On Feb. 28, 2020, the first COVID-19 related deaths were reported in the U.S. The day after, across the country, much-needed medical supplies began to be stripped from local vendors with the intent to make a profit off the situation.
Retail scalping is the process of finding out that some product will soon be in short supply and then proceeding to purchase anywhere from a large quantity to the entire stock of a vendor’s supply of that product. Aside from a few minor regulations specifically with retail scalping of event tickets, this practice is legal in the U.S, which is a shame because of the serious damage it does to every business and market it affects.
The idea is that purchasing such a large amount of the supply for these limited products lets the scalper upcharge prices as much as they can. This process benefits only the scalper and the vendor — at least in the short term while scalpers are still buying their products — while seriously inconveniencing the consumer.
This needless inflation of prices can make some products unavailable to groups of people who can no longer afford them. Even worse, the practice of retail scalping can endanger entire communities when the targeted products include food, water or medical supplies.
In March 2020, at the start of the coronavirus pandemic, Matt and Noah Colvin drove around select towns in Tennessee and Kentucky buying every bottle of hand sanitizer they could find. They eventually collected almost 18,000 bottles by purchasing the entire stock of any store they came across. Of course, the items were hard to find because people all over the country really needed them. Their plan was to buy these products cheap in unreasonably high amounts and then sell them on Amazon at even more unreasonable upcharges, sometimes selling $1 bottles of hand sanitizer for as much as $70, according to The New York Times.
This created three major problems.
First, the potential thousands of people living in these local areas of Tennessee and Kentucky were directly prevented from being able to purchase hand sanitizer and now had their lives put in increased danger because of these scalpers trying to make a profit.
Second, scalpers selling these products online at such an inflated price force the people who need these products to buy them and lose more money.
Third, Amazon and eBay were quick to notice what scalpers were doing and removed the Colvins’ and countless other scalpers’ listings for masks, hand sanitizer and other medical products. In what could’ve been the correct move to stop scalpers because they couldn’t rely on the law for that, eBay prohibited any U.S. sales of masks or hand sanitizer. However, this prevented millions of people from getting the medical supplies they needed at the start of the pandemic — a crucial time for containment and stopping the spread.
The Colvins were almost able to do this with no legal consequences and were stopped only by a cease and desist letter from the Tennessee attorney general’s office. They received the letter not even for retail scalping