What Is Bait and Switch?
Bait and switch is a morally suspect sales tactic that lures customers in with specific claims about the quality or low prices on items that turn out to be unavailable in order to upsell them on a similar, pricier item. It is considered a form of retail sales fraud, though it takes place in other contexts. While many countries have laws against using bait and switch tactics, not all occurrences constitute fraud.
Key Takeaways
- Bait and switch occurs when a prospective buyer is enticed by an advertised deal that seems attractive.
- However, the advertised deal does not exist or is inferior in terms of quality or specifications, where the buyer is then presented with an upsell.
- The practice is considered unethical, and in many jurisdictions is illegal.
- It may nonetheless be difficult to prove a bait and switch scam, so it is up to consumers to be vigilant.
- Red flags may include too-good-to-be-true deals, claims of limited quantity available, and overly-complicated fine print or disclaimers.
Understanding Bait and Switch
The
Related Terms: suggestive selling, teaser rate, loss leader, rain check, mortgage rates, Federal Trade Commission.
References
- Code of Federal Regulations. “Part 238 - Guides Against Bait Advertising”.
- Society for Conservation Biology. “Generic Names and Mislabeling Conceal High Species Diversity in Global Fisheries Markets”.
- Legal Match. “Bait and Switch Laws”.
- ZDNet. “FTC sues Intuit over TurboTax’s bait-and-switch free filing ads”.
- Legal Information Institute. “Bait and Switch”.
Get ready to put your knowledge to the test with this intriguing quiz!
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## What does the term "Bait and Switch" refer to in marketing?
- [ ] Offering additional incentives to consumers
- [ ] Providing discounts to loyal customers
- [x] Advertising a product at an appealing price, then steering consumers to a more expensive product
- [ ] Offering warranties or guarantees
## What is a common characteristic of a "Bait and Switch" tactic?
- [x] The advertised product is often unavailable or in very limited quantities
- [ ] The advertised product is always available at the specified price
- [ ] The tactic focuses on product bundling
- [ ] The goal is to provide consumers with multiple choices
## What is typically the goal of a "Bait and Switch" strategy?
- [ ] To gather customer feedback
- [x] To convert a potential sale of a less expensive product into a sale of a more expensive product
- [ ] To increase customer service quality
- [ ] To promote seasonal products
## Which regulation protects consumers from "Bait and Switch" tactics?
- [ ] Sherman Antitrust Act
- [ ] Securities Exchange Act
- [x] Federal Trade Commission Act
- [ ] Fair Labor Standards Act
## "Bait and Switch" practices are most likely considered to be:
- [ ] Beneficial for building long-term customer relationships
- [ ] A method for reducing inventory
- [x] Deceptive and unethical
- [ ] Standard marketing practices
## Which of the following could be an example of a "Bait and Switch" tactic?
- [ ] Offering a discount on bulk purchases
- [ ] Implementing a loyalty rewards program
- [x] Advertising an unbeatable price on a TV that is almost never available, to sell a more expensive model
- [ ] Giving free samples with purchases
## What is the legal consequence of using "Bait and Switch"?
- [ ] Loss of branding opportunities
- [ ] Increased customer loyalty
- [x] Legal action and fines by regulatory authorities
- [ ] Higher sales volume
## How can consumers protect themselves against "Bait and Switch" tactics?
- [ ] Buying only from online platforms
- [x] By reading reviews and verifying availability before making a purchase
- [ ] Avoiding discounts and promotions
- [ ] Relying only on word-of-mouth referrals
## Why do businesses often refrain from using "Bait and Switch" tactics?
- [ ] It usually lowers product prices daily
- [x] It can damage the business’s reputation and lead to legal repercussions
- [ ] It increases their advertising costs
- [ ] It takes longer to setup marketing campaigns
## Which statement is true about advertising laws regarding "Bait and Switch"?
- [ ] There are no specific laws addressing this tactic
- [ ] All forms of competitive marketing tactics fall under this category
- [x] Regulatory agencies strictly enforce laws against "Bait and Switch" to protect consumers
- [ ] It is mandatory for all advertisements to disclose potential in-stock limitations
