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....

[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....

[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.

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

[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.

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: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: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.

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.