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Department of Justice and Community Safety

ADVERTISING

BAIT ADVERTISING

What is "bait advertising"?

Bait advertising is an offence under section 21 of the Fair Trading Act (the Act). Such advertising occurs when a person advertises goods or services at a specified price, knowing that he/she will be unable to supply these goods or services at that price in reasonable quantities and for a reasonable time.

This practice has been made illegal to prevent businesses from enticing consumers into their store with the promise of a bargain which cannot be delivered, and then convincing them to purchase something else. This may be a similar product at a higher price, or something completely different. The purpose of the advertisement is to get the consumer into the store and not to offer the anticipated bargain.

What is a "reasonable quantity" and a "reasonable time"?

What is considered to be "reasonable" depends on the nature of the advertisement and the type of market. It is not enough for the advertisement to contain a disclaimer such as "Goods available while stocks last" or "We accept no responsibility for any item in this catalogue being unavailable". A statement such as "Only 15 available", however, would be acceptable.

The business should be able to reasonably anticipate what the sales figures will be and thus ensure that the item(s) will be available for a reasonable time. A business would base its assessment on previous sales figures, the amount of the reduction offered and other such indicators. For example, if a $1000 fridge was offered for $600, a far greater demand would be expected than if the same fridge was offered for $950.

What can the business do to avoid a breach of the Act?

If the goods or services cannot be supplied at the time of the advertisement, there are two things the retailer could do to avoid breaching the Act.

  • He/she can offer a "raincheck", whereby he/she will supply the consumer with the same or equivalent item(s) at the advertised price within a reasonable time.
  • He/she can arrange for another business to supply the consumer with the same or equivalent item(s) at the advertised price within a reasonable time.

If the retailer could not reasonably be expected to know that the items advertised would not be available for a reasonable time, he/she would not be breaching the Act. An example of this might be if nearby retailers of a product had sold out of it, and demand for it was unusually high.

 

MISLEADING ADVERTISING

Under sections 12 and 14 of the Act, a person is not allowed to engage in misleading or deceptive conduct or to represent goods or services falsely.

Relating this to advertising, this prohibition means that a person cannot release an advertisement which is likely to mislead or deceive you, for example offering a "free addition" to a product, when in fact this "addition" is an integral part of the product and would normally be included in the price.

Businesses cannot claim that goods and services are something they are not, for example that goods are "Made in Australia" when they aren't. If the country of origin is featured in the advertisement, the advertiser must take care to ensure that the advertising is accurate. Often goods may be made of parts which come from more than one country, or they may have been assembled in a country other than the one which produced the parts. It would be misleading to claim that a product assembled in Australia from parts which came from Japan was "Made in Australia".

See also information on Misleading Information for more information.