What happens when a contest goes awry?  Sometimes nothing, legally.  That is precisely why companies pay promotional lawyers to write air tight rules.

Recently M&Ms launched their annual Join The Hunt Easter contest.  The contest had a technical glitch the first day and almost every PIN code entered won an instant prize.  Oops!  The people at M&Ms figured it out pretty quickly and fixed the problem.  Now, legally they were not obligated to award any of those prizes.  Why?

Because, the rules stated:
If any electronic or other error occurs, such as, but not limited to more prizes are claimed/designated than are to be awarded, the prizes remaining after the error is discovered will be awarded in a random drawing from among all eligible Instant Winner registrations received by the Instant Win Game Closing Date.  In no event will the Sponsor be liable for more than the Two Thousand and sixty (2060) Instant Win Game Prizes as disclosed in the Official Rules.

Now, from a marketing perspective, angering your customers, especially in this age of social networking, is not smart.  So, M&Ms apologized for not being able to award the instant prize and instead gave each winner a $20 gift, however, not until some damage had already been done.  (Discussions regarding the “M&Ms Fiasco of 2010″ can be read on Red Flag Deals and on Quebec Concours.)  Some people agree with how M&Ms handled the contest glitch and others did not.  I think M&Ms did their best to handle the glitch.  I believe it took them so long to respond to the entrants because they did not have a plan in place to resolve such a problem, and the marketing department had to scramble to come up with a damage control plan.

I think contest sponsors also need to be more careful when hiring an agency to run their promotions for them.  When there is a contest glitch, it’s not the contest management company who’s reputation get sullied, it’s the sponsor’s.  (Remember, last summer when the IC Group didn’t buy a security certificate longer than the duration of the Pepsi A Flip An Hour promotion?  How in the world could you screw that up?!  Read Craig Borysowich’s blog on that fiasco here.)  I think M&Ms reputation was not helped when the error occurred.  Their company is so large, I don’t think the damage was great, but there was still damage.

What do you think should have happened when the proverbial ball was dropped?  What is your perception of M&Ms now?