Definition
Bait and Switch Advertising refers to a deceptive marketing practice wherein a business advertises a product at a very attractive price or with appealing characteristics to draw customers in. However, once the customers show interest, the advertiser disparages the advertised product—claiming it is out of stock or of inferior quality—and pushes the customers to buy a more costly product instead, which the seller originally intended to sell.
Examples
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Electronics Retailer: An electronics store advertises a top-brand television at a very low price. When customers visit the store, the salesperson informs them that the model is sold out and recommends a similar but more expensive brand or model instead.
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Car Dealership: A car dealership promotes a particular car model with a significant discount. Once prospective buyers arrive, they are told the model is no longer available or that it has undesirable features. The salesperson then tries to sell a higher-end model.
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Furniture Store: A furniture store advertises a popular sofa at a price much lower than competitors. When a customer shows interest, the sales staff suggest that the advertised model is poor in quality or comfort and encourages them to purchase a more expensive sofa.
Frequently Asked Questions (FAQs)
Is bait and switch advertising illegal?
Yes, bait and switch advertising is illegal in many jurisdictions. The Federal Trade Commission (FTC) and laws in various states prohibit such deceptive practices to protect consumers.
How can consumers protect themselves from bait and switch advertising?
Consumers can protect themselves by researching products and prices prior to making purchases, asking the retailer to provide the advertised product, or reporting the deceptive practice to consumer protection agencies.
What should a consumer do if they suspect bait and switch advertising?
If a consumer suspects bait and switch advertising, they should document their experience, gather evidence such as advertisements and interactions with sales personnel, and file a complaint with the Federal Trade Commission or relevant state consumer protection agency.
What penalties can businesses face for engaging in bait and switch advertising?
Businesses found guilty of bait and switch advertising can face penalties including fines, cease-and-desist orders from regulatory authorities, and potential damage to their reputation.
Are there any exceptions where bait and switch advertising may not be considered illegal?
There are typically no exceptions; bait and switch tactics are considered illegal across the board since they violate consumer trust and fair marketing principles.
- Consumer Deception: Any form of misleading marketing or sales tactic designed to mislead or confuse the consumer.
- Disparagement: Act of belittling or denigrating a product to persuade customers to buy a different product.
- Federal Trade Commission (FTC): The U.S. government agency responsible for enforcing consumer protection laws including those against deceptive advertising practices.
Online References
Suggested Books for Further Studies
- “Advertising and Commercial Speech: A First Amendment Guide” by Steven G. Brody and Bruce E. H. Johnson
- “The FTC and New Paternalism: Protecting Consumers From Themselves” by Ron D. Fosnight
- “Consumer Fraud: The Legal Use of Bait and Switch Advertising” by D. C. Alexander
Fundamentals of Bait and Switch Advertising: Marketing Basics Quiz
### What is the primary purpose of bait and switch advertising?
- [ ] To provide customers with the best possible deal
- [x] To lure customers with an attractive offer and then sell a more expensive product
- [ ] To inform customers of a high-demand product
- [ ] To reduce inventory of unpopular products
> **Explanation:** The primary purpose of bait and switch advertising is to lure customers with an attractive offer and then persuade them to buy a more expensive product.
### Which U.S. agency is responsible for regulating advertising practices?
- [x] Federal Trade Commission (FTC)
- [ ] Consumer Product Safety Commission (CPSC)
- [ ] Food and Drug Administration (FDA)
- [ ] Securities and Exchange Commission (SEC)
> **Explanation:** The Federal Trade Commission (FTC) is responsible for regulating advertising practices, including preventing deceptive tactics like bait and switch advertising.
### What is a common scenario of bait and switch advertising?
- [ ] Lowering prices on high-demand items
- [x] Offering a low-priced product and urging customers to buy a more expensive one upon inquiry
- [ ] Expanding inventory for popular products
- [ ] Implementing price matching policies
> **Explanation:** A common scenario of bait and switch advertising is offering a low-priced product and then urging customers to buy a more expensive one when they show interest.
### How should a consumer react to suspected bait and switch advertising?
- [ ] Ignore it and try another retailer
- [ ] Negotiate a better deal
- [x] Document the experience and report it to the FTC
- [ ] Demand a refund
> **Explanation:** Consumers should document their experience and report suspected bait and switch advertising to the FTC or other consumer protection agencies.
### What can businesses face if found guilty of bait and switch advertising?
- [ ] Increased customer loyalty
- [x] Fines and reputation damage
- [ ] Discounts from suppliers
- [ ] Higher sales
> **Explanation:** Businesses found guilty of bait and switch advertising can face significant fines, legal penalties, and damage to their reputation.
### What does disparagement involve in bait and switch tactics?
- [ ] Praising the advertised product
- [x] Belittling the advertised product to sell a more expensive one
- [ ] Ignoring customer inquiries
- [ ] Offering discounts on other products
> **Explanation:** Disparagement in bait and switch tactics involves belittling or denigrating the advertised product to persuade customers to purchase a more expensive product.
### Why is bait and switch advertising harmful to consumers?
- [ ] It improves competition
- [ ] It provides more product options
- [x] It misleads consumers and wastes their time
- [ ] It leads to better deals
> **Explanation:** Bait and switch advertising is harmful because it misleads consumers, wastes their time, and may coerce them into purchasing more expensive products they did not initially want.
### What is a legal consequence of bait and switch advertising?
- [x] Receiving a cease-and-desist order from the FTC
- [ ] Reduced advertising costs
- [ ] Increased customer base
- [ ] Automatic product recalls
> **Explanation:** A legal consequence of bait and switch advertising can include receiving a cease-and-desist order from the FTC, forcing the business to stop the deceptive practices.
### What kind of advertising is prohibited by the Federal Trade Commission in the U.S.?
- [ ] Honest product reviews
- [ ] Discount promotions
- [x] Deceptive advertising practices like bait and switch
- [ ] Comparative advertising
> **Explanation:** The Federal Trade Commission prohibits deceptive advertising practices like bait and switch to protect consumers from fraud.
### What can consumers do to avoid falling victim to bait and switch advertising tactics?
- [ ] Rely solely on in-store promotions
- [ ] Avoid shopping online
- [ ] Keep their purchasing decisions to impulse buys
- [x] Research products and verify availability before purchasing
> **Explanation:** Consumers can avoid falling victim to bait and switch advertising by researching products and verifying their availability and specifications before making a purchase.
Thank you for exploring the nuances of bait and switch advertising and testing your knowledge with our comprehensive quiz. Continue to stay informed and critical of unethical marketing practices!
