30+ Years of Dealership & Manufacturer Expertise - Approved Academy
30+ Years of Expert Retail Dealer Operations and Manufacturer Experience - Approved Course
9.14 “Bait and Switch”, “Bird Dog Fees”
Bait and switch is a deceptive practice where a dealer advertises a vehicle at an attractive price (the “bait”) with no intention of actually selling that vehicle, and instead tries to steer the customer to a different, more expensive vehicle (the “switch”). Under Vehicle Code Section 11713.1, this is explicitly unlawful. If you advertise a vehicle, that vehicle must be available for purchase at the advertised price and terms. If the vehicle sells before a customer arrives, you can offer an alternative, but you cannot refuse to sell the advertised vehicle to push the customer toward a more profitable deal.
“Bird dog fees” refer to payments made to people who refer customers to your dealership. The term comes from the idea of sending “birds” (customers) to the dealer. While referral fees are not inherently illegal, they become problematic when paid to unlicensed individuals who are essentially acting as unlicensed salespersons. If someone is actively soliciting customers, negotiating vehicle terms, or steering buyers to your dealership in exchange for a per-deal payment, they may be functioning as an unlicensed salesperson — which, as we just discussed, is unlawful for you to employ.
The safest approach with referral fees is to keep them simple and transparent: a flat fee for a referral, paid to an individual who simply recommends your dealership to a friend or family member, without any involvement in the actual sales process. If the referral person is doing more than just providing a name, you’re in dangerous territory.