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The Scalping Problem

The Scalping Problem

Scalping has become a problem that seemingly touches virtually any item that is in high demand. Recently Mcdonald’s launched a Pokemon Happy Meal campaign where the Happy Meal boxes look like Pikachu and every one of them comes with a pack of Pokemon cards. It quickly became a target for scalping and consumers were going into Mcdonald’s and even buying entire boxes of the cards instead of purchasing the Happy Meal. Some of the locations started requiring the purchase of a Happy Meal but the damage was done and most ran out way before the Pikachu boxes ran out.

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The Problem

Essentially this problem breaks down into a simple supply deficiency that is both expedited and created by the scalpers. An ample amount of Pokemon cards were sent to locations all across the country, and they ran out faster than predicted because of scalpers.

The question for McDonalds is basic ROI measurement. Did this supply deficiency help increase business and the sales of Happy Meals or decrease it? I would think once families have a few disappointing trips where the bright yellow Pikachu box doesn’t have cards, they wouldn’t continue to gamble.

Also, the Pokemon Cards had an ROI that extended beyond just selling the cards, they were intended to drive food sales, and most restaurants make far more profit margins on their beverage sales. To be clear, this is not a legitimate form of business, scalping these cards is profiteering, plain and simple. “the practice of making or seeking to make an excessive or unfair profit, especially illegally or in a black market.”

The Equation

The other factor here is the rise in scalping as a malicious form of purchase. Bots are used to quickly buy up any PS5’s or XBOX Series X’s, expediting and hastening and already clear and measurable supply deficiency. Scalpers of high demand low supply items are not neutral in this equation.

Certainly, those taking advantage of desperate consumers during a high demand low supply scenarios might consider themselves to be business savvy, but the intention of items sold has to be considered. You are not a business buying from a supplier, you are a consumer elbowing other consumers.

At the end of the day, willing consumers are paying exorbitant prices for items that are low in supply, and that is ultimately why this works. The lack of supply for both XBOX Series X’s and PS5s is not even the company’s fault per se, given the supply problems from AMD just for chipset parts.

The Solution

Finding a solution to this problem is difficult because for some retailers, businesses, and suppliers, this isn’t even a problem in their eyes. The product comes in, in varying quantities, and as long as it is sold, they make their profit and hit margins, and their concern doesn’t reach beyond that.

Some retailers attempted to ensure bots and automated programs could not buy consoles automatically, and some Mcdonald’s locations started to push back on mass purchasing to ensure cards went into Happy Meals instead of the hands of a scalper.

There are currently 15 states with some measure of law about ticket scalping that can result in fines or jail time. It would be interesting if consumers started to demand some level of purchasing protection as this problem mushrooms and grows beyond sneakers, video cards, and consoles. Pokemon Cards in Happy Meals may be the beginning of a tipping point for the general public.

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