In a competitive business environment, it is essential to carry out commercial promotion activities including sale promotion activities to attract customers to use products and services. So when traders implement their sale promotion, what provisions of the law shall they comply with? Let’s join Lawyer X to find out through the following situation: “Howdy Lawyer! As far as I know, enterprises do not conduct sale promotion activities arbitrarily but obey to certain legal regulations. My enterprise is considering some forms of sale promotion to pay tribute to customers in Viet Nam. Looking forward to your consulting about some types of sale promotion as well as legal regulations related! Thank you, lawyer! “
Legal grounds
Commercial Law 2005
What is commercial promotion? What is sale promotion?
Commercial promotion means activities of promoting and seeking opportunities for the purchase or sale of goods and provision of services, including sale promotion, commercial advertisement, display and exhibition of goods and services, and trade fairs and exhibitions.
Sale 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 sale promotion are those falling into one of the following cases:
– Traders directly conduct sale promotion for goods and/or services that they trade in;
– Traders engaged in providing sale promotion services conduct sale promotion for goods and/or services of other traders under an agreement with the latter.
Provision of sale promotion services means commercial activities whereby a trader conducts sale promotion for goods and/or services of other traders on a contractual basis. Sale promotion service contracts must be made in writing or in other forms of equal legal validity
Forms of sale promotion:
– Giving samples of goods or providing samples of services to customers for trial use free of charge.
– Presenting 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 sale promotion already registered or announced. In case of goods or services subject to the State management over their prices, the sale 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 sale promotion.
– Other forms of sale promotion if approved by the State management agency in charge of commerce
*Rights of traders to conduct sale promotion
– Vietnamese traders, branches of Vietnamese traders, and Vietnam-based branches of foreign traders shall have the right to conduct sale promotion themselves or to hire traders engaged in provision of sale promotion services to do so.
– Representative offices of traders shall not be allowed to conduct sale promotion themselves or to hire other traders to conduct sale promotion in Vietnam for the traders that they are representing
Notes when conducting sale promotion
Sale promotion goods and services
– Sale promotion goods and services mean goods and services use by traders to promote their sale and provision in various forms of sale promotion.
– Sale promotion goods and services must be those traded lawfully.
Goods and services used for sale promotion, sale promotion discount rates
– Goods and services used for sale promotion mean those given as gifts or prizes or provided free of charge by traders to customers.
– Goods and services used by traders for sale promotion may be goods and services they are trading in or other goods and services.
– Goods and services used for sale promotion must be those traded lawfully.
– The Government shall specify the maximum value of goods and services used for sale promotion, and the maximum discount rate for sale promotion goods and services, which traders can apply in their sale promotion activities
.
Rights of traders conducting sale promotion
– To choose the form, time and venue for sale promotion, goods and services to be used for sale promotion.
– To define specific benefits which customers shall be entitled to enjoy according to Clause 4, Article 94 of Commercial law.
– To hire traders engaged in the business of providing sale promotion services to conduct sale promotion for them.
– To organize the application of the sale promotion forms specified in Article 92 of Commercial law.
Obligations of traders conducting sale promotion
– To fully comply with the order and procedures provided for by law for conducting sale promotion in various forms.
– To publicly notify all information on sale promotion activities to customers according to Article 97 of Commercial law.
– To strictly adhere to the sale promotion program already announced, and to fulfill their commitments with customers.
– With regard to the forms of sale promotion specified in Clause 6, Article 92 of Commercial law, traders must set aside and remit 50% of the value of the prizes already announced into the state budget in cases where there is no prize-winner.
The Trade Minister shall provide for specific forms of sale promotion under prize programs which must comply with this provision.
– To comply with agreements in sale promotion service contracts if traders conducting sale promotion are those providing sale promotion services.
Information that must be publicly notified
– For all forms of sale promotion specified in Article 92 of Commercial law, traders conducting sale promotion must publicly notify the following information:
+ Names of sale promotion activities;
+ Sale prices or charge rates of sale promotion goods or services and related costs for delivery of sale promotion goods or services to customers;
+ Names, addresses and telephone numbers of traders conducting the sale promotion;
+ Sale promotion duration, the starting date and ending date and area of sale promotion activities;
+ Where benefits of the participation in sale promotion depend on specific conditions, notices must clearly state that such sale 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 sale promotion-related information:
+ Sale prices of goods or charge rates of services given as gifts to customers, for the form of sale promotion mentioned in Clause 2, Article 92 of Commercial law;
+ Absolute value or discount percentage of normal prices of goods, or normal charge rates of services before the sale promotion duration, for the form of sale promotion specified in Clause 3, Article 92 of Commercial 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 sale promotion specified in Clause 4, Article 92 of Commercial law;
+ Types of prize and value of each prize; rules for participation in sale promotion programs, method of selecting prize-winners, for the form of sale promotion specified in Clauses 5 and 6, Article 92 of Commercial law;
+ Expenses which must be borne by customers, for the form of sale promotion specified in Clauses 7 and 8, Article 92 of Commercial law.
Modes of notification
– The notification of sale promotion for goods according to the provisions of Article 97 of Commercial law shall be made by one of the following modes:
+ At places where goods are sold and where goods are displayed for sale;
+ On goods or their packing;
+ In any other forms which must be attached to goods when such goods are sold.
– The notification of sale promotion for services according to the provisions of Article 97 of Commercial law shall be made by one of the following modes:
+ At places where services are provided;
+ In any other forms which must be provided together with services when such services are provided. Keeping secret information on sale promotion programs and details
Where sale promotion programs must be approved by competent state agencies, such agencies must keep secret the sale promotion programs and details provided by traders until such programs are approved by competent state agencies.
Prohibited acts in sale promotion activities
– Conducting sale 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 sale 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 sale promotion for alcohol and beer, or using alcohol and beer for sale promotion targeted at under-18 people;
– Conducting sale promotion for, or using cigarette or alcohol of an alcoholic volume of 30o or higher for sale promotion in any form;
– Conducting untruthful or misleading sale promotion for goods and services so as to deceive customers;
– Conducting sale promotion for selling inferior-quality goods, causing harms to the environment, human health and other public interests;
– Conducting sale 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 sale promotion for purpose of unfair competition;
– Conducting sale promotion with the value of sale promotion goods and/or services exceeding the maximum limit or the maximum discount rate of sale promotion goods and services mentioned in Clause 4, Article 94 of Commercial law.
Registration for sale promotion activities with, and notification of sale promotion results to, the State management agency in charge of commerce
– Before conducting sale promotion activities, traders must register them with the state management agency in charge of commerce, and after such sale promotion activities are completed, report sale promotion results to such agency.
– The Government shall provide for in detail the registration of sale promotion activities with, and the notification of results of such activities to, the state management agency in charge of commerce.
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Frequently asked questions
Traders conducting sale promotion are those falling into one of the following cases:
– Traders directly conduct sale promotion for goods and/or services that they trade in;
– Traders engaged in providing sale promotion services conduct sale promotion for goods and/or services of other traders under an agreement with the latter
Yes! Traders conducting sale promotion have the right to choose the form, time and venue for sale promotion, goods and services to be used for sale promotion.
Yes! Vietnamese traders, branches of Vietnamese traders, and Vietnam-based branches of foreign traders shall have the right to conduct sale promotion themselves or to hire traders engaged in provision of sale promotion services to do so.
Conclusion: So the above is Notes when conducting sale promotion in Viet Nam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
