Bait and switch - Definition and Overview

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.

Note that in order to constitute a bait and switch, there must be no intention to sell the original bait. 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, but do not constitute a bait and switch as long as it is possible to purchase the original item.

External Links

• 16 CFR 238 (http://www.access.gpo.gov/nara/cfr/waisidx_04/16cfr238_04.html), the U.S. Federal Trade Commission's guides against bait advertising.