How 'Grinch Bots' Are Ruining Online Christmas Shopping (nypost.com)

Yes, U.S. Senator Chuck Schumer actually called them "Grinch bots." From the New York Post: The senator said as soon as a retailer puts a hard-to-get toy -- like Barbie's Dreamhouse or Nintendo game systems -- for sale on a website, a bot can snatch it up even before a kid's parents finish entering their credit card information... "Bots come in and buy up all the toys and then charge ludicrous prices amidst the holiday shopping bustle," the New York Democrat said on Sunday... For example, Schumer said, the popular Fingerlings -- a set of interactive baby monkey figurines that usually sell for around $15 -- are being snagged by the scalping software and resold on secondary websites for as much as $1,000 a pop...

In December 2016, Congress passed the Better Online Ticket Sales (BOTS) Act, which Schumer sponsored, to crack down on their use to buy concert tickets, but the measure doesn't apply to other consumer products. He wants that law expanded but knows that won't happen in time for this holiday season. In the meantime, Schumer wants the National Retail Federation and the Retail Industry Leaders Association to block the bots and lead the effort to stop them from buying toys at fair retail prices and then reselling them at outrageous markups.

Comments

Yeah.... but....

[gfxguy]

The shoppers are idiots, and they largely get what they deserve - anyone paying more than retail is exacerbating the problem, but god forbid your child doesn't get the latest gadget for Christmas. Anyone who has paid more than retail for a gaming system, or anything else that will eventually be available for the retail cost, is NOT A VICTIM, they are the PROBLEM.

Re:Yeah.... but....

[ShanghaiBill]

anyone paying more than retail is exacerbating the problem.

What problem? I don't see that there is one. The toys are not going to fewer people, just different people.

More importantly, more money is being extracted from rich people who clearly have too much, and distributed throughout society to bot writers, etc. This reduces inequality and is a Good Thing.

Chuck Schumer seems to think that allocating limited goods randomly, or perhaps by rationing, is more "fair" than allocating them to whoever is willing to pay the most. That is backwards nonsense.

Re:Yeah.... but....

[Known Nutter]

Spoken like a parent. There's no such thing as Santa, Tim is not tiny and he is not special. Tough shit, Tim. You don't always get everything you want.

Re:Yeah.... but....

[msauve]

"Spoken like a non-parent. Look its fine to say all that but the problem comes when Tiny Tim..."

As a former parent of small children, it's fine to teach them about advertising and fads. If they still want X in a year, fine, otherwise there's a life lesson about marketing, peer pressure, and temporality to be taught, which is far more valuable than a Cabbage Patch doll or Pet Rock.

Re:Yeah.... but....

[ShanghaiBill]

He's not talking about toys

Yes he is. Chuck Schumer is explicitly advocating that the power and authority of the federal government be used to control who can and can't sell ... toys.

EDUCATION. HEALTH CARE. CLEAN WATER.

Poppycock. None of these things are sold at below market prices, bought by bots, and then resold at proper market clearing prices. That is not happening at all, and that is NOT what Chuck is talking about. He is talking about toys.

Democrats like Chuck Schumer are the reason that Trump will be reelected.

Re:Yeah.... but....

[antifoidulus]

They actually are creating problems not only for consumers but for manufacturers and retail outlets as well. I think a lot of people are missing the asymmetric risk aspect of what these things are doing. Most retail outlets have relatively generous return policies meaning that bots buying up tons of these items assume almost no risk, if they can't scalp them they simply return them for a full refund.

Meanwhile retail outlets and especially manufacturers are stuck in a shitty situation. They can order/produce more to meet "demand"(even though the bots may still be able to sap up all the supply) but if they overshoot they simply cannot return the "unused" product for a full refund, they have to sit on the unsold inventory until it sells(if it does).

Re:Yeah.... but....

[ShanghaiBill]

There are plenty of solutions to these problems that do not require new federal laws.

1. They could change return policies on an item-by-item basis. Plenty of websites already do this.
2. They could require that scarce items be ordered as part of a larger order with a minimum purchase amount.
3. They could only display scarce items to online customers that have a qualified ordering history.
4. They could limit how many scarce items can be ordered by shipping address.
5. They could charge higher prices, and then adjust those prices downward on a daily or hourly basis until the inventory is cleared.

None of these solutions require help from Chuck Schumer.

Re:Yeah.... but....

[interkin3tic]

Democrats like Chuck Schumer are the reason that Trump will be reelected.

I suspect you overestimate voters. They don't like all big important but abstract talk like deficit, climate change, or net neutrality. Most have only the dimmest of understanding what that is and prefer politicians tackle "real problems" like the pothole out front.

"Those damn hackers are ruining christmas!" is totally something that will appeal to useful idiots.

