Retailers claim they are trying to stop bots from snapping up in-demand items, but what...

Shawn Knight

Posts: 14,149   +155
Staff member
A hot potato: Some of the largest retailers in the country including Walmart and Target are deploying technology to try and thwart automated bots that scan websites for in-demand products and purchase them faster than humanly possible. But why should they even care?

The issue, which existed before the pandemic to a lesser degree, has only been amplified as of late due to supply chain shortages. In November, online shoppers were met with out-of-stock messages 258 percent more often than compared to just two years ago according to Adobe.

Seizing an opportunity, many have turned to these automated bots to buy up inventory and resell it for a significant profit on third-party platforms like eBay, and even locally through Craigslist and Facebook Marketplace. Others are turning to bots in hopes of being able to fulfill their holiday wish lists.

With highly sought after items like video cards and game consoles selling out in minutes, many others are either left empty-handed or have to dig deeper into their wallets to pay inflated prices.

Chuck Bell, programs director at Consumer Reports, likened bots to viruses, spam or robocalls. Others may not view the issue as quite that extreme, but coming up with a solution to level the playing field for all buyers has proven difficult thus far.

Walmart last year said it blocked 20 million bots in a 30-minute span that were trying to scoop up PlayStation 5 consoles on its site. Target told the Financial Times that it is continually improving its tools and tech to track and block bots.

Others, like Columbia Business School Professor Mark Cohen, don’t believe there is much retailers can do to about the matter. “It’s an unfortunate situation, but it’s one which really doesn’t have a remedy until normal services and supply becomes back in balance,” Cohen added.

Cohen is probably right, and really, what incentive do retailers have to actually try and curb the use of bots? At the end of the day, they’re selling inventory at record speeds. What happens to those goods after they’ve made a sale is beyond their scope of concern. They’ve made their money. Goal accomplished.

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brucek

Posts: 1,131   +1,672
The incentive is there. High demand items should be great ways to customers into your store, where ideally you'd sell them not just this one item, but also accessory items that go with it, plus impulse items you're promoting, plus hopefully maybe even starting ongoing relationships with people who found your store for the first time because of this item.

I don't think retailers are pleased by the scalpers, it's just they don't have an easy / reliable / affordable option to make them go away. And on the IT side, they certainly can't be pleased by a huge magnification of bot traffic which must border on DDoS level volume at times.

The opportunity for scalpers arises due to old time values where polite society frowns on the companies or retailers raising prices directly in cases like these. The thing is I think it's worse for the money to go to scalpers, who add nothing, and can not use the windfall profits to increase capacity.
 

Avet85

Posts: 9   +9
The incentive is there. High demand items should be great ways to customers into your store, where ideally you'd sell them not just this one item, but also accessory items that go with it, plus impulse items you're promoting, plus hopefully maybe even starting ongoing relationships with people who found your store for the first time because of this item.

I don't think retailers are pleased by the scalpers, it's just they don't have an easy / reliable / affordable option to make them go away. And on the IT side, they certainly can't be pleased by a huge magnification of bot traffic which must border on DDoS level volume at times.

The opportunity for scalpers arises due to old time values where polite society frowns on the companies or retailers raising prices directly in cases like these. The thing is I think it's worse for the money to go to scalpers, who add nothing, and can not use the windfall profits to increase capacity.
Exactly that. Micro Center for example has much more sales with their "in-store only" policy than they would have with online only. I think that stores have a good incentive to block bots. If you can purchase a hot product in an online store it is a high chance that you will buy something else there. If you know that some online store is ransacked by bots you wouldn't visit it that often.
 

QuantumPhysics

Posts: 6,308   +7,247
Exactly that. Micro Center for example has much more sales with their "in-store only" policy than they would have with online only. I think that stores have a good incentive to block bots. If you can purchase a hot product in an online store it is a high chance that you will buy something else there. If you know that some online store is ransacked by bots you wouldn't visit it that often.

Microcenter can block bots.

Microcenter can do nothing about walk-in scalpers.
 

elementalSG

Posts: 270   +478
The incentive is repeat customers and your brand reputation. Real human customers, unlike bots, may be back to your store for the accessories, games, XBox Live/PlayStation Online memberships, etc. If you are always out of stock, it sends a message that your store isn’t worth coming to and isn’t a good place to continue buying from, hurting brand reputation as well.

Microcenter and some others are now watching and trying their best to keep bots at bay and their customers happy. I applaude them for this
 

Neatfeatguy

Posts: 841   +1,452
Newegg found a way to not only limit highly sought after items to people through their shuffle, but they also move other inventory by forcing bundles with most of these highly sought after items.

Really want a GPU? 90% of them are bundled with something else, such as a PSU or monitor that you most likely don't want nor even need. But Newegg knows folks are desperate and they'll pay for extra stuff just for a GPU.

I do enjoy what Microcenter does and because of it I was able to get a GPU for my kids' new gaming system. I'd like to see more brick and mortar stores do the same, but in the end.....a sale is a sale to many companies, so why change?
 
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FaTaL

Posts: 83   +124
Companies should care because the more consumers pay the inflated price for an item, the less disposable money they have to buy other stuff from said company
 

Goamist

Posts: 52   +90
I don't see the financial damage, at least not on the short run - the items the bots are snatching are still overpriced, just not as much as seen on ebay. So the profit is there, even if the purchase was not for a bundle of items.
As for the damage to the brand reputation, most people have short memory and they are always susceptible to good marketing, so the damage can be fixed later (helped by the ever-shifting customer base).
 

captaincranky

Posts: 18,745   +7,684
I don't think retailers are pleased by the scalpers, it's just they don't have an easy / reliable / affordable option to make them go away. And on the IT side, they certainly can't be pleased by a huge magnification of bot traffic which must border on DDoS level volume at times.
Techspot's "users online" stat counter, formerly included the number of bots active on the site, along with the "member", "staff", and, "visitor" counts..

