Reminder: Legitimate Pricing Errors Are Not Bait And Switch

Once again, a retailer is making headlines with shoppers angry they aren’t getting the items they ordered at obviously erroneous prices. This time it’s Walmart.com, which experienced a major glitch yesterday, attaching incorrect prices to numerous items. So this is a good time to remind everyone that this is not a “bait and switch” and that retailers are generally not under any obligation to honor pricing errors.

It’s been a couple years since we ran down the basics of what constitutes bait and switch, so here’s a refresher course.

As the name implies, there are two key parts to bait and switch. The first part, the “bait” requires that there is a deliberate intention to deceive the customer.

Per the Federal Trade Commission, the bait’s purpose is trick a customer into shopping for the initial offer while having no intention to ever sell them that product in the first place.

One could make the argument — and this is really stretching it — that since Walmart.com never intended to sell these incorrectly priced products at the incorrect prices, that this counts as “bait.” We don’t hold to that theory, but just in case you do, let’s then consider the second part of the bait and switch.

In the “switch” portion of a bait and switch scam, the retailer takes the lured-in customer and gets them to purchase a more expensive product or to pay more for the original product than was initially advertised.

In the Walmart.com case, the company is canceling orders and giving customers a $10 Walmart gift card. If the retailer, instead of cancelling orders, told the customers “Sorry you ordered that $500 computer for $25… how about you pay us $450 and we’ll call it a deal?”, or if they wrote to customers and said “We can’t sell you that computer for $25, but here’s one you might like for $350,” you could make the bait and switch argument.

The whole point of a bait and switch scam is for the scammer to benefit financially. Walmart reaps no benefit from mislabeling products for hundreds of dollars below the retail price.

It may actually be risky on Walmart’s part to hand out the $10 gift cards, as some could make the argument that this is an enticement to spend money at the store, and that Walmart ultimately benefits from the purchases made with these cards since numerous studies show that people tend to spend more when shopping with gift cards.

We don’t think that’s Walmart’s intention, but we wouldn’t be surprised if someone decided to test this argument in court.