Scalpers: Menaces to Society?

Wonder why the newest consoles always get snatched up before you get the chance to buy them? Elton Tan and Isaiah Chua investigates.

Scalpers and their stock of Playstation 5s. Photo taken from VideoGameChronicles.

BY
Elton Tan
Perspectives Section Editor
Hype Issue #53

Isaiah Chua
Lifestyle Section Editor
Hype Issue #53

Published on
Aug 13, 2021

Since the start of the pandemic, there has been an evident problem in the technology and entertainment industry. You only need to take a look at online and physical stores to know what the problem is. From a lack of brand new, newly released consoles, to a lack of computer parts; this problem has one source and one source only. Determined resellers, or what we know them as, scalpers.

Plot and Characters

The term ‘scalper’ has two different meanings. The original, more historical meaning, according to americanheritage.com, are individuals who “cut the crown of hair from a fallen adversary”. This was traditionally done by Indians as a way of collecting and displaying a sign of victory from battles.

The term has indisputably evolved. The “scalpers” we’re now referring to are defined by the economic, more informal meaning of the term. In the late nineteenth century, the term scalper was a generic term for “con man” or “cheater”. This isn’t too far fetched from what we know them as in society today. 

Sneaker reseller

Sneaker resellers use bots to win raffles on hyped sneaker releases. Photo taken from Reddit.

According to Investopedia.com, a scalper is “a person who buys large quantities of in-demand items, such as new electronics or event tickets, at regular price, hoping that the items sell out”. To then earn a profit in exchange for the effort they put in, the scalper resells the given items at a higher price.

Why Scalpers are a problem to today’s society

Scalpers usually target products that are in high demand, such as newly released or limited products. They then proceed to buy many more units of the product than they need in hopes of reselling. If left unchecked, it leaves the average consumer with nothing left to purchase.

Scalpers and their stock of Playstation 5s

Scalpers and their stock of Playstation 5s. Photo taken from VideoGameChronicles.

For instance, currently, the PlayStation 5 (PS5) has been out of stock for months due to scalpers mass purchasing the console using shopping bots (programmes designed for resellers) online. 

According to businessinsider.com, in the sneaker resale world, a “bot” refers to a software application that expedites the online checkout process and helps resellers nab hyped pairs in seconds: including limited-edition drops and collaborations.

They then typically upsell the product for a few hundred dollars more, to the dismay of consumers waiting to buy the console. In turn, this phenomenon has caused an uproar in the gaming community.

As reported by GeekCulture, local scalpers on Ebay and Carousell have been selling PS5 consoles at an inflated price, with offerings of over a thousand dollars. The retail price of the console is S$729 for the standard version and S$599 for the digital version.

“I wanted [the PS5] since [its] launch in November. I only could get it in March. 5 months. The stock was always out and scalpers were charging 1.5 to 7 times the price,” says Dylan Lim, 19.

Ebay listing of PS5 consoles sold by resellers

Ebay listing of PS5 consoles sold by resellers. They are largely overcharging consumers. Photo taken from GeekCulture.

Another example of scalping, particularly in Singapore, is the incident involving tickets for Coldplay’s concert in 2015, when tickets were sold in 10 minutes. Ticket scalpers were then reselling tickets for over 3,000 per cent more than its original price. Fans either had to accept that they couldn’t go to the concert or pay a hefty premium for the tickets. 

Does it sound unfair? Well, we agree with you.

 “I think it’s exploitative, but I understand why it’s happening. People want to take advantage of the situation,” explains Dylan. 

 Unfortunately, the pandemic has exacerbated the problem. While the global supply chain is affected and trying to recover, the manufacturing of goods has been slower than usual. Releases of products are met with scalpers using bots to buy a high volume of items, snatching up any chance for people who want to enjoy the product.

Why?

Money is the biggest driving force behind scalpers. The return on investment is simply too high for people to resist. A bot service can cost as little as a few hundred dollars. Profits can be made from selling hundreds of products two to three times their retail price with just the click of a button.

 As reported by Forbes, corkets like Tesco (akin to Sheng Siong in Singapore) to resell milk from farmers.

 To scalpers, it is all about business. They are like vultures, looking for any opportunity to make money, even at the expense of depriving consumers from enjoying simple products like tickets, consoles, clothing, and computer parts.

What we can do to stop them

Companies can introduce more security to their website to ensure that the products go into the hands of consumers that actually enjoy their products.

As reported by TrustedReview.com, some retailers in the United States have implemented the use of Captcha challenges and online queues, which allow retailers to differentiate bots from real customers. However, more advanced bots can bypass the Captcha challenges. 

Captcha challenges that are frequently used for verification purposes

Captcha challenges that are frequently used for verification purposes. Photo taken from StackExchanges

Another method used is using pre-orders instead of selling products immediately. This will give retailers time to root out ‘customers’ using the same credit card or same address for multiple purchases. 

As consumers, we cannot do much to stop scalpers. They are fighting with bots that are specifically built to purchase the product as many and as fast as possible. 

In Singapore, scalping is not illegal. Unless legislation is introduced to make scalping illegal, the normal consumer will have to put up with the limited supply of their products and patiently wait for their turn. 

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