What is Bait Pricing?

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So much that most of them are resorting to fraudulent means in order to increase the rate of their sales and attract more consumers. Such means include giving false information on the products in order to up dupe the consumers into purchasing more of the product. Some companies will lie to their consumers about the ingredients of their products while some will withhold some information about the negative impact of the product on the environment and the consumer’s health and wellness. This is nothing compared to the tactics of some firms such as the bait and switch tactic.

What You Need to Know About the Bait and Switch Technique

This technique is also commonly referred to as the bait pricing technique which is actually a short version of the name. The bait in this context refers to a physical product or a service that is advertised with an attractive price or some attractive terms. At times the advertisement involves a teaser interest rate especially in the case of a loan, an investment or a mortgage. The concept of the switch comes in where once the customer or consumer goes to the store to purchase the item or acquire the service, the advertiser will make an attempt to sell the product or service at a more expensive price as compared to the advertised price. The aim is mostly to get clients into the store since they are well aware that a good number of those that will show up at the stores will not leave without the product, hence will have to purchase it at the high price.

In cases of mortgages or loans, the agents will advertise or post notably low rates. What happens is that these agents are aware that even with the teaser rates, most applications will not be able to qualify and those that will be able to qualify are capable of paying higher rates. When the customer visits the offices to inquire about the rates, they are presented with higher rates. This tactic is also used in other areas like real estate, restaurant and supermarkets, hotels, and head hunters.

Several countries have laws against bait and switch practices. In these countries, this is seen as a form of retail sales fraud and frowned upon. However, in some countries, this is completely legal. Such countries like the United States recognize the fact that in most circumstances, the bait and switch practice is not used to lie to the consumers but as a measure of creating more awareness for a new product. Such products are usually mostly disposable or consumable products. The products go at a lower price for a short time with the aim of familiarizing consumers to the products. The bait pricing technique may also be used with the company is attempting to clear sales. In such cases, this technique is not considered illegal and unlawful. However, if the aim is to dupe clients, then it is frowned upon.

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