Bait-and-Switch

Definition

Bait-and-switch is a deceptive sales tactic where a business advertises a product or service at an attractive price, but then attempts to sell the customer a different, typically more expensive, item instead. The goal is to lure in potential customers with the promise of a good deal, only to pressure them into purchasing a less desirable or more costly alternative.

5 Must Know Facts For Your Next Test

1. Bait-and-switch tactics are considered a form of deceptive advertising and an unfair trade practice by the Federal Trade Commission (FTC).
2. The FTC requires businesses to have a reasonable quantity of the advertised product available, and prohibits them from using bait-and-switch tactics to lure in customers.
3. Bait-and-switch can take many forms, such as advertising a product at a low price but then claiming it is out of stock, or showing a desirable item but then pressuring the customer to purchase a more expensive alternative.
4. Consumers who fall victim to bait-and-switch may end up paying more than they intended or purchasing a product they did not want, violating their right to make an informed purchasing decision.
5. The FTC can take enforcement action against businesses that engage in bait-and-switch tactics, including issuing fines, cease-and-desist orders, and consumer redress.

Review Questions

• Explain how bait-and-switch tactics violate the Federal Trade Commission's (FTC) regulations on deceptive advertising.
  • Bait-and-switch tactics violate the FTC's regulations on deceptive advertising because they involve luring in customers with the promise of a desirable product or service at an attractive price, only to then pressure them into purchasing a different, typically more expensive, item. This practice is considered deceptive because it denies consumers the ability to make an informed purchasing decision, as the advertised product may be unavailable or the business may have no intention of selling it at the advertised price. The FTC requires businesses to have a reasonable quantity of the advertised product available and prohibits them from using bait-and-switch tactics to mislead consumers.
• Analyze how bait-and-switch tactics can be considered an unfair trade practice under consumer protection laws.
  • Bait-and-switch tactics can be considered an unfair trade practice under consumer protection laws because they violate the fundamental rights of consumers to make informed purchasing decisions. By advertising a product at a low price but then claiming it is out of stock or pressuring the customer to buy a more expensive alternative, businesses are engaging in a manipulative and deceptive practice that denies consumers the ability to freely choose the product they want at the price they expect. This undermines the principles of fair competition and transparency in the marketplace, which are the foundations of consumer protection laws. The FTC has the authority to take enforcement action against businesses that engage in bait-and-switch tactics, as they are seen as an unethical and unfair trade practice that harms consumer interests.
• Evaluate the role of the Federal Trade Commission (FTC) in protecting consumers from bait-and-switch tactics and other deceptive advertising practices.
  • The Federal Trade Commission (FTC) plays a crucial role in protecting consumers from bait-and-switch tactics and other deceptive advertising practices. As the primary federal agency responsible for consumer protection, the FTC has the authority to investigate and take enforcement action against businesses that engage in these unfair trade practices. This includes issuing fines, cease-and-desist orders, and requiring businesses to provide consumer redress. The FTC's regulations on deceptive advertising require businesses to have a reasonable quantity of advertised products available and prohibit them from using bait-and-switch tactics to mislead consumers. By actively enforcing these rules and taking action against violators, the FTC helps ensure that consumers can make informed purchasing decisions and are not subjected to manipulative sales tactics that undermine their rights. The FTC's role in this area is essential for maintaining a fair and transparent marketplace that prioritizes the interests of consumers.

Related terms

Deceptive Advertising: Advertising that contains false, misleading, or unsubstantiated claims, designed to mislead consumers.

Unfair Trade Practices: Business practices that are unethical, manipulative, or violate consumer protection laws.

Consumer Protection: Laws and regulations that safeguard the rights and interests of consumers against unfair, deceptive, or fraudulent business practices.