In every case, the number of bots exceeded the visitor, member, and staff counts combined.. Obviously, these were simply being used for data indexing, and search enhancement purposes. But, it does give full credence to the point you've made.
The opportunity for scalpers arises due to old time values where polite society frowns on the companies or retailers raising prices directly in cases like these. The thing is I think it's worse for the money to go to scalpers, who add nothing, and can not use the windfall profits to increase capacity.
My point, (which I've made several times), is that simple human nature has to kick in on the part of someone who is tasked with the responsibility of maintaining all aspects of a multi-billion dollar fabrication facility. As you likely know, dealer costs and MSRP, are based on a certain expected percentage of RoI. Thus, the guy on the top floor has to be thinking to himself, "why shouldn't I increase that percentage, when some a**hole with a laptop, can double his investment in less than the blink of an eye". So, that dealer cost has to go up as a response.

Now, customer "need", and, "greed" plays heavily into the equation thus; "I don't care how much I have to pay for a goddamned PS-5, I just want this kid of mine to cease his, (or her)" nagging about wanting one, come Christmas morning".

If people banded together and committed to simply not buying anything over MSRP, the scalpers would all be declaring bankruptcy after a single new product release.

Yeah I know, that's never going to happen. I lost my faith in human intelligence, compassion, and common sense, many decades ago.
 

bviktor

Posts: 855   +1,271
Request ID / proof of address, 1 item per person / address per year. Figure out the legal stuff. It's not rocket science. They just don't give a flying f.
 

Sausagemeat

Posts: 1,597   +1,422
The only way to stop scalpers is to increase supply. No matter what retailers do, if people are prepared to pay above MSRP for an item they will exist.

But hey at least it’s luxury items being scalped. Nobody needs a PS5 to survive. If however scalpers we’re buying all the food then selling it back to us at a markup I’d be grabbing a pitchfork.
 

captaincranky

Posts: 18,745   +7,684
Limit one GPU purchase per person per 6 month period. Require ID to purchase.

Boom, just fixed it. And a LOT easier to implement in walk in stores.
Micro Center has already implemented something like this in their retail stores. It's one per customer, no we won't save one for your friend, he has to come in, based on a lottery system..

The only problem is, everything is still priced double MSRP.
 

Uncle Al

Posts: 8,778   +7,702
There really isn't a way to stop this without infringing on a companies right to do business. The only real way would be to severely punish those doing the buying with hefty fines and jail time and getting that done will be nothing short of a miracle.....
 

QuantumPhysics

Posts: 6,308   +7,247
The only way to stop scalpers is to increase supply. No matter what retailers do, if people are prepared to pay above MSRP for an item they will exist.

But hey at least it’s luxury items being scalped. Nobody needs a PS5 to survive. If however scalpers we’re buying all the food then selling it back to us at a markup I’d be grabbing a pitchfork.



Supply isn't the problem.

Demand is the problem. IE: scalpers buying up multiple cards (high demand) intent on reselling them.

Limiting individuals to one card per month helps.

Forcing people to preorder and pick up in store helps.

As is, the access to cheap credit, the ease of purchasing multiple units and the inability to stop multiple purchases by individuals is the problem.

Dumping more cards on the market doesn't help because of the crypto miners...
All they'll do is increase purchases.

The real issue is the logistics behind shopping for GPU.
 

Sausagemeat

Posts: 1,597   +1,422
Supply isn't the problem.

Demand is the problem. IE: scalpers buying up multiple cards (high demand) intent on reselling them.

Limiting individuals to one card per month helps.

Forcing people to preorder and pick up in store helps.

As is, the access to cheap credit, the ease of purchasing multiple units and the inability to stop multiple purchases by individuals is the problem.

Dumping more cards on the market doesn't help because of the crypto miners...
All they'll do is increase purchases.

The real issue is the logistics behind shopping for GPU.
We are talking about the same problem. Demand is higher than supply. The way to fix it is to either kill demand or increase supply. Dumping enough cards into the market would absolutely fix the problem. Saturating the supply always removes a problem with excess demand. This is economics 101.

You can also kill the demand for these cards. But how you would do that without destroying peoples livelihoods? You may not like miners but they have every right to be able to buy GPUs as gamers do. In fact they probably have more of a claim than gamers as miners make their Income from mining.

Attaching a few controls at retail for GPUs will make ZERO difference. Retailers are victims of the demand, their prices may be high but they are paying scalper prices for their stock already. This is a supply chain issue and OEMs dont care about you, they often lose money on these sort of products if they dont sell immediately so they wont be in any rush to discriminate who their cards are going to as long as they get them out of the door. And lets face it, consumers wont remember even if they see it as a betrayal.

Besides, we all know you are going to throw thousands of dollars at these retailers for a 3090Ti. And you did the same with a 3090, you are a hypocrite if you think we should kill demand for these products. Its people like you who are apparently willing to pay the most!
 

Avro Arrow

Posts: 2,373   +2,888
TechSpot Elite
To them, a sale is a sale, but they're not going to say that publicly. They'll give lip service and pocket the profits, which is EXACTLY what they're doing.
 

J Oelschl

Posts: 17   +15
The problem is not the retailers but the consumers. If consumers would simply refuse to buy from the scalpers on eBay they could put an end to it quickly. At some point the scalpers run out of money or credit. Let them choke on their inventory. Unfortunately too many people are impatient and want it right now and therefore purchase from the scalpers. Take the profit incentive away from them and they will stop. The solution rests with the consumers!