A:

The bait and switch is a advertising technique which can be considered illegal, but in most cases is merely looked upon as dishonest. In a typical bait and switch, a business will advertise prices or rates which are exceptionally low in order to garner attention and motivate customers to inquire. Once the unsuspecting customers arrive at the business, the salesman or business owner will inform customers that the advertised price is no longer available, or that the customers do not meet the requirements to qualify for the advertised price. The salesman or owner will then attempt to sell the customers a product or service which is more expensive as a substitute for the advertised product or service.

The bait and switch has gained the dubious distinction in the mortgage sector, where it may be common place for mortgage providers to advertise unbelievably low rates that for which the vast majority of applicants would not qualify, thus forcing customers to settle for less-desirable rates. (To learn more, see Homeowners, Beware These Scams!)

This question was answered by Lovey Grewal.

RELATED FAQS
  1. What are the key differences between marketing and advertising?

    Understanding the role advertising plays in the marketing mix will help business owners define their promotional strategies ... Read Answer >>
  2. How important is advertising revenue in the Internet sector?

    Learn about the importance of advertising revenue in the Internet industry. Find out how much Internet firms rely on advertising ... Read Answer >>
  3. What are some of the ways that a company can improve its brand equity?

    Learn why brand equity is so valuable in business. These strategies for gaining high exposure and a great reputation will ... Read Answer >>
  4. Is good customer service something to look for in a company in which I am considering ...

    Learn about the importance of customer service when deciding whether to invest in a stock. Good customer service can ensure ... Read Answer >>
  5. How does a customer base dictate goodwill?

    Find out how a customer base dictates the value of the goodwill by providing a ready market for its products and spreading ... Read Answer >>
  6. How Does Facebook Make Money?

    The social network has gone from losses to a money spinner in a short span of time. Where do its profits come from? Read Answer >>
Related Articles
  1. Small Business

    How is Programmatic Advertising Changing Media?

    Understand what programmatic advertising is as well as the technology that drives it. Learn about the top four ways programmatic advertising is changing media.
  2. Small Business

    Trends And Growth In The Digital Advertising Industry

    The rapidly expanding digital advertising industry is leading a shift towards content and demanding forced innovation.
  3. Small Business

    Advertising From TV To Internet: An Industry History

    Changes in television consumption habits have forced advertising to target audiences through new means, namely Internet advertising.
  4. Small Business

    How The Internet Web Ad Industry Works

    Over the past 10 years, advertising strategies have evolved as a result of technological development as the internet has provided new channels for advertisers to reach a larger audience.
  5. Small Business

    Where Are Advertisers Spending Their Money?

    We list five outlets where advertisers are spending their money, and how these trends developed.
  6. Small Business

    Advertising, Crocodiles And Moats

    Memorable advertising is a brick in the fortress that keeps competitors at bay.
  7. Investing

    Why Facebook Is Free to Use (FB)

    Learn why Facebook is free to users, and understand how the company makes more money by charging advertisers than it would if it charged users.
  8. Insights

    YouTube Advertisers Ask For Discounts

    Advertisers on video distribution platform YouTube are demanding Google to make targeted advertising a standard offering.
  9. Investing

    Google and Facebook Run 57% of All Digital Advertising Worldwide

    What does this mean for investors and the rest of the pitiful digital ads ecosystem?
  10. Managing Wealth

    3 Dishonest Broker Tactics

    Learn how to spot three dishonest techniques that your broker might be using on you.
RELATED TERMS
  1. Bait And Switch

    A dishonest marketing tactic in which a marketer advertises a ...
  2. Bait Record

    An internal control used in accounting to detect fraud and improper ...
  3. Advertising Appropriation

    The portion of the total marketing budget that is allocated to ...
  4. Flighting

    An advertising scheduling strategy in which a business alternates ...
  5. Advertising Elasticity Of Demand - AED

    A measure of a market's sensitivity to increases or decreases ...
  6. Advertising Federation Of America - AFA

    A regional advertising group based on the U.S. East Coast that ...
Hot Definitions
  1. Free Cash Flow - FCF

    A measure of financial performance calculated as operating cash flow minus capital expenditures. Free cash flow (FCF) represents ...
  2. Leverage Ratio

    Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to ...
  3. Two And Twenty

    A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. ...
  4. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  5. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
  6. Mezzanine Financing

    A hybrid of debt and equity financing that is typically used to finance the expansion of existing companies. Mezzanine financing ...
Trading Center