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Bait Marketing: An analysis in terms of the CPA

Bait Marketing: An analysis in terms of the CPA

Bait marketing explained

Consumers are often “baited” by merchants that are advertising goods with specific qualities and functionalities at a discounted price. However, when consumers visit the store, they discover that the advertised goods are either out of stock or the quality is not as good as was expected and are subsequently pressured by the sales staff to consider similar or other discounted goods, at a higher price.

The intention of merchants using Bait Marketing is to lure the consumers into the store, satisfying consumers with available stock being offered as an alternative to a disappointment, or inconvenience of acquiring no goods at all, hence have an increased number of consumer’s coming through the doors. It is standard practice for the merchant not to show the original goods as advertised, but instead will demonstrate a more expensive product or similar product with a higher profit margin.

The Consumer Protection Act on Bait Marketing

Section 30 of the Consumer Protection Act (CPA) 68 of 2008 stipulates the following:

“A supplier must not advertise any particular goods or services as being available at a specified price in a manner that may result in consumers being misled or deceived in any respect relating to the actual availability of those goods or services from that supplier, at that advertised price.

“If a supplier advertises particular goods or services as being available at a specified price, and the advertisement expressly states limitation in respect of the availability of those goods or services from that supplier at that price, the supplier must make those goods or services available at that price, to the extent of the expressed limits”.

The Advertising Standards Authority (ASA) has upheld a complaint from a consumer who allegedly to buy a laptop that was advertised for R3 999,00. However the specific laptop was out of stock and would only become available to the consumer a month later.

The ASA stated in this matter that advertisers should not offer products or services if they did not reasonably expect to satisfy the likely demand. The aforesaid is specifically addressed in Section 30 of the CPA, which places the responsibility on advertisers to ensure that sufficient planning is done and sales records are analysed prior to placing an advertisement. The merchandiser was subsequently cautioned to ensure that sufficient levels of stock were available before embarking on promotional offers.

Bait Marketing can take many guises and vary in degree of severity

An example in this regard would be that some Hotels worldwide use a form of Bait Marketing by implementing “resort fees”. They initially attract customers by advertising a lower price (which appears on all promotional materials and rate comparison engines), and subsequently charge customers the mandatory “resort fee” which is not communicated or advertised, when they arrive for check-in.

Another form of Bait Marketing exists when merchants advertise goods, knowing that only a limited amount of stock is available to the consumers and the limitation is not communicated or advertised.

The National Consumer Commission (NCC) of South Africa as well as the Consumer Goods and Services Ombud (CGSO) will have jurisdiction if a consumer files a complaint in terms of Section 30 of the CPA. Therefore, business owners need to take note of the stipulations of Section 30 as consumers are becoming more informed and educated of their rights in terms of the CPA.

An informed consumer not only has the potential to inflict unnecessary financial damage to a business, but also reputational damage.

ABOUT THE AUTHOR

Charl Fourie is currently a SEESA Consumer Protection & POPI Legal Advisor since 2008. Prior to employment at SEESA, he worked as a Civil Attorney for 4 years.

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