Bait-and-Switch

BAIT-AND-SWITCH REFERS TO fraudulent advertising committed by retailers to lure potential customers into their place of business. The Federal Trade Commission (FTC) defines bait-and-switch advertising as: “an alluring but insincere offer to sell a product or service the advertiser does not intend or want to sell.”

The true intent of the advertising is to steer the consumer to a product other than the one listed in the advertisement, which usually generates a higher profit margin to the retailer as well as costs the consumer more.

An example of bait-and-switch advertising is: ABC Computers advertises a $399 complete computer system for sale; upon arrival to the retail location the consumer makes reference to the advertisement; the salesperson attempts to steer the consumer to another product through various methods (“just sold last one; all remaining units are damaged; product has incurred a large number of customer complaints; a leading consumer guide has just published a disparaging review”) and refers the consumer to another product. The other product generally will cost more, and incidentally produce more profit to the retailer. In this scenario, it is assumed the retailer had no intent of selling the originally advertised merchandise, only using the lure of the pricing as bait to bring the potential consumer to the store, giving the salesperson an opportunity to convince the consumer she is better off purchasing the newly recommended merchandise.

The bait-and-switch con has historically been identified with certain industries, that is, electronics, automotive dealerships, furniture stores, and similar businesses. In many cases, the originally advertised prices were so low that alert consumers should have been wary of the offers. Both the draw of the incredible prices and the verbal skills of the salesperson are required to successfully complete the bait-and-switch process. If the salesperson is unable to steer the consumer away from the advertised merchandise to the merchandise the retailer desires to sell, then the scam has failed.

Some retail operations employ the use of shills. These are persons posing as other customers to assist in steering the consumer away from the advertised merchandise; through subterfuge such as “returning” their purchase and complaining loudly of their dissatisfaction with the advertised merchandise; or praising the salesperson for advising them of the recommended merchandise (of which they are so satisfied). Some retail operations employ salespersons more for their abilities to steer consumers than for their knowledge of the merchandise or their customer service skills.

Consumers who become aware that a bait-and-switch advertising scheme is being conducted can contact the local state attorney's office or the Federal Trade Commission (FTC), and provide a copy of the advertisement in question, as well as a description of what transpired at the retail operation. [Page 71]Bait-and-switch schemes can also occur with services, that is, telephone, carpet cleaning, and home repair sales industries and are especially targeted to senior or non-English speaking populations.