Regulations on sales promotion under the Commercial Law in Vietnam

Regulations on sales promotion under the Commercial Law in Vietnam (Internet image)

1. What is Sales promotion?

According to Article 88 of the Commercial Law 2005, sales promotion means activities of commercial promotion conducted by traders to promote the purchase and sale of goods or the provision of services by offering certain benefits to customers.

Traders conducting sales promotion are those falling into one of the following cases:

- Traders directly conduct sales promotion for goods and/or services that they trade in;

- Traders engaged in providing sales promotion services conduct sales promotion for goods and/or services of other traders under an agreement with the latter.

2. Forms of sales promotion according to the Commercial Law in Vietnam

The forms of sales promotion under the Commercial Law 2005 include:

- Giving samples of goods or providing samples of services to customers for trial use free of charge.

- Gifting goods as gifts or providing free-of-charge services to customers.

- Selling goods or providing services at prices lower than goods sale prices or service provision charge rates previously applied during the period of sales promotion already registered or announced. In case of goods or services subject to the State management over their prices, the sales promotion in this form shall comply with regulations of the Government.

- Selling goods or providing services together with coupons that allow customers to enjoy one or several benefits.

- Selling goods or providing services together with prize-contest entrance tickets to customers, for purpose of selecting prize winners according to the rules and prizes already announced.

- Selling goods or providing services together with opportunities for customers to participate in games of chance, the participation in which comes after the purchase of goods or services and the winning of prizes depends on the luck of participants according to the rules and prizes already announced.

- Organizing programs for frequent customers whereby gifts are presented to customers on the basis of the quantities or values of goods purchased or services used by such customers and expressed in forms of customers’ cards, coupons acknowledging the purchase of goods or services, or other forms.

- Organizing cultural, artistic or entertainment programs or other events for customers for the purpose of sales promotion.

- Other forms of sales promotion if approved by the State management agency in charge of commerce.3. Information must be publicly announced in promotional activities.

3. Information that must be publicly notified in Vietnam

- For all forms of sales promotion specified in Section 2, traders conducting sales promotion must publicly notify the following information:

+ Names of sales promotion activities;

+ Sale prices or charge rates of sales promotion goods or services and related costs for delivery of sales promotion goods or services to customers;

+ Names, addresses and telephone numbers of traders conducting the sales promotion;

+ Sales promotion duration, the starting date and ending date and area of sales promotion activities;

+ Where benefits of the participation in sales promotion depend on specific conditions, notices must clearly state that such sales promotion activities are conditional and specific conditions.

- Apart from the information defined in Clause 1 of this Article, traders shall also publicly notify the following sales promotion-related information:

+ Sale prices of goods or charge rates of services given as gifts to customers, for the form of sales promotion mentioned in Clause 2, Article 92 of this Law;

+ Absolute value or discount percentage of normal prices of goods, or normal charge rates of services before the sales promotion duration, for the form of sales promotion specified in Clause 3, Article 92 of this Law;

+ Monetary values or specific benefits of coupons which customers are entitled to enjoy; places of sale of goods or provision of services as well as types of goods or services which customers may receive from coupons, for the form of sales promotion specified in Clause 4, Article 92 of this Law;

+ Types of prize and value of each prize; rules for participation in sales promotion programs, method of selecting prize-winners, for the form of sales promotion as follows:

++ Selling goods or providing services together with prize-contest entrance tickets to customers, for purpose of selecting prize winners according to the rules and prizes already announced.

++ Selling goods or providing services together with opportunities for customers to participate in games of chance, the participation in which comes after the purchase of goods or services and the winning of prizes depends on the luck of participants according to the rules and prizes already announced.

+ Expenses which must be borne by customers, for the form of sales promotion as follows:

++ Organizing programs for frequent customers whereby gifts are presented to customers on the basis of the quantities or values of goods purchased or services used by such customers and expressed in forms of customers’ cards, coupons acknowledging the purchase of goods or services, or other forms.

++ Organizing cultural, artistic or entertainment programs or other events for customers for the purpose of sales promotion.

(Article 97 of the Commercial Law 2005)

4. Prohibited acts in sales promotion activities in Vietnam

- Conducting sales promotion for goods and services banned from business; goods and services subject to business restrictions; goods not yet permitted for circulation; and services not yet permitted for provision;

- Using, for sales promotion purpose, goods and services which are banned from business; goods and services subject to business restrictions; goods not yet permitted for circulation; and services not yet permitted for provision;

- Conducting sales promotion for alcohol and beer, or using alcohol and beer for sales promotion targeted at under-18 people;

- Conducting sales promotion for, or using cigarette or alcoholic beverages having at least 15% ABV for sales promotion in any form;

- Conducting untruthful or misleading sales promotion for goods and services so as to deceive customers;

- Conducting sales promotion for selling inferior-quality goods, causing harms to the environment, human health and other public interests;

- Conducting sales promotion at schools, hospitals or offices of state agencies, political organizations, socio-political organizations and people’s armed forces units;

- Promising to present gifts or prizes but failing to do so or doing it improperly;

- Conducting sales promotion for purpose of unfair competition;

- Conducting sales promotion with the value of sales promotion goods and/or services exceeding the maximum limit or the maximum discount rate of sales promotion goods and services mentioned in Clause 4, Article 94 of Commercial Law 2005.

(Article 100 of the Commercial Law 2005, as amended by Point a, Clause 3, Article 35 of the Law on Prevention and Control of Harms of Alcohol, 2019)

Diem My

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