FFS, the republican side isn't running on real solutions to real problems either. "War on Christmas" resonates deeply with a lot of Trump voters, and there is (much to my dismay) no war on Christmas.

Re:Yeah.... but....

[Pascoea]

6. Do nothing. There is no problem to be solved here. They just moved their inventory in record time.

Although, a smart retailer would do 1 and 5. If they were able to recognize this was happening soon enough, double the price for the first 30 minutes that the inventory is in stock with a giant "NON RETURNABLE ITEM" plastered all over the place. #7, profit.

My kids are only allowed to watch CSPAN.

[Anonymous Coward]

No toy commercials and a quicker hatred of government so we can bitch about it together.

Arbitrage

[Anonymous Coward]

This kind of arbitrage is only possible if the original price was far too low compared to the supply/demand. If there is demand at $1000/ea, and you are selling at $15/ea, then something will fill that void. If not bots, then just people buying and immediately reselling.

I have no idea what a "Barbie Dreamhouse" is or why it could possibly be worth $1000 to somebody, but if that's where the market values it, you can either (a) produce more to drive the supply/demand intersection point down closer to what you feel it should be, or (b) sell closer to the current intersection point, which takes the wind out of arbitrage, which also becomes very risky.

These things are matters of basic economics, and have simple solutions.

Re:Arbitrage

[olsmeister]

You're going to wind up with kids who are really, really good at The Price Is Right.

Re: Arbitrage

[ShanghaiBill]

You can't guess what toys will be the ones that are loved.

My daughter's Barbie Dream House was, of course, her favorite. But otherwise I have had good luck giving kids dorky nerd stuff, which they almost always like. For one Christmas I gave her a bottle of heavy water (D2O). She won bets from her friends with ice cubes that sink, and with H2O ice cubes that will adhere to a finger wetted with D2O but not H2O (D2O freezes at about 39F or 4C). She loved it. The next year, I gave her 100g of gallium, a metal that melts at about 85F or 30C.

Re:Arbitrage

[sjames]

The problem is, it's an artificial scarcity. It's not as if our industrial capacity is maxed out, it's just that demand if focused on a small part of the year and re-tooling takes time.

Compounding that, it only takes a few kooks willing to pay those crazy prices to make the venture pay for the scalpers. A lot of product gets left on the shelf even in the midst of huge demand. That is, an inefficient market.

Re:Arbitrage

[Anonymous Coward]

This is not basic economics, but rather manipulation of the supply by purchasing it all. The bots are creating the shortage, not just taking advantage of it. By purchasing so many of those toys that they are hard to find, you make the supply short. Say they are selling at $15, you buy them all and offer them for sale at $1000. That would be around $900 profit, assuming fairly small expenses in addition to the purchase cost. You could sell very few and throw out most of they toys and come out way ahead. The manufacturer cannot make more fast enough to sell when people want to buy them (now). There is likely no simple solution because of the time factor. This stuff will only be valuable for a few weeks. Sure, the price will come down when more are made, but the bot still disturbed the market and profited from it.

This kind of arbitrage is only possible if the original price was far too low compared to the supply/demand. If there is demand at $1000/ea, and you are selling at $15/ea, then something will fill that void. If not bots, then just people buying and immediately reselling.

I have no idea what a "Barbie Dreamhouse" is or why it could possibly be worth $1000 to somebody, but if that's where the market values it, you can either (a) produce more to drive the supply/demand intersection point down closer to what you feel it should be, or (b) sell closer to the current intersection point, which takes the wind out of arbitrage, which also becomes very risky.

These things are matters of basic economics, and have simple solutions.

Re: Arbitrage

[ShanghaiBill]

Jeez. What do you get the kids if they are bad, a vial of mercury?

No. As a neurotoxin, it is likely that mercury would make their behavior even worse. Gallim is physically similar to mercury, but non-toxic. It is a lot of fun to play with. You can pour it into a mold, pop it into the refrigerator, and make metal parts. Then just hold it in your hand and it will "disappear" back into a liquid.

Of course, I get my kids the chemicals and other dork stuff in addition to the Barbie accessories, except when I can double dip by buying something that is both, such as Scientist Barbie.

Color me cynical but

[Snotnose]

I have to wonder who wrote Schumer's BOTS act. cuz you know damned well neither he nor his staff don't understand the issue, let alone legislate it. It was written by lobbyists who paid the most the Chucky's attention.

Supply and demand ....

[King_TJ]

Screw that.... ANOTHER attempt by government to manipulate the free market economy, with the flawed idea it will improve anything.

You can blame these scripts/bots all you like for product shortages, but I guarantee they'll continue to happen even if all of them are somehow magically prevented from running.

