37-32-1. Definition of terms. Terms used in this chapter mean:

(1) "Prize," any gift, award, or other item or service of value that is different and distinct from the goods, service, or property promoted by a sponsor and requires payment to the sponsor for the prize. Prize does not include an item offered in a promotion if all of the following elements are present:

(a) No element of chance is involved in obtaining the item offered in the promotion;

(b) The recipient has the right to review the merchandise or services for at least seven days and has a right to obtain a full refund in thirty days for the return of unused and undamaged merchandise or cancellation of unused services;

(c) The recipient may keep the item offered in the promotion without obligation; and

(d) The recipient is not required to attend any sales presentation or spend any money in order to receive the item offered in the promotion.

Prize does not include an item offered in a promotion for a book, recording, video, multimedia, or similar club in compliance with 16 CFR 425 or a continuity plan or single sale of merchandise where there is no minimum purchase required;

(2) "Prize notice," any notice given to an individual in this state that contains a representation that the individual has won or will receive a prize and conditions receipt of such prize on payment to the sponsor for the prize. A prize notice also includes a notice which requires or invites the individual to make a contact by telephone or in-person interview to learn how to receive the prize or to obtain other information related to the notice. Prize notice does not include a notice informing the individual that the individual has been awarded a prize as a result of the individual's actual prior entry in a game, drawing, sweepstakes or other contest, if the individual is awarded the prize stated in the notice;

(3) "Solicitor," any person who represents to an individual that the individual has won or will receive a prize;

(4) "Sponsor," any person on whose behalf a solicitor gives a prize notice;

(5) "Verified retail value," the price at which the solicitor or sponsor can demonstrate that a substantial number of the prizes have been sold by a person other than the solicitor in the trade area in which the prize notice is given, or no more than one and one-half times the amount the solicitor or sponsor paid for the prize.Source: SL 1997, ch 223, § 1.