Bait-and-Switch Practices

An Example

The following example highlights the issues raised by bait-and-switch practices. Suppose a product is advertised at a very attractive price and customers arrive at the store to buy it. Customers are convinced by the salesperson that the advertised product is not value for the money, is unreliable, and has few features that most people think essential. The customers are persuaded to spend significantly more on an alternative product.

The advertisement that drew customers to the store was an alluring but insincere offer to sell the product advertised. The intention was to entice potential purchasers into the store and then sell them the more expensive item. The claim is that what has taken place is fraudulent. As soon as customers decided to visit that particular retailer rather than another (in other words, they “took the bait”), they have made an investment of time, money, and effort; so, even if they do not end up purchasing from that store, they have nonetheless been deceived. Once in the store, the salesperson aims to convince customers not to buy the product they came in to purchase. However, once they are in the store, that store has a competitive advantage over other retailers of similar products. This is why the “switch” is often successful. The present and actual product to which customers have been switched is more attractive than hypothetical products at other retailers, making it more likely that the salesperson will complete the sales of the more expensive model. In this example, the appealing offer was not what it seemed. The advertised product was simply an enticement to get customers to identify themselves as being interested in the type of product advertised, thereby providing the sales staff with an opportunity to sell a model that was more advantageous to the store.

The Law and Bait-and-Switch Practices

In the United States, the Federal Trade Commission (FTC) regulates against deceptive practices.

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Bait-and-switch practices are considered deceptive and therefore unlawful. The federal court interpretation of bait-and-switch practices is usually consistent with the FTC guidelines, and reference is often made to them. Many state courts have adopted the Uniform Law version of Consumer Protection Laws, in which bait-and-switch practices are identified as deceptive.

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