A “bait and switch” takes place when a seller creates an appealing but ingenuine offer to sell a product or service, which the seller does not actually intend to sell. This initial advertised offer is “the bait.” Then the seller switches customers from buying the advertised product or service that the seller initially offered into buying a different product or service that is usually at a higher price or has some other advantageous effect to the advertiser. This is the “switch.” Normally, the switched product that the consumer buys is usually at a higher purchase price, an increased profit for the seller, or may have a less marketable characteristic than the product advertised.
A “bait and switch” is different from a "loss-leader" sale, which is when a seller specifically notifies the customer that only a limited number of units of a product are for sale at a discount. “Bait and switch” advertising is grounds for an action of common-law fraud, unjust enrichment, and sometimes breach of contract. A “bait and switch” is also a violation of the Consumer Fraud and Deceptive Business Practices Act.
In Federal Claims courts, the key components for evaluating a claim of improper bait-and-switch” by the recipient of a contract are whether: (1) the seller represented in its initial proposal that they would rely on certain specified employees/staff when performing the services; (2) the recipient relied on this representation of information when evaluating the proposal; (3) it was foreseeable and probable that the employees/staff named in the initial proposal would not be available to implement the contract work; and (4) employees/staff other than those listed in the initial proposal instead were or would be performing the services.
[Last updated in May of 2020 by the Wex Definitions Team]