Can businesses advertise products that are out of stock in Australia?
No, businesses generally cannot advertise out-of-stock products to lure customers in Australia. Under the Australian Consumer Law, this is known as "bait advertising" and is illegal. Businesses must have a reasonable supply of the advertised product or clearly state if quantities are limited.
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How it works in practice
What is Bait Advertising?
Under the Australian Consumer Law (ACL), businesses are legally prohibited from engaging in "bait advertising." This occurs when a company advertises a product at a specific price to attract customers but does not have a reasonable supply of that item available.
Reasonable Supply Requirements
When a business promotes a sale or special price, they must have reasonable grounds to believe they can supply the product in expected quantities and for a reasonable duration. Advertising an item that is already out of stock, or having only a minimal amount without disclosing it, is considered misleading and illegal conduct.
Consumer Remedies and Rainchecks
If an advertised product runs out of stock faster than reasonably expected, the business should offer a remedy to remain compliant. Often, this involves providing a "raincheck," allowing the consumer to purchase the item at the advertised price when restocked, or offering an equivalent substitute product at the same discounted price.
Important exceptions
There are exceptions where a business is not liable for bait advertising. If a business clearly and prominently states in the advertisement that stock is highly limited (e.g., "only 5 left" or "strictly while stocks last"), they are generally protected.
Additionally, if an unexpected and completely unavoidable surge in demand causes the item to sell out immediately despite the business ordering a normally reasonable quantity, it may not be considered illegal bait advertising. Genuine supply chain failures outside the business's control can also serve as a valid defense.
What you should do now
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Take a screenshot or keep a copy of the advertisement showing the product and its promotional price.
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Ask the store manager or customer service representative to provide a "raincheck" to buy the item later at the advertised price.
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Request a substitute product of similar value and quality at the discounted price if a raincheck is unavailable.
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Keep records of your communication with the business, including their refusal to honor the promotion or provide a remedy.
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File a formal complaint with the Australian Competition and Consumer Commission (ACCC) or your local state consumer protection agency if the business refuses to assist.
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