming to the specifications or requirements as laid down in the mechanics.

What minimum information should be written on the raffle stub?
1. Full name of participant
2. Complete address, and telephone number, if any
3. Signature

*Erasures or any form of tampering shall invalidate the entry stub / form.

When should the selection or determination of winners take place?
The date of draw shall not be more than two (2) weeks after the deadline of submission of entries.

Can grand draws or final selection of winners be postponed?
Grand draws or final selection of winners may only be postponed once, but not more that 2 weeks upon the approval of DTI-NCR.

Can a participant win more than once?
A participant may win more than one prize, unless expressly disallowed in the mechanics of the promotion.

If a participant won more than once, can he claim both prizes?
If winning more than once is disallowed in the mechanics of the promotion. The winner shall be entitled to the bigger prize.

If the winner is not present to choose the prize, what prize shall be given to him?
The winner shall automatically be assigned the higher prize.

What shall be done to the lower prize not won by disqualified winner?
The prize shall be re-drawn or other winners will be selected.

How does fairness on the conduct of the sales promotion be guaranteed?

  1. The DTI representative would be present and will verify guarantee of delivery of: the mechanics, entry forms, prizes, advertising materials and control measures approved prior to issuance of permit
  2. A DTI representative must be invited to the following sales promotion activities prior to implementation:
    1. Verify computer program for registering participants, accepting entries, assigning raffle numbers / points and tabulation of points.
    2. Verify computer program for determination / drawing of winners.
    3. Witness the printing, sealing and seeding of game cards with non-winning game cards.
    4. Verify the winning game stubs before mixing with non-winning game stubs before placing inside draw boxes.
    5. Verify game paraphernalia.
  3. A DTI representative must be invited to be present and witness the following:
    1. Opening of drop boxes and drawing / determination of winners
    2. Judging of entries

How are winners of a raffle promo being notified?
Winners should be announced and / or published in the same manner that the sales promotion was announced and / or published, not later than 2 weeks after determination of winners.

Shall all winners be notified in writing?
In all cases where the amount of the prize is five hundred pesos (P 500) or more, the winners shall be notified in writing by registered mail or any communication where proof of notice can be verified. The list of winners' names and addressed received by the Post office shall be submitted to DTI.

Until when can winners claim their prizes?
Winners shall have at least sixty (60) days from the date of the publication or announcement or notification of winners, whichever comes last, within which to claim their prizes unless a shorter period is allowed by the department taking into account the nature of the sales promotion, mechanics and prizes involved.

Will prizes be forfeited after claim period has lapsed?
Yes. After the claim period has lapsed without a claimant, the Department shall be immediately informed. Prizes may be forfeited in favor of the sponsor only upon written approval of the Department.

How shall winners of raffles or promotions requiring raffle tickets or stubs claim their prizes?
Winners of this type of promotions may claim their prizes by presenting their copy or portion of the raffle ticket or stub and / or any document which the sponsor may reasonably require as sufficient to establish the identity of claimant.

Can a winner claim his prize if his raffle stub is lost?
Yes. If a raffle stub is lost, the winner will execute an affidavit of loss. He should submit this together with any of the following documents:

1. affidavit of at least two (2) disinterested persons attesting to his identity
2. certification of the barangay captain that the winner is really a resident of that place
3. other identification papers like office / school ID, SSS or GSIS number, driver's license, passport, etc.

How can a minor or incapacitated claim his prize?
In case where a winner is a minor as evidenced by a birth certificate or is incapacitated, the parent or guardian exercising paternal authority over him may claim the prize in his behalf.

If prizes are in form of trips or scholarships, can the winners ask for these prizes to be converted / transferred?
Prizes in form of domestic or domestic trips and with or without accommodations and scholarships, shall either be transferable, convertible to cash or both. In such cases, the cash equivalent of the prize shall be disclosed in the sales promotion campaign announcements, publications and advertisements.

What is the remedy available for the winner when the sponsor failed to deliver a prize which is in kind?
In cases where the sponsor is not able to deliver a prize promised which is n kind, the winner may be given its cash equivalent as appearing in the application for permit to conduct the promotion and approved by the department. However, if the sponsor offers to deliver another prize which is also in kind, he may do so with the consent of the winner.

Who should pay the tax for the prizes?
Unless otherwise specified, the winner shall pay withholding tax.

How much withholding tax shall be paid?
The amount of tax shall be 20% (in excess of P 10,000.00) of the acquisition cost of the prize.

What must a person do if he/she intends to conduct a sales promotion?
Any person intending to conduct any form or scheme for a sales promotion campaign of a consumer product, service, or credit shall first secure a permit from DTI-NCR at least thirty (30) days before the sales promotion starts.

What is the requirement if a sales promotion campaign has several sponsors?
A sales promo campaign with several sponsors may be filed for a single sales promotion permit. Provided, that all sponsors shall sign the sales promotion permit application, or submit a true copy of written agreement among the sponsors that they are the subsidiaries of the sales promotion campaign.

