http://www.natlawreview.com/article/michael-kors-costco-settle-bait-and-switch-mother-s-day-ad-dispute-raises-question-b

Photo Credit: http://www.letterstolashes.com/2013/04/lust-list-michael-kors-selma-handbag.html

Costco’s Mother’s Day advertisement misled customer’s into thinking that they could purchase hugely discounted Michael Kors handbag at Costco. However, according to representatives of Michael Kors, Costco is not authorised to retail Michael Kor handbags. Although Costco’s promotional strategy seems like lying to the customers, it did increased Costco’s sales revenue for Mother’s Day. This is because customer’s most likely purchased other goods they were not intended to purchase while they were at Costco.

Costco used an unethical marketing practice, named “bait-and-switch.” This is when businesses attract customers by advertising very cheap products, but often only a very limited amount is available to the first few buyers. In this case, Costco is advertising for something that they do not even provide. Customers that are attracted by this bait have to switch to alternatives or buy other products, since they are already at Costco. What Costco did was unethical to both customers and Michael Kors. Although Costco could have benefited from this in the short-term (increase in sales revenue). This is harmful to Costco’s reputation in the long-term. After reading and analysing the article, other questions such as “to what extent does false advertising become unethical” and “if false advertising is unethical, how is it regulated?” were raised.