The companies actually building the products are known to limit how many are produced after doing the marketing, knowing full well that shortages drum up more interest and free publicity than making sure there's plenty of supply. (When supply is plentiful, a lot of people decide to buy some other product instead that they feel is going to be harder to obtain as a gift. They figure, "Eh... I can easily get one of THOSE things any time, and judging by how many are on shelves? It'll probably go on sale by then too.")

Better idea...

[CrimsonAvenger]

Let's try something novel - if you can't find it in stores, just don't buy it.

Trust me, your little darlings aren't going to be scarred for life.

And even better, the so-called Grinch-bots will then be left holding the toys when noone is willing to pay $1K price tags for a $15 toy....

Re:Better idea...

[Nutria]

Trust me, your little darlings aren't going to be scarred for life.

A metric fuck-load of people need to learn this.

Re:Works as advertized

[sjames]

Actually, Smith warned that this sort of rent seeking needs to be regulated lest the economy go in the dumper.

Re:Some do-gooding politician failed basic economi

[Anonymous Coward]

Considering that we're about to add $1.5 tn in deficit spending to make the ultra-wealthy just that much more wealthy on the poor's dime, I think that the people paying those markups probably don't feel bad about screwing the poorer out of buying them for what the manufacturer and retailers are asking.

We live in a winner take all society where the rich are so completely oblivious that it's going to take literal lynch mobs of villagers carrying torches and pitchforks to get them to see that being greedy bastards has consequences.

A True Christmas Miracle

[santiago]

And thus we learned that the true meaning of Christmas is not in buying whatever mass-produced junk is trendy at the moment, but in joining together in anger on the internet.

Why do kids need...

[b0s0z0ku]

Why do kids need the latest plastic toy fad made by $1/hr workers in some sweatshop? Buy them toys that make them THINK creatively and allow them to build. Paints and a canvas, electronics set, chemistry set, Legos, Erector sets, Capsela (yep, re-released), electric trains. Those kinds of things seldom go through fads, so bots are unlikely to be a problem. And you can buy them in brick 'n mortar shops.

Re:Works as advertized

[sjames]

He was thinking of absolutely anything that might sell in the marketplace. If scalpers were creating a toothpick shortage, that would also be proper subject for regulation.

What to tell your kids

[boudie2]

Tell them that Santa was fired by his employers (Coca-Cola) because there were accusations of him sexually harassing the female elves Apparently he would get them to sit on his lap while telling them what he wanted for Christmas.

Perhaps We Should Give This a Little More Thought

[Hercules Peanut]

I sympathize with many of you who are concerned about free market manipulation and the relative unimportant nature of toy sales. Your not wrong. When it comes to toys for children, we can solve this "problem" with a little wisdom and self control.

However, let's look at this like technology people (slashdot, right?). Toys today could be something else tomorrow?

Those mandatory for school TI calculators?
Chemicals necessary to produce certain kinds of 3D print material used in every household?
Important drugs that are hard to produce?
Preparation H?!? (Hey,when you need it and it is not there, then you will understand)

I'm not sure if this is possible today, but when I think about how the market has changed over the past 10 or 20 years and imagine how it might change over the next 10 or 20, I'm not sure this "abuse" is going to be limited to rich people and their spoiled children's toy fetishes. When I combine a little imagination with the history of technology and its evolution, this practice makes me a little nervous.

I don't know if Schumer has thought about this or even cares, but shouldn't we give it a little more thought before discounting this out of hand?

How could bots disrupt the free market and legitimately hurt people by limiting access to stuff?

Sociabilisation

[DrYak]

If they still want X in a year, fine, otherwise there's a life lesson about marketing, peer pressure, and temporality to be taught, which is far more valuable than a Cabbage Patch doll or Pet Rock.

On the other hand, this lesson comes at the price of being the only single kid who received it, and being ostracized by the rest of the school's kid for being weird by not following the same trends as every body else "normal", by not having the same outfit, the same popular toys, etc.

Basically, by making the kid more aware and more immune of the above marketing/peer pressure/etc. problems, you're also pushing them into becoming social outcasts and being percieved as "that weird kid".

There's a sweet spot of weirdness were the kid actually doesn't even give a damn about not fitting in the group, is creative enough to find their own interests in life (without needing group approval) while still being a tiny bit social enough to have a very interesting clique of other non-conforming friends.
(And, personal experience, it also helps a lot when the kid happens to be quite a bit taller then any potential bully...)

But that might not be the case of everyone. Some kids might be actively trying to resist your lessons about not needing to fit in because of sheer fear of rejection by the others.
The part of the lesson about "peer pressure" actually goes much deeper than just "you'll see, in a couple of months you won't even want the toy anymore".
It is a very valuable lesson, but it take quite some work to get there depending on the kid.