WARNING--long post :-)
I think the purpose of the phrase you quote is to make it clear that un-compensated endorsements from paying customers are always fine (a common sense rule). The challenge comes when a paying customer is also compensated for their posting.
Check out ftc.gov/opa/2009/10/endortest.shtm
for the actual announcement from the FTC. Specifically it says:
“The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.”
I’m not a lawyer, so it’s worth checking with your attorneys. It’s possible that a $5 card could be considered “not material,” but it’s also possible that any payment of any kind is “material.” I would certainly argue that, if you’re getting a noticeable increase in postings, then it is by definition material.
More information is at ftc.gov/os/2009/10/091005revisedendorsementguides.pdf
. In particular go to the end of this 12-page document. Under the section 255.5 “Disclosure of material connections” there are many examples. Examples 7 and 9 seem the most relevant to the online world.
Example 7: A college student who has earned a reputation as a video game expert maintains a personal weblog or “blog” where he posts entries about his gaming experiences. Readers of his blog frequently seek his opinions about video game hardware and software. As it has done in the past, the manufacturer of a newly released video game system sends the student a free copy of the system and asks him to write about it on his blog. He tests the new gaming system and writes a favorable review. Because his review is disseminated via a form of consumer-generated media in which his relationship to the advertiser is not inherently obvious, readers are unlikely to know that he has received the video game system free of charge in exchange for his review of the product, and given the value of the video game system, this fact likely would materially affect the credibility they attach to his endorsement. Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge. The manufacturer should advise him at the time it provides the gaming system that this connection should be disclosed, and it should have procedures in place to try to monitor his postings for compliance.
Example 9: A young man signs up to be part of a “street team” program in which points are awarded each time a team member talks to his or her friends about a particular advertiser’s products. Team members can then exchange their points for prizes, such as concert tickets or electronics. These incentives would materially affect the weight or credibility of the team member’s endorsements. They should be clearly and conspicuously disclosed, and the advertiser should take steps to ensure that these disclosures are being provided.
The award you mention is less than the value of either example, so maybe it’s ok? Then again, the clear FTC concern is whether the credibility of the endorser is compromised. I think even for $5, the answer is yes—if the FTC reads it that way, you’re at risk.