Bait and Switch

What is Bait and Switch?

Bait and Switch is a sales tactic that helps to attract customers with certain claims that could be either about low prices or the utmost standard of quality. Generally, it is regarded as a retail sales fraud.

While there are several countries that have specific laws against these tactics, not all of the occurrences that bait and switch comprise turn out to be a fraud.

Explaining Bait and Switch

In this context, the bait and switch psychology is quite attractive. Bait refers to an advertised product or service that has an appealing Factor, which could be a term or a price. If it is in regards to an investment or a loan, a bait could also be a better interest rate in comparison to other providers.

Once the customer goes into the store to get more information about this advertised product, the advertiser will try to sell a more expensive product to the customer, which is known as the switch in this tactic.

In several countries, the implementation of bait and switch tactic in the form of false marketing is subject to lawsuits. However, if the advertiser is selling the same product as advertised, instead of another expensive one, it raises no course of action.

Example of Bait and Switch

Although quite uncommon, the bait and switch strategy has acquired enough attention in the loan and mortgage Market as a dishonest marketing tactic that is meant to increase business. For instance, a company or an agent posts an extremely low-interest rate, knowing well that a majority of people will unqualify for this offer.

Once customers start coming in to get more information, the agent puts forth another option with a high interest rate; thus, earning a satisfactory commission. The same scenario can be seen in the auto financing Industry.

Here, buyers get attracted by the possibility of acquiring a car loan with lower interest rates. However, in reality, only a handful of them get qualified for the same. Apart from these two, the bait and switch strategy is also popular in other domains, including Real Estate, restaurants, supermarkets, hotels, and more.