How to Stop Scalpers From Hurting Your Customers

Scalpers buy tickets or products and then sell them to buyers for a much higher price than the company charges. Scalpers can do this with concert tickets, gaming consoles, toys, and any other product for which there is a huge demand.

Scalping can be very inconvenient for customers. If customers really want to buy a new toy their kids want for Christmas, scalpers can buy all the toys first. They then have to choose between not getting their kids what they want and paying a lot more for the toy.

Scalping is common. Both the Xbox Series X and the Playstation 5 sold out very early because of scalpers. Many people could not get these consoles when they wanted them at a fair price. Many places are passing laws against scalping, but others are abolishing these laws.

How Do Scalpers Succeed?

Scalpers can only make money if they can make demand greatly exceed supply. If supply continues to be as great as demand, scalpers will lose money. They will only be able to sell their products or tickets for less than the store price.

However, demand cannot always increase to meet supply. Even if companies know people are going to buy a lot of products, they still have to worry about producing more than they can sell.

They also cannot suddenly produce a lot more products to match demand. An event does not have room for an unlimited number of people, so a concert cannot raise the supply of tickets. Many people want an item badly enough that they will pay a scalper extra for it.

How Scalpers Use the Internet

Modern technology has changed scalping. A modern scalper might still line up to buy products in stores, but they are more likely to do everything online. One can order many items online very quickly, often almost as soon as the product is released.

Scalpers also use the internet to sell their products. As well as eBay, they can sell tickets on sites like Stubhub and Ticketmaster. These sites make a fortune facilitating scalping, and they oppose legislation making scalping illegal.

Is Scalping Illegal?

Yes, scalping is illegal in many places. As scalping has become more common recently, legislators have passed laws against the practice.

Buying new gaming consoles and then selling them on eBay for close to a thousand dollars is not legal everywhere. Legislators also passed the ticket act, which makes it easy for US states to prohibit scalping tickets. Lawmakers argue that scalping is unfair and deceptive. The counter-argument is that people should have the right to buy and sell property with few restrictions.

However, scalping is not illegal everywhere. Laws are often lenient and are becoming more lenient in some places. In the United States, states can set their own restrictions on scalping, and many states have few or no restrictions. Minnesota, Connecticut, and Missouri have abandoned their laws against scalping, and bills to make scalping illegal have failed to pass in some states.

If you are running a business and trying to stop scalpers that can make your repeat customers dislike you, you can’t always rely on the law. The laws might be lenient, hard to enforce, or nonexistent in your area. However, there are practical methods you can use to stop scalping, especially online scalping involving automated purchases.

Scalpers Use Bots to Buy Tickets Immediately

The first kind of scalper you should be worried about is an online scalper that uses a bot to immediately buy all of the tickets as soon as they become available.

Scalpers can also ruin discounts for everyone. They can have their bots wait for a discount to become available, immediately buy tickets until the discount goes away, and sell them for normal or higher than normal prices. If there is a limit on how many tickets a single person can buy, a computer program can “pretend” to be many different people with different names and addresses.

Scalper bots can buy tickets instantly or faster than any human could buy them. It can take much less than a second for a scalper bot to fill out credit card information, a name, an address, and whatever other information is required. They can do this with products as well as tickets – many PlayStation 5s sold online for four times the normal price shortly after the console launched.

Why Does Scalping Hurt Businesses?

Scalping is not nearly as harmful or as illegal as stealing. However, scalpers still hurt businesses and not only customers. Scalpers can make you lose your loyal customers, so you should definitely not tolerate them.

Let’s suppose that two companies are selling gaming consoles. One of them tolerates scalpers because they quickly buy out all of their products; the other manages to limit scalping.

Customers will strongly prefer buying gaming consoles at normal prices from stores to buying gaming consoles online for much more. Therefore, a company that tolerates scalping will ruin its relationship with its customers.

Some scalping is unavoidable and not very harmful, but don’t let it get out of hand. In most places, you can use the law against scalpers, and if you can’t, there are still ways to limit how much damage they can do.

How Can a Business Stop Scalpers?

Sometimes, there is no way to prevent people from doing some scalping, especially not in places where it is legal. However, you can easily limit it.

You can use simple CAPTCHA verifications to block many scalper bots. It is not easy to make a bot that can pass a captcha, so this can be enough to defeat a lot of scalpers on its own.

You can also use software that can detect and block bots. A lot of the time, bot traffic comes from IP addresses that are known to be used by botters.

The right antibot security software will block traffic from these addresses. Security software can also identify bots by their behavior. It can also notice a sudden, unnatural increase in traffic that must be an attack by a network of scalper bots.

You can also limit how many products a single person can purchase, either online or offline. There are always ways for scalpers to get around this, but you can discourage scalping enough that only a small fraction of what you sell goes to scalpers. Customers will like your company much better if they can buy your products for fair prices.