Reward for customers giving feedback - legal issues?

[BBYeah]

For a website selling widgets, would there be any issue having a note by the feedback / cancel order box saying:

"To help us improve our service, each month the most helpful explanation of reasons for not purchasing from us will be sent a £20 cheque."

Has anyone seen any businesses doing this? I wondered if it may be subject to competition laws or something.

[Eric Mc]

Watch for any VAT implications.

Although it seems strange to reward perople for NOT doing business with you.

Edited by Eric Mc on Sunday 5th December 11:37

[BBYeah]

It's for the information on why they've decided not to and it's only the chance of being paid, rather than every person gets money. The aim is to hopefully increase conversions in the future.

What could the VAT implications be do you think? Wouldn't it just come under marketing expenses.

Edited by BBYeah on Sunday 5th December 11:42

[Eric Mc]

There are special VAT rules on "gifts" and "freebies".

Have a look on what the HMRC website says.

Also, if it has a competition aspect to it, you might need to apply for a competition licence of some sort.

Edited by Eric Mc on Sunday 5th December 12:01

[DSLiverpool]

Or spend the money on sales track that will tell you where people click away from your pages ?

We have a price beater next to the price box inviting people to call if they have seen a better deal, if we get two a week its a lot

[TooLateForAName]

I've certainly received freebies for giving feedback.

Rock&Run do a regular scheme where people who review items that they sell get freebies. I got a WC friend free.

[BBYeah]

Thanks everyone for the feedback, very helpful.

[StevieBee]

The way you have worded it suggests that you will apply judgement to determine a reward. In this context, it would fall under the same rules that govern other lotteries, gaming and competition. Broadly speaking, this means that you will have to set out and publish the rules and the basis upon which you will be judging.

You can't simply say "That was a good bit of feedback - here's £20!" You have to say why it was and show transparent scoring methods.

Two better options would be:

1. Prize Draw - all those who provide feedback are entered into a monthly draw to win.....! The only condition on this is that there is no cost of entering the draw

2. Incentive Scheme - simply offer something (not cash money) for each feedback. Danger here is that people may keep giving feedback to get the reward so will need careful management and capping.

HTH