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Bait-and-switch is a form of fraud used in retail sales but also employed 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").
Bait-and-switch techniques have a long and widespread history as a part of commercial culture. Many variations on the bait-and-switch appear, for example, in China's earliest book of stories about fraud, Zhang Yingyu's The Book of Swindles (c. 1617).
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.
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, bait and switch 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 Canada, this tactic is illegal under the Competition Act. In Australia, bait advertising is illegal under the Competition and Consumer Act 2010 (formerly known as the Trade Practices Act 1974).
- Real Estate Brokers and Agents often advertise themselves as buyer agents without disclosing that they may not be able to provide that service if they work for a brokerage that lists homes and represents home sellers.
- On-line sellers use bait-and-switch by showing a photograph of a desired item to get sales, then shipping a cheaper copy of the item.
- Rickrolling is a famous prank and internet meme, a type of bait and switch using a disguised hyperlink.
- Car dealerships and auto-brokers have also been known to use various forms of bait and switch or similar tactics. Including, advertising vehicles online at what seems like a bargain price, only for the customer to discover that the specific vehicle is no longer available, as well as adding on a plethora of additional fees or even changing the sale price when coming close to closing the sale.
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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 not strictly illegal, the political objective is to get legislation or rules passed without expected negative community review.
- AIDA (marketing)
- Choice architecture
- Contract of sale
- Door-in-the-face technique
- Foot-in-the-door technique
- Introductory rate
- Outline of marketing
- Permission marketing
- Pyramid scheme
- Selling technique
- Trojan horse (business)
- Value added selling
- Zhang Yingyu (2017). The Book of Swindles: Selections from a Late Ming Collection. Translated by Rea, Christopher; Rusk, Bruce. Columbia University Press. ISBN 978-0-23117-862-4.
- "The Consumer Protection from Unfair Trading Regulations 2008". Legislation.gov.uk. Retrieved 19 July 2019. (See paragraphs 5 and 6)
- "Consumer Law Australia - How is Bait Advertising Illegal?". Brucelegal.com.au. 6 August 2018. Retrieved 11 June 2019.
- "Common Auto Dealer Scams". PublicCounsel.org. Retrieved 19 July 2019.
- Reynolds, Jerry (1 March 2018). "Beware Of Bait and Switch Internet Pricing Practices". Car Pro USA. Retrieved 19 July 2019.
|Look up bait-and-switch in Wiktionary, the free dictionary.|
- "Guides Against Bait Advertising". Federal Trade Commission. Archived from the original on 19 March 2013.
- Cleland, Scott (22 September 2011). "Google's 'Bait & Switch' Deception Exposed at Hearing". Forbes.
- "Bait and switch selling". Competition Bureau Canada. Archived from the original on 5 August 2014.