Posts Tagged With: current market value

Understand Bait-And-Switch Advertising

Learn What Bait-And-Switch Advertising Means to You and Your Customers 

3 Cups and BallsImage courtesy of Theodore Scott
You may have heard the phrase “bait-and-switch” many times in your career. It’s something consumers throw out there often, and most of the time they really don’t understand the true ramifications of bait-and-switch advertising. When advertisers use deceptive1 bait-and-switch advertising in its true form, they can be prosecuted. The practice is illegal and carries stiff penalties. But quite often, the consumer confuses this practice with something more akin to a printing error or misunderstanding of the term. (Read more about Consumer Behavior Consumer Behavior2).

Here then, to avoid any further confusion from either the consumer or the advertiser, is a guide to bait-and-switch advertising.

What is a Bait-And-Switch offer?

Technically, bait-and-switch schemes draw the customer in with an incredible offer (the bait3 ) and then swap it out for either an inferior product, a more expensive product, or a product that doesn’t come with all of the items one would usually expect (the switch).

The practice is most commonly used on electronic items like TVs, Blu-Ray players, audio equipment and computers, plus high-end digital cameras, lenses and accessories.

How Does the Bait-And-Switch Scam Work?

It’s quite simple, but very effective.

The advertiser will produce an ad that offers something for a price well below the current market value; for instance, a new 10″ Android4 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 tablet5 and be confronted with several options:

1: The tablet in question is no longer available, but there is another one they can buy 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 scam6 and simply buy the inferior product rather than leave empty handed.

2: The tablet is available, but it’s actually much more expense 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.

3: 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.7 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?

Now, we come to clearing the muddy waters of the term. The following are situations that consumers claim to be bait-and-switch, but are actually just cases of bad luck, errors, or slick (but legal) advertising practices.

1: 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,8 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 price. Later, you will get an email stating that the order has been cancelled, and your money refunded. People cry “bait-and-switch!” but it’s not the case. It’s just an error.

2: Limited Quantities Available

Another one that catches consumers unawares is the limited quantity deals. The retail store will advertise something for 90% 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,9 but it’s not bait-and-switch. It’s more like a loss leader,10 which brings people to the store for incredible savings in the hope that they will buy more.

3: Slick Wording

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% OFF!!!” then you jump to the conclusion that all Blu-Ray players are going to be massively discounted. Not so. If one Blu-Ray player11 in the store is actually sold at 90% off, the advertiser has met the requirements of the ad. Every other player can be 5% 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 nasty, underhanded and the refuge of the trashy retail store. Please, don’t ever use it. And if you’re a consumer, don’t shout it out every time you miss a deal, the advertiser is not always trying to pull the wool over your eyes.

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