Harper Grey: The ol’ Bait and Switch


The Savvy Shopper - Harper Grey

Everyone’s familiar with the term, Bait and Switch. And most people know that it’s illegal. The Federal Trade Commission defines this nefarious advertising technique as, “an alluring but insincere offer to sell a product or service which the advertiser in truth does not intend or want to sell.” There’s a fine line between illegal “bait and switch” and legal, but shady offers. Most companies don’t break the law, but many bump right up against it with the misguided notion that they’ll increase business by reeling in customers with a “free” offer they don’t really want to give. If you’re pushing the envelope on this technique, I’m here to tell you – your customers might not be able to sue, but they will tell others about their nasty experiences and hurt your business.

I recently decided it was time to drop a few pounds, and decided to join a gym. There’s only one in my small town – a franchise of a large, worldwide company that I’m certain you’ve heard of but will not be named here. We’ll call it Big Gym. Their website featured a special: a discounted sign-up fee, $5 off per month and a FREE one-week membership (with a two-year contract). I called them and scheduled a tour.

Alex* was my host that morning. He was pleasant and the gym was nice – the staff seemed friendly, the locker room was spotless and the equipment was state-of-the-art. After the tour, Alex escorted me to his “office” – a bare cubicle graced only by a bodybuilder calendar – and I braced myself for the sales pitch. He didn’t try to sell me a more expensive membership, though – he offered me the special featured on the website. So far, so good. I told him that I was thrilled with the gym, the membership discounts and the opportunity to whittle my butt down to an acceptable size. But I wanted to take advantage of the one week free membership to make sure that the gym was a good fit for me. At the end of that week, I assured him, I would almost certainly sign up.

Alex was not happy. He began to shuffle through papers, frowning and muttering under his breath. “Well,” he said, “I can certainly give you the free one week membership if you insist. But, the pricing will change.” Really? The website didn’t say anything about pricing changes. “The special pricing is only good on your first visit to the gym,” Alex explained. “If you don’t sign a contract today, the membership is $5 more per month, and there’s no $100 sign-up discount.”

I stood my ground, so Alex went to speak to his manager. In the meantime, I did some math. An extra $5 per month for 24 months, plus an extra $100 sign-up fee, meant that I would be paying $220 more if I wasn’t given the special pricing. Which I couldn’t have if I used the one week “free” membership. So, in effect, the “free” membership would cost me $220! Now I’m no math whiz . . . but $220 and FREE ain’t the same thing. Alex came back to tell me that I could either sign up or lose the “savings.” At that point, we parted ways – both of us unhappy and unsatisfied.

I went home and did some research. Big Gym has gyms all over the world, and if you are a member, you can work out at ANY location. I called another Big Gym franchise 20 miles away and spoke to the manager, who told me that the owner of my town’s Big Gym was notorious for shady sales practices because he figured, since he owned the only gym in town, he could do things however he wanted. I was told that the Big Gym company intended that the special pricing be available to anyone, at any time while the promotion lasted – even if I visited the gym repeatedly and took my time deciding.

I consider myself to be a reasonable woman, and I wanted to buy what Big Gym was selling. But I didn’t appreciate being yanked around. I’m not a fish to be reeled in with a “bait” offer . . . I’m a customer. And even if Big Gym is the only gym in town, I want to feel like they care about having my business.

In the end, I got what I wanted. I signed up with the other Big Gym franchise. That gym got to claim my membership and also collect a $25 annual fee for “equipment maintenance.” I got the special pricing and saved the $220 that I had been promised. I’ve never stepped foot into that location – it’s 20 miles away, after all. Instead, I work out five times a week at my hometown gym.

Oh yeah . . . and I’m not the only fish who got away. I’ve since told five people in my town about this little trick and they’ve all signed up with the other franchise location . . . then work out at our local Big Gym. I suppose that if enough people did this, our Big Gym would really suffer – we’re using the facilities, but they’re not getting annual maintenance fees or franchise credit for the membership numbers.

The “free” trial offer is a great way to introduce new customers to your products or services, as long as you are really willing to provide the free sample. Don’t ever assume that your customers can be bullied into doing business with you. Consumers are savvy – they’ll check the Internet and shop around other businesses if they decide that you aren’t keeping your promises. Don’t “reel ‘em in,” impress them with your great promotional offer, and follow that up with stellar customer service.

The FTC offers Guides Against Bait Advertising. Take a look . . . and make sure that your company isn’t treating customers like fish.

*Not his real name. Poor Alex was a victim of his manager’s lousy ethics. He’s a nice enough guy and I already feel bad enough that he didn’t get a commission on my membership.

Nelson James

Nelson James is the chief operating officer of Signs.com and is responsible for the day-to-day operations of the company. Prior to joining the Signs.com team, Nelson was the president and co-founder of SEO.com. For over 6 years he helped to grow the company from 2 to over 85 employees. Nelson managed many large accounts during his tenure at SEO.com, including Dell.com. In early 2011, Nelson was recruited to Lendio Inc., where he was VP of marketing and was responsible for the creation and management of a marketing team as well as the strategy, tactics and programs to create interest and demand for Lendio’s products and services. Prior to his work experience, Nelson graduated Cum Laude from Brigham Young University in marketing and advertising from the communications department. Nelson lives in Lehi, Utah with his wife and three children. He currently holds leadership positions in scouting and volunteers in his church and community.