Tuesday, 22 May 2012

Bait Advertising on "Deal of The Day" Websites

     Why is it allowable for "Deal of The Day" type websites to get away with "Bait Advertising" without having any repercussions?  Their usual daily sales methods aren't too bad in my experience, with the companies providing reasonable stock levels - why wouldn't they, if they're still managing to sell their products at a profit?  But every so often they decide they need to drum up some free publicity and so hold a special "sale" event.
     During these special events the companies will generally "sell" a number of different products at a very discounted price (far below the point where I would believe they can make a profit off it) to draw people to their websites.  They also seem generally to like to be able promote the sale after the fact, something along the lines of "Look at this, we sold product X for half of it's RRP!  You should come and check out our website tomorrow and see what else we're selling!"
     The downside for the consumer of these (very good) prices is that there's typically an abysmally small amount of stock.  The ACCC calls this "Bait Advertising" and it's illegal.  From the ACCC website:


Bait advertising

'Bait advertising' describes the situation when a trader advertises goods at a certain price (usually a 'sale' price) but does not have a reasonable supply. What is a 'reasonable supply' will depend on several things, including the type of product and the way it was promoted or advertised.
If a trader has genuinely underestimated the popularity of a sale product, it may not be considered bait advertising.
For example, an electronics retailer runs a major national campaign advertising 50-inch televisions at a low price of $799 for a week-long sale. The retailer usually sells about 30 televisions of this type every week. The retailer only stocks two televisions at the advertised price and refuses to take customer orders. When customers attempt to buy the television at the advertised price, they are told it is out of stock and offered a more expensive unit for $999. This is likely to be bait advertising as the retailer does not have a reasonable supply of the advertised television.




     It's an illegal (and immoral) business practice.  If you're advertising a popular product at less than half of the typically available price (let alone RRP) you can expect demand to be huge.  If you sell out of a product less than 2 minutes after it goes on sale, then I don't think anybody could successfully argue that you had a "reasonable supply" and "genuinely underestimated the popularity of a sale product".

     Don't just accept it people, file a complaint - if you don't it'll only encourage companies to engage in dodgy business practices at your expense.