(a) It is unlawful for any person to use the term “prize” or “gift” or other similar term in any manner that would be untrue or misleading, including, but not limited to, in the manner made unlawful in subsections (b) or (c) of this section.

(b) If a person is notified that such person has already won a prize in any contest, it is unlawful to require the purchase of goods or services or payment of any money whatsoever as a prerequisite to collect the prize, and the contest prize shall be delivered to the awardee without a requirement to pay money or purchase goods or services.

(c) It is unlawful to notify any person by any means that such person will receive a gift (including a prize or consisting of a prize) and that as a condition of receiving the gift such person must pay any money, or purchase or lease (including rent) any goods or services, if any one (1) or more of the following conditions exist:

(1) The shipping charge, depending on the method of shipping used, exceeds

(A) The average cost of postage or the average charge of a delivery service in the business of delivering goods of like size, weight, and kind for shippers other than the offerer of the gift for the geographic area in which the gift is being distributed, or

(B) The exact amount for shipping paid to an independent fulfillment house or an independent supplier, either of which is in the business of shipping goods for shippers other than the offerer of the gift.

(2) The handling charge

(A) Is not reasonable, or(B) Exceeds the actual cost of handling, or

(C) Exceeds the sum of Three Dollars ($3) in any transaction, or

(D) In the case of a general merchandise retailer, exceeds the actual amount for handling paid to an independent fulfillment house or supplier, either of which is in the business of handling goods for businesses other than the offerer of the gift.

(3) Any goods or services which must be purchased or leased by the offeree of the gift in order to obtain the gift could have been purchased through the same marketing channel in which the gift was offered for a lower price without the gift items at or proximate to the time the gift was offered.

(4) The majority of the gift offerer’s sales or leases within the preceding year, through the marketing channel in which the gift is offered or through in-person sales at retail outlets, of the type of goods or services which must be purchased or leased, in order to obtain the gift item, were made in conjunction with the offer of a gift. This subsection does not apply to a gift offer made by a general merchandise retailer in conjunction with a sale at an on-island location, or to the sale or lease through mail order of goods or services (excluding catalog sales) if

(A) the goods or services are of a type unlike any other type of goods or services sold or leased by the general merchandise retailer at any time during the period beginning six (6) months before and continuing until six (6) months after the gift offer,

(B) the gift offer does not extend for a period of more than two (2) months, and

(C) the gift offer is not untrue or misleading in any manner.

(5) The gift offerer represents that the offeree has been specially selected in any manner unless (A) the representation is true and (B) the offeree made purchase fromthe gift offerer within the six-(6-)month period before the gift offer was made or has a credit card issued by, or a retail installment account with, the gift offerer or the offeree previously entered the contest offered by the offeree.

(6) Nothing in this section nor in this chapter may be used as a defense by an offerer to prevent an offerer from awarding a gift or prize to a contest winner, even if the contest was in violation of this or any other statute; and nothing herein shall prevent legitimate contests which do not require the offeree to spend any money with the offerer or purchase any goods or services from the offerer. If an offerer offers a contest winner a prize, this section only invalidates any requirement that the winner purchase goods or services or pay money to get the prize, and does not relieve the offerer of the obligation to award the offeree the prize as won or promised. If a contest sponsor fails to award a prize as promised, the Superior Court may, upon application of the Attorney General or the prize winner, order the sponsor to make the award as promised or pay the full retail value of the prize, plus attorney’s fees, and such civil penalties as are provided in this chapter or in any other statute.

(7) This article does not prohibit legitimate contests not requiring the purchase of goods or services or the expenditure of money; nor offers of gifts tied to the sale of other goods or services, if no element of chance is involved, and if the requirement that other goods must be purchased is clearly stated in all advertising and communications; nor does it apply to games at Fiesta Guam, or its successor, or to games conducted in village fiestas authorized by the village mayor.

(8) Nothing in this section authorizes operation of a lottery which requires a purchase or expenditure of money, nor a game of chance which requires a purchase or expenditure of money.

(9) In addition to the remedies provided for in Articles
1 and 2 of this chapter, the Attorney General may also represent a consumer in an action for specific performance of the terms of the contest or offer of gift.
(d) The following definitions apply to this section:

(1) Marketing channel means a method of retail distribution, including, but not limited to, catalog sales, mail order sales, telephone sales, and in-person sales at retail outlets.

(2) General merchandise retailer means any person or entity regardless of the form of organization that has continuously offered for sale or lease more than one hundred (100) different types of goods or services to the public in Guam throughout a period exceeding five (5) years.

(3) Each violation of the provisions of this section is a misdemeanor.
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ARTICLE 5
HOMEOWNERS’ WARRANTIES