Understand the Bait-And-Switch Scam
Although the term "bait-and-switch" is complained about often by consumers, it's rarely used correctly. The legal implications of using actual bait-and-switch offers can be severe and include prosecution, fines, and even the closure of a business.
Knowing just what constitutes bait-and-switch is vital. A shady or unusual selling tactic may not be to your liking, but if it's not illegal, very little can be done about it. Before diving into the ins and outs of bait-and-switch advertising, take a look at the general definition.
In brief, bait-and-switch is the action of advertising goods that are an incredible bargain, with the explicit intention of substituting inferior or more expensive goods at the time of the purchase. In effect, the incredible offer is the "bait," just like the attractive maggot or fly on the end of a fishing line.
This offer is designed to lure you in, but instead of getting something too good to be true, you get a very different deal indeed (the "switch"). It's either a much more inferior product or service, or you get what is advertised but at a much greater price. Either way, each instance is a clear case of fraud and is punishable by law.
The practice is most commonly used on electronic items like TVs, Blu-Ray players, audio equipment and computers, high-end digital cameras, lenses, and accessories. But that does not mean you will not find bait-and-switch in other areas. A meal, a pair of shoes, or even the kind of Internet service you get can all be sold using bait-and-switch techniques.
How the Scam Works
The advertiser will produce an ad that offers something for a price well below the current market value; for instance, a new 10" Android tablet for $50, when the usual price is $350. It's almost too good to be true, but this bait catches many people.
The customer will then go to the store to buy the $50 tablet and be confronted with several options:
- The tablet is no longer available, but there is another one for sale for $100. This is a smaller tablet, inferior in every way from the one advertised, and is twice the price. Having made the trip to the store, many people will fall victim to the bait-and-switch scam and simply buy the inferior product rather than leave empty-handed.
- The tablet is available, but it's actually much more expensive than the ad stated. The consumer will then be told that it's a slightly different model than the one advertised, or that the one advertised was available only to the first 2 customers. Either way, it's now in the hands of the consumer to buy the same tablet for two or three times the price advertised. Some slick salesmanship can easily close the deal.
- The tablet is available, but it is not actually the advertised tablet. Rather, it's an inferior product, perhaps a cheap copy or fake, or one that is refurbished or stripped down to the very bare essentials. This happens a lot with digital cameras, when advertisers will offer a new camera for half the retail price, but will then sell something from the "grey" market. This is a camera that is not meant to be sold in the US, and will not come with anything other than the body. It will also not have a warranty. While it is not illegal to sell grey market cameras, it is against the law to advertise them as the real deal and sell them without informing the consumer.
What Is NOT a Bait-and-Switch offer?
It is just as important to know what is NOT a bait-and-switch offer because falsely accusing someone of using this tactic can have vast legal implications. So, let's clear up the muddy waters of the term.
The following are situations that consumers often claim to be bait-and-switch but are actually just cases of bad luck, errors, or crafty (but legal) advertising practices.
A Pricing Error
This is by far the most common complaint, especially with the surge in online deal forums. The advertiser will list a product for a price unheard of—say $50 for a brand new 60-inch LCD TV. This is simply a pricing error, it's clearly too good to be true and the retail store would lose hundreds of thousands of dollars honoring the offer.
However, the online store will accept the price and let you check out with the insane deal. Later, you will get an email stating that the order has been canceled, and your money refunded. People cry "bait-and-switch!" but it's not the case. It's just an error, and the consumer should know better.
Limited Quantities Available
Another one that catches consumers unawares is the limited quantity deals. The retail store will advertise something for 90 percent off, but make it applicable to the first 10 customers only.
After that, everyone else pays the usual price. This is not bait-and-switch unless the advertiser fails to disclose the offer details. This scenario is most often brought into question on Black Friday, but it's not bait-and-switch. It's more like a loss leader, which brings people to the store for incredible savings in the hope that they will buy more.
This is borderline shady, but if done correctly it's just a case of not truly understanding the way the ad was written. For instance, if an advertiser says "All Blu-Ray Players UP TO 90 percent OFF!!!" then you jump to the conclusion that all Blu-Ray players are going to be massively discounted.
Not so. If one Blu-Ray player in the store is actually sold at 90 percent off, the advertiser has met the requirements of the ad. Every other player can be 5 percent off. And the one that was so drastically reduced could have been broken, a display model, old, repackaged or missing components. Another way to use tricky language is to say "offer not valid in all stores" or "online pricing only, individual store prices will vary." Again, not nice, but not bait-and-switch.
Bait-And-Switch advertising is illegal, underhanded, and the refuge of the dishonest business. If you're a consumer, resist the urge to get upset every time you miss a deal; the advertiser is not always trying to pull the wool over your eyes. However, if it's a genuine bait-and-switch scam, report the business immediately.