Definition of Bait and Switch

What is a bait and switch? What is the definition of the term bait and switch?

A "bait and switch" is an underhanded sales tactic that involves trying to entice a customer with an unrealistic deal (rock bottom interest rates, super low cost) and then switching the deal and trying to get them to purchase something that will cost them more money.

Definition of Bait and Switch - Financial DictionaryFor instance - let's say that a shady mortgage broker offers customers an unbelievably low interest rate in one of their ads. A potential customer walks through the door and is informed that they do not qualify for this low rate. In reality, the mortgage broker knows that only a tiny percentage of the population would qualify for the low rate due to the extremely over-the-top stipulations for qualifying for the low rate.

The mortgage broker instead offers a much higher rate, hoping that the customer will go for it.

This is a classic "bait and switch".

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