Mystery Boxes & Envelopes And Other Games Of Chance Sold Online

You see them in many online marketplaces... the mystery envelope, box, bag and etc... Everyone likes to think that if they take a chance on these mystery packages that they will get a killer deal BUT will they? That is the big ??? of these types of listings.

In many ways it is considered gambling and several sites prohibit it. Actually, the better sites prohibit it to keep the buyers of their site from being taken advantage of. We have seen many unscrupulous sellers use this kind of gimmick to make a quick buck. Sometimes, the items in the package are ok and sometimes, the buyer really gets the short end of the stick.

We fell for it one time. We bought a mystery package of unsearched coins. The seller stated the value was to be a certain amount (I don't remember the amount anymore) but what we got was a pile of junk coins. Mostly half shot wheat pennies. The one thing that the seller did say in his ad was that there were gold pieces in some of the packages and that 1 in 10 buyers received these gold pieces. Our guess is, no one ever got a gold piece. The seller just made the package sound like the buyer may get lucky and find something very valuable in their lot.

We are not advocating anyone's procedure but we will say that a site that is new or in doubt about allowing this activity should at least look at eBay's policies. Say all the bad things you want about eBay but no one can deny that eBay's legal team is top notch. They know the laws inside and out. This same team works diligently to provide policies to protect the site. Of course, the owner of a site could also check with their attorney.

Here is what eBay says about Chance Listings:

eBay does not permit listings that sell an opportunity to win an item or prize either by chance or in connection with a skill contest.

Specifically, eBay does not permit listings that promote giveaways, lotteries, sweepstakes, random drawings, raffles, contests, or prizes. Such promotions are highly regulated and may be unlawful in many states.

Examples of listings not permitted:

A listing offering game codes from a national retailer's sweepstakes promotion.

A listing with the title "MYSTERY CASH $$ALL CASH$$ ONLY 20 ENVELOPES."

I am offering you the opportunity to win a brand new, in box, Xbox 360."

A listing with the title "Raffle Tickets for a $300 GAS CARD… Only $1 a chance."

A listing item description that states "PAY $50 AND SEND US YOUR BEST ESSAY OR COMPOSITION TO ENTER INTO OUR LOCAL NEWSPAPER'S WRITING CONTEST."

A listing item description that states "ALL BIDDERS WILL BE ENTERED INTO A RANDOM DRAWING FOR AN APPLE IPOD NANO!"

Bonuses

Sellers are allowed to offer a bonus item to bidders as long as:

The seller states the exact price at which the bonus will apply. For example, a seller can't say, "I will throw in a state-of-the-art black and white TV if bidding reaches a high enough amount." But a seller can say, "I will throw in a state-of-the-art black and white TV if bidding reaches $150."

In multiple item listings, the seller offers the exact same bonus item to ALL buyers. Multiple Item Listing rules require that all buyers receive identical items.

All bonus items offered comply with eBay's policies. See eBay's Prohibited and Restricted Items policies.

Conditional bonuses, free gifts, and other items that do not significantly affect the value of the item for sale may not be included in the title of the listing. Please see the Search and Browse Manipulation policy for further information.

Grab Bags

Grab bags are listings where identified items are sold in a group (in a bag). Grab bags are allowed as long as:

All contents of the grab bag are identified within the listing. The number, quality, or condition of these items does not need to be identified.

All contents of the grab bag comply with eBay’s policies. See eBay's Prohibited and Restricted Items policies.

The listing doesn’t single out anything that “may” be contained within the grab bag that has particular monetary or obvious collectible value. For example, grab bag listings for collectible comic books can’t allude to the possibility that a specific rare, high value comic book “may” be included within the grab bag. This type of listing is considered a lottery, which is not allowed on eBay.

Mystery Items (envelopes, boxes, etc)

Mystery items are listings where the seller doesn't specifically identify the contents, number, quality or condition of the items for sale. Mystery item listings are not permitted.
--
Gambling in many of it's forms is described in wikipedia.
--
There is an interesting article called The Internet and Entrepreneurs: A Special Niche is Developing
written by Lewis and Roca, LLP.

In part it states:

With a global reach of more than a billion people, Internet entrepreneurs continue to look for ways to bring traditional promotions and competitive entertainment to a broader global audience. Recent federal regulations have cracked down on Internet gambling involving games of chance. As a result, companies are seeking new ways to capitalize on the Internet gaming industry, and two of the hottest emerging markets are Internet sweepstakes and skill-based gaming. And as Internet businesses continue to grow, the need for legal advisors who know the intricacies of this terrain increases. Lewis and Roca attorneys Tony Cabot and Leanne Dodds are among those gaming attorneys who practice in this special niche.

You can continue reading the article at the above link.
--
The FTC talks about "unfair or deceptive acts or practices" and how an online seller needs to be completely up front with what it is they are selling. You can find it here Dot Com Disclosures. This report has some white pages with nothing on them, just scroll past them.

In part:

When it comes to online ads, the basic principles of advertising law apply:

1. Advertising must be truthful and not misleading;
2. Advertisers must have evidence to back up their claims (“substantiation”);
and
3. Advertisements cannot be unfair.
Unique features in Internet ads also may affect how an ad and any required disclosures are evaluated.

Advertisers must identify all express and implied claims that the ad conveys to consumers. When identifying claims, advertisers should not focus only on individual phrases or statements, but should consider the ad as a whole, including the text, product name and depictions. If an ad makes express or implied claims that are likely to be misleading without certain qualifying information, the information must be disclosed. Advertisers must determine which claims might need qualification and what information should be provided in a disclosure. If qualifying information is necessary to prevent an ad from being misleading, advertisers must present the information clearly and conspicuously.
--
The FTC also has a wealth of information about advertisements on their page called Advertising and Marketing on the Internet: Rules of the Road.

While there may be very honest sellers utilizing the "mystery" package strategy, it is our opinion that it is a deceptive practice. If the product in these types of packages actually hold any value, the seller should be able to sell them in a way that they list what the items are and what their true value is. With all of the rules, regulations and laws that we have found with very little effort, we feel that a seller should at least consult with their attorney before placing a mystery listing on any site.

*** Most states have very strict regulations on this activity also. Each seller should consult with their state department of commerce if they do not have an attorney. The state offices are willing to give you information at no cost.

As for the sites, it appears to be in their best interest to not allow this kind of activity on their sites. From what we have read, it appears that the sites could be held legally responsible, at least - in part, if a buyer should be ripped off. At least consult your attorney about this activity.

Remember, just because another site may be doing it, does not mean that it is legal.

The integrity of your site and all of its' sellers could be on the line!