High pressure sales tactics aren’t only illegal, they’re bad for business. Overpromising, misrepresenting your products, or misrepresenting your customers can get you into a lot of hot water. Before you use these strategies chasing your next quota, think about the legal ramifications.
Bait and switch is a dishonest, and often illegal, form of sales and marketing. Companies will market one product at a low price, baiting customers to come into a store, but may not carry sufficient inventory of it. When customers come in to buy that advertised product at the advertised price, high-pressure sales associates will either switch the product they are hustling, usually at higher margins, or they will say that they are out of stock of the advertised product, but they have a similar product for a comparable price, again usually at higher margins to the company. As tempting as this is, companies should not do it. This is fraud, and actionable under most states’ consumer laws, including California.
Misrepresenting Your Product
As great as you think your product may be, make sure that your salespeople aren’t overpromising what it can actually do. Doing so creates fraudulent misrepresentation. If your salespeople make false claims about a product’s ability, whether in writing or verbal or even through silence, you could be liable for fraud. Of special note – ignorance is no excuse in this case. Sometimes salespeople don’t exactly know what the product they are selling actually does, or doesn’t do. But if the salesperson is even reckless in their representations, that can be fraudulent too.
Misrepresenting Your Customers
We’ve all had it happen to us. A door-to-door salesperson comes by to sell something, and tells you your neighbor two doors down just bought the product from him. It sounds convincing – he even calls your neighbor by name. You think a lot of that neighbor, so you buy the product. You then call the neighbor only to find out they turned the salesperson down cold. This too is fraudulent misrepresentation, but of a different kind, and is illegal as well.
The standard remedy for fraud is that the contact is voidable, at the very least. If the fraud is aggressive or persistent, there could be added penalties involved, primarily financial. So before you send your sales force out into the field, make sure you’ve reviewed the legality of their sales tactics. If you are unsure, contact a local business attorney, who can review your sales program and give you a legal blessing, and maybe even a few tips!