Reading time: 3 minutes

Bait advertising is how businesses hook you in by advertising products or services at irresistibly low prices, but then do not intend to honour that price when a customer enquires about it. A business might suggest an alternative product to the customer or ask them to purchase the original product at a higher price. The business may explain the higher price by claiming they don’t have enough supply of the product.

Importantly, Australian Consumer Law prohibits this conduct. To be found breaching this law, a business only needs to be aware of the circumstances that would prevent them from being able to meet their advertised offer. This is not a very high threshold, and can easily catch out businesses.

Case Breakdown: Wallace v Walplan Pty Ltd

By way of example, let’s look at Wallace v Walplan Pty Ltd (1985). Here, a car dealer advertised for sale a Ford Falcon XD Sedan and a Holden Commodore Sedan. They offered the vehicles for sale at a special price of $2,990 in a full-page advertisement in a newspaper. The ad showed pictures of the cars and the heading said ‘$300 cash deposit or your car as full deposit’. The car dealer advertised each one with a reference to ‘$22.59 a week’. The advertisement’s footnote, however, said ‘prices remain for one week’ and that ‘all vehicles in stock at the date of compiling advertisement’.

When a customer came to purchase the vehicle, the car dealership salesman said the proposals in the advertisement were not available and he would have to speak to his manager. The customer returned later that day to see the manager at which point, another individual intercepted him saying that he had just bought the cars. He then offered them for sale at a higher price. The customer left and later called the dealership. He confirmed with them that the cars were in fact still available for purchase.

This case is a clear example of bait advertising where the dealership did not intend to offer the cars for the purchase price of $2,990. Rather, they used the offer to entice potential customers to their premises and then informed them of the higher price.

How to Protect Your Business

To make sure you don’t inadvertently use bait advertising when offering special prices or promotions, it is important that you think about offering that product for a reasonable period and in reasonable quantities.

This means that you should ask yourself:

  • Do I have sufficient stock to satisfy the anticipated consumer demand?
  • Is the offer reasonable for the industry or market that my business operates in?

For example, if you sell custom furniture, your promotion promising a handcrafted dining table in two days may not be realistic and could be perceived as bait advertising.

Conclusion

If you need expert advice on your advertising or marketing material, get in touch with us on 1300 544 755. We have assisted many businesses in making sure their advertisements are legally compliant, get across the right message and entice customers to their door.

Webinars

Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

Online
If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Online
Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Online
Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Online
Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Online
Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Online
Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Online
Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

Online
As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Bianca-Reynolds
Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards