In retail sales, a bait-and-switch is a form of fraud in which the party putting forth the fraud lures in customers by advertising a product or service at a low price or with many features, then reveals to potential customers that the advertised good is not available at the original price or the list of assumed features is different. The use of this term has extended to similar situations outside of the marketing sense.
The goal of the bait-and-switch is to persuade buyers to purchase the substitute goods as a means of avoiding disappointment over not getting the bait, or as a way to recover sunk costs expended to try to obtain the bait. It suggests that the seller will not show the original product or service advertised but instead will demonstrate a more expensive product or a similar product with a higher margin.
In the United States, courts have held that the purveyor using a bait-and-switch operation may be subject to a lawsuit by customers for false advertising, and can be sued for trademark infringement by competing manufacturers, retailers, and others who profit from the sale of the product used as bait. However, no cause of action will exist if the purveyor is capable of actually selling the goods advertised, but aggressively pushes a competing product.
Likewise, advertising a sale while intending to stock a limited amount of, and thereby sell out, the loss-leading item advertised is legal in the United States. The purveyor can escape liability if they make clear in their advertisements that quantities of items for which a sale is offered are limited.
Bait-and-switch tactics are frequently used in airline and air travel advertising.
Employers can also use bait-and-switch tactics by advertising a job opening in a way that gives a misleading impression of likely working conditions or compensation packages.
In England and Wales it is banned under the Consumer Protection from Unfair Trading Regulations 2008. Breaking this law can result in a criminal prosecution, an unlimited fine and two years in jail
In lawmaking, "caption bills" that propose minor changes in law with simplistic titles (the bait) are introduced to the legislature with the ultimate objective of substantially changing the wording (the switch) at a later date in order to try to smooth the passage of a controversial or major amendment. Rule changes are also proposed (the bait) to meet legal requirements for public notice and mandated public hearings, then different rules are proposed at a final meeting (the switch), thus bypassing the objective of public notice and public discussion on the actual rules voted upon. While legal, the political objective is to get legislation or rules passed without anticipated negative community review.
- Choice architecture
- Contract of sale
- Door-in-the-face technique
- Foot-in-the-door technique
- List of marketing topics
- Permission marketing
- Selling technique
- Sullivan nod
- Teaser rate
- Trojan horse (business)
- Value added selling
- ↑ McArthur, Douglas (2008-04-30). "How does a $224 flight end up costing $826?". The Globe and Mail. Archived from the original on 26 September 2010. http://web.archive.org/web/20100926173941/http://www.theglobeandmail.com/life/article682325.ece. Retrieved 20 September 2010.
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