When bait advertising bites

WA Department of Mines, Industry Regulation and Safety

It may be a familiar scenario for some shoppers – you spot an advert for a product at a very attractive sale price and place an order, but it’s later cancelled by the retailer claiming the item is ‘out-of-stock.’

Consumers may be left wondering whether the business is obliged to honour the discounted price, regardless of whether the item had genuinely sold-out or if a mistake had been made during the advertising process.

The answer depends on a number of factors. Bait advertising – where sale prices and special offers are promoted to attract customers – is a legitimate form of advertising, but only if the trader provides sufficient quantities of the product to meet the anticipated demand. The only exception to this rule is if it’s made very clear in the advert that the discounted goods are available for “today only” or “while stocks last” for example.

Let’s say a retailer advertises a week-long sale on a product and it would usually expect to sell thirty of those items in a week, but stocks just two items at the advertised price that sell-out in one or two days. This is likely to be illegal bait advertising and a breach of Australian Consumer Law (ACL) because the retailer does not have a reasonable supply of the advertised product.

In a situation like this, a consumer may be entitled to receive a remedy, such as a ‘rain check’ (a coupon guaranteeing an out-of-stock sale item may be purchased at a later date at the same reduced price) or an acceptable substitute product at the same discounted price. Alternatively, to avoid breaching the ACL, a retailer can publish a retraction to a similar audience or circulation number as the original advert.

Remember that it makes no difference whether a business intends to mislead customers or not. If the overall impression of any advertisement, promotion, quotation or representation leaves a misleading impression in customers’ minds – regarding price, value or quality – then the behaviour is likely to breach the law.

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