What is the degree or extent of a sponsor's participation and responsibility?
The degree or extent of a sponsor's participation and responsibility may be stated in the application or the agreement. When there's no indicated limitation of liability or responsibility, each sponsor shall be deemed fully responsible for the sales promotion campaign.

What specific information should be included in the application?
The application for permit to conduct a sales promotion campaign shall be in the form required by the Department, containing the following information and documents:

  1. the complete name, address, and telephone number of the sponsor(s) of the sales promotion campaign;
  2. the complete name, address, and telephone number of the sales promotion agent or agency, if any;
  3. the complete name, address, and telephone number of the person/s who may be contacted by the participants of the promotion for inquiries, complaints, and similar purposes;
  4. the consumer product, its brand, classification and/or size, or the kind and extend of the consumer service or credit to be promoted;
  5. proof of registration of the product, or business being promoted if the same is required by any government agency;
  6. the geographical area to be covered;
  7. the type or nature of the sales promotion campaign to be undertaken;
  8. the sales promotion period;
  9. the target participants and the required qualification, if any;
  10. the type of announcement and/or information dissemination that will be used for the sales campaign or promotion, including the text, substance, and information to be disseminated to the public;
  11. the mechanics and the criteria for participating and winning in the sales promotion campaign;
  12. the procedure for predetermination of winning entries, and if applicable, the computer program to be used;
  13. the plan for seeding or qualifying entries, paraphernalia or predetermined winning entries;
  14. the date, time, and place for auditions, try-outs, pre-qualification and/or qualification of participants to the promotion, if the same is required;
  15. the security marks, if any, or the nature thereof in the entry forms and/or paraphernalia to be used in the promotion. Their purpose, the method of their verification, and a sample specimen of such entry or paraphernalia, containing such security mark;
  16. the deadline of submission of entries
  17. the specific city, municipality, and province and number of drop boxes or the person and address where entry forms may be sent;
  18. the amount of prizes for each category of winners. If the prizes are in kind, the description, brand, size, model, or make, and their market value of the time of application;
  19. whether a prize in kind is transferable, convertible to cash or both;
  20. whether the required taxes for the winners shall be shouldered by the sponsor/s or by the winners. In case of the latter, whether the same shall be withheld by the sponsor/s;
  21. time and dates within which the prize can be claimed, after the termination of the sales campaign or promotion- which shall not be less than sixty (60) days from notification or publication, whichever comes last;
  22. the requirements and/or the type of identification which will be required to claim the prizes

Are there exemptions from permit requirements?
Permits for the following sales promotion activities need not be applied for:
1. Competitions, except beauty contest conducted nationwide, which do not require the purchase, lease or payment of any consumer product or service or availment of consumer credit;
2. Parlor games, whether held live during stage shows, parties, special occasions and/or utilizing any form of mass media. Provided, that the home partner of the winner is not required to purchase or lease any consumer product, service, or avail consumer credit facility, including the sending or presentation of any proof;
3. Door prizes given to patrons of concerts, stage shows, stage plays, film shows, and similar activities;
4. Instant sales promotion campaigns;
5. In store promotions, such as, but not limited to price reduction promotions, discount sales and premium-in pack in which no advertisements are made on such sales promotion campaigns.

*Sales promotion campaign exempted from permit requirement must conform to the pertinent rules and regulations on sales promotion campaigns.

What are the prohibited acts in the conduct of sales promotion?
1. Gambling and wagering schemes: No gambling or wagering scheme, as prohibited under existing laws shall be allowed in the conduct of any sales promotion campaign.
2. Use of Medical Prescriptions: No sales promotion campaign using medical prescriptions or any part of it, as attachment shall be allowed.
3. Other prohibited activities:
  a. No act, product, scheme, or activity prohibited or declared illegal under the law shall be allowed in the conduct of the sales promotion campaign. If an imported product is under international sales promotion, yet such promotion does not cover the Philippines, the local distributor of the product shall indicate a notice, accompanying the product that the ongoing international sales promo campaign is not applicable in the Philippines.
  b. No person shall directly or indirectly tamper with the entries and/or paraphernalia in a sales promotion campaign nor influence the results, or perform any act to the disadvantage of the legitimate participants and/or winners.

May an approved sales promotion campaign be discontinued or cancelled?
An approved sales promo campaign may be terminated or cancelled by the sponsor/s at its initiative, provided that no information dissemination and advertising were made. Written notice must be sent to the Department before the cancellation of the sales promotion campaign.

Can a sales promotion be cancelled after publication, but before the promotion starts?
If any announcement, information, dissemination, or advertising were made, and the promotion has not yet started, the sale promotion may be cancelled or terminated by written notification to the Department. Announcements of the cancellation must be immediately disseminated in the same manner, frequency, and medium as the promotion has been announced, published, or advertised before the originally intended promotion period starts.

How is voluntary cancellation of ongoing promotion made?
Only DTI can permit the cancellation of ongoing sales promotion. An ongoing sales promotion may only be cancelled based on the following grounds:
1. A final judgment of bankruptcy of the sponsor/s from a court of proper jurisdiction;
2. Unexpected events that will make it impossible for all the sponsors to continue to deliver the products or services. Provided, however, that those who had already won in the promotion before approval of its (sales promo) cancellation shall be given their prizes.

What specific information should be included in the announcements, publication or advertisement of the mechanics of the sales campaign?
The time, dates, and places of the following events in the sales promotion campaign shall be clearly stated in the announcement, publication, or advertisement of the mechanics of the sales campaign:

1. The promotion period;
2. The deadline for submission of entry forms or entering as participant in the promotion;
3. The location of drop boxes for entry forms and/or the address where entry forms may be sent, or where one may inform the sponsor of one's intention to participate in the promotion;
4. The time, date, and place of the pre-draws, pre-qualifications, try-outs, or auditions to qualify as participant to the sales promotion;
5. The time, date, and place of preliminary draws, preliminary selection or predetermination of winners of the promotion;
6. The time, date, and place of final draws or final determination of winners of the promotion;
7. The time, duration, and place where prizes may be claimed by the winners.

What are the other requirements for a sales promotion campaign?
1. Availability of entry forms to participants: Entry forms shall be made available in a specific place, during office or store hours, unless other ways of obtaining them are specified in the mechanics of the promotions.
2. Deadline of submission of entries: The deadline of submission of entries shall be at least one (1) day before the date of the draw or selection of winners unless, otherwise, the scheme utilized makes the one (1) day period impractical.
3. Draw dates, date of selection of winners: Draw dates or the date for the selection of determination of participants or winners to a sales promo campaign shall not be more than two (2) weeks after the deadline of the submission of entries, the pre-qualification, audition, or try-out,
4. List of winners: A list of the names of the winners, their addresses and corresponding prizes, shall be furnished to the Department immediately after they were drawn or selected. Except in the case of sales promotion campaigns involving prizes with very small monetary value, or those exempted from applying for a permit.

When is the presence of participants required in the selection of winners?
The presence of participants shall not be required in the determination of winners of any sales promotion campaign except in the following cases: 1. Instant sales promotion;
2. In the case of competitions, games or parlor games where the presence of the participants is essential to determine the winner; and
3. Such other forms of sales promotion campaigns, the nature of which demand the presence of the participants;

What is the general rule on the duration and extension of promotion period?
The sales promotion campaign shall have a duration of not more than a year, may be extended to a maximum of six (6) months upon approval by DTI-NCR.

May a sponsor or promoter make some changes in the conduct of sales promotion without the knowledge and approval of DTI?
No. Any changes on the conduct of sales promotion such as extension or delay in the dates of the starting; termination and determination of selection of winners; venue of draws, auditions, and try-out; duration, mechanics, procedures or terms and conditions of sales promo campaigns; qualifications required of the participants; criteria in the determination and selection of winners cannot be made without the knowledge and approval of DTI. Changes shall be published, announced or advertised at least twice before such change takes effect.

What is the rule on the postponement of extension of grand draws or final selection of winners?
Grand draws or final selection of winners may only be postponed once, and shall be held within the next two (2) weeks after the date of the previously scheduled grand draw.

When can a winner claim his prize?
A winner shall have at least sixty (60) days from the date of publication, announcement, or notification of winners to claim his prize.

How long can a sponsor hold price reduction promotions?
Any price reduction promotion on any consumer product or service shall not exceed three (3) months. However, in case of closing-out sales, the period shall be six (6) months.

In a price reduction promotions with a period, is the use of the phrase “while supply lasts” allowed?
No. The sponsor shall be liable throughout the promotion to ensure the supply is sufficient until the end of the promotion period.

What is the liability of the sponsor / promoter in case the prize was mistakenly given to a holder presenting a fake form?
The sponsor who committed a mistake by giving the prize to a holder presenting a fake entry form, should give the same prize to the holder of the genuine entry form.

What is the rule in disseminating / advertising information regarding sales promotions campaign?
All advertising / information materials indicating or describing the mechanics of the promotion shall conform with the mechanics approved by DTI. Sales promo campaigns shall include in their advertisement, publication, or announcement the phrase “Per DTI-NCR Permit No. ___, Series of (Year)” with the corresponding control number provided by the DTI.

Can prizes, premium or benefit under a sales promotion campaign be reduced in quality and quantity?
No reduction in quality or quantity in the product or services under sales promo nor in the prizes, premium or benefit granted shall be allowed.

What are the guaranties, warranties and remedies available to consumers under a sales promotion campaign?
Buyers of products and services sold under a sales promotion, as well as winners, with reference to their prizes shall enjoy the same guaranties, warranties, and remedies provided for under R.A. 7394 or the Consumer Act of the Philippines and other pertinent laws.

What are the sanctions for violation of these provisions?
Any of the following administrative sanctions provided under Article 164 of the Consumer Act of the Philippines may be imposed even if not asked in the complaint:
1. issuance of cease and desist order
2. undertaking of compliance from the respondent;
3. imposition of administrative fines ranging from five hundred pesos (P 500.00) to three hundred thousand pesos (P 300,000.00)