Bait and switch

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For other uses of term, see Bait

A bait and switch is a form of fraud in which the fraudster lures in customers by advertising a good at an unprofitably low price, then reveals to potential customers that the advertised good is not available but that a substitute good is. The goal of the bait-and-switch is to convince some buyers to purchase the substitute good as a means of avoiding disappointment over not getting the bait, or as a way to recover sunk costs expended to try to obtain the bait. It suggests that the seller will not show the original product or product advertised but instead will demonstrate a more expensive product.

Other advertising practices, such as the use of loss leaders or the use of sales techniques to steer customers away from low-profit items, depend on many of the same psychological mechanisms as a bait and switch. 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, the 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.

Unscrupulous estate agents commonly engage in bait and switch by continuing to advertise attractive properties in their windows that they have already sold.

In state politics (e.g., Tennessee), "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 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), 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 anticipated negative community review.