Legal Question in Business Law in New Jersey

Offering cash rewards for subscription referrals?

I'm in the process of starting a subscription-based PDF-newsletter that is emailed monthly to my subscribers (nationally across the US). Is it permissible to offer a $20 reward to current subscribers for each referral of theirs that results in a new subscriber to our publication? It would be trackable in a ''referral bank'' online that they can login and check it's status (how much they have so far), and would be rewarded in a lump sum to them (either through PayPal or a check) every 6 months.

Is this a legal marketing technique? Thanks for any assistance!!


Asked on 5/12/08, 5:34 pm

1 Answer from Attorneys
Ronald Cappuccio Ronald J. Cappuccio, J.D., LL.M.(Tax)

Re: Offering cash rewards for subscription referrals?

There is no legal problem with offering an affiliate program or some type of referral fee. Remember, you will have to keep track of the fees and issue 1099's.

I hope this helps

Ron Cappuccio

http://www.TaxEsq.com

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Answered on 5/13/08, 8:44 pm


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