## Facts

- The State of Wisconsin sued American TV & Appliance of Madison, Inc., seeking forfeitures for allegedly deceptive advertising under Wis. Stat. § 100.18.
- American ran radio advertisements offering a washer-and-dryer set for $499 during a sale.
- For the promotion, American bought 20 sets of the advertised $499 model (at a cost of $520 per set) and also stocked 133 higher-priced sets of a different model.
- During the sale period, American sold four of the $499 sets and sold many of the higher-priced sets displayed nearby.
- The State alleged American displayed the discounted sets next to higher-priced sets and used commission-based pay that incentivized salespeople to steer customers toward higher-priced units.
- The complaint did not allege that American refused to sell the advertised sets, falsely claimed they were unavailable, or disparaged the advertised sets to induce substitution.
- The circuit court dismissed for failure to state a claim; the court of appeals reversed; the Wisconsin Supreme Court granted review.

## Issues

1. Whether allegations of limited stock, below-cost pricing, product placement, commission incentives, and a resulting sales mix plausibly stated a claim for “bait-and-switch” advertising under Wis. Stat. § 100.18 absent allegations of specific “switch” conduct (e.g., refusal to sell, false unavailability, disparagement, or deceptive pressure).

## Decision

- The Wisconsin Supreme Court reversed the court of appeals and reinstated the circuit court’s dismissal for failure to state a claim.
- The court held the pleaded facts did not allege a non-bona-fide offer or deceptive “switch” tactics sufficient to constitute bait-and-switch under § 100.18.
- The court concluded the State’s theory relied primarily on inference from circumstantial indicators (inventory levels, loss-leader pricing, commissions, and sales outcomes), which was inadequate without allegations of deceptive conduct directed at consumers.

## Legal Principles

- Wis. Stat. § 100.18 requires allegations of an untrue, deceptive, or misleading representation or practice made to the public with intent to induce a transaction.
- “Bait-and-switch” is a specific form of deceptive advertising involving a sham or fictitious bargain used to draw customers in, coupled with tactics that divert them to different, typically higher-priced goods.
- To plead bait-and-switch, allegations should include conduct showing the advertised offer was not bona fide, such as refusal to sell the advertised item, false claims of unavailability, disparagement of the advertised product, or other deceptive inducements to substitute.
- Routine retail practices—limited-quantity specials, loss-leader pricing, displaying higher-priced alternatives nearby, and commission compensation—do not, without additional deceptive “switch” allegations, state a claim under § 100.18.

## Conclusion

The court held that a bait-and-switch claim under Wisconsin’s deceptive advertising statute requires pleaded facts showing a sham bargain and concrete deceptive switching conduct; circumstantial indicators like limited inventory, commissions, and disproportionate sales of higher-priced goods were insufficient on their own to survive dismissal.


State v. Am. TV & Appliance of Madison, Inc., 146 Wis. 2d 292, 430 N.W.2d 709 (Wis. 1988)