What is bait-and-switch?
Bait-and-switch is a morally questionable sales tactic that seduces customers with specific claims about the quality or low prices of products that are found to be unavailable in order to upsell them with similar, more expensive products. .. It occurs in other situations, but is considered a form of retail sales scam. Many countries have laws prohibiting the use of bait-and-switch, but not all events constitute fraud.
- Bait-and-switch occurs when prospects are tempted by advertised transactions that they find attractive.
- However, the transaction being advertised does not exist or is inferior in quality and specifications, and the buyer is offered an upsell.
- This practice is considered unethical and is illegal in many jurisdictions.
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A “bait” in bait-and-switch may be an advertised physical product or service with a particularly attractive price or condition. For mortgages, loans, or investment products, it can also take the form of teaser interest rates. When a customer comes to a store or office and asks about the price or price being advertised, the advertiser tries to sell the more expensive products that make up the “switch” to the customer.
Bait-and-switch can be the subject of proceedings in many countries, including the United States, United Kingdom and Canada, as a form of false advertising. However, if advertisers can sell their advertised teaser products, no matter how aggressive they are in trying to upsell potential customers to more expensive products, there is no policy of conduct for consumers.
In the United States, promoting a limited number of teaser items (eg, loss leaders) is perfectly legal as long as you advertise that a limited number are available and provide a rain check if you have the item. is. It is sold out.
Example of bait-and-switch
Although relatively rare, bait-and-switch is notorious in the mortgage market as a potentially malicious marketing tactic aimed at driving business. Under mortgage bait-and-switch, agents or companies post very low mortgage rates, fully aware that the majority of applicants cannot qualify for these teaser rates. When customers start coming to the office to inquire about low rates, agents start offering them higher rates that they are likely to qualify for, and therefore earn more fees.
A similar strategy can be found in car purchase financing. In this case, the buyer is fascinated by the possibility of a mortgage with a low interest rate of 0%. In reality, very few (if any) are eligible for such charges.
Tactics like bait-and-switch are common in other efforts.
- In real estate, some malicious brokers may promote great real estate at prices that are too good to attract potential buyers. Once they board, the property in question will be unavailable.
- Restaurants and supermarkets have found that about one-third of the fish sold (and so priced) as one species are another cheaper species.
- The hotel offers low teaser rates to attract guests who later suffer from hidden resort rates and other unexpected, minimally disclosed rates.
- Headhunters may post attractive yet fake work to collect resumes.