Bait-and-switch is a form of fraud used in retail
sales but also practiced in other contexts. First, customers are
"baited" by merchants'advertising products
or services at a low price, but when customers visit the store, they discover
that the advertised goods are not available, or the customers are pressured by
sales people to consider similar, but higher priced items
("switching").
Function
The intention of the bait-and-switch is to encourage
purchases of substituted goods, making consumers satisfied with the available
stock offered, as an alternative to a disappointment or inconvenience of
acquiring no goods (or bait) at all, and reckoning on a seemingly partial
recovery of sunk costs expended trying 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.
Legality
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, a 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, or by offering a rain check on
sold-out items.
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.
Non-retail use
Bait-and-switch tactics are frequently used in airline and air
travel advertising.
Hotels widely use the form of bait-and-switch tactics
known as 'resort
fees'.
They first attract customers by advertising the lower price (which
appears on all promotional materials and rate comparison engines), and charge
customers the mandatory "resort fee" when they arrive for check-in.
Politics
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 expected negative community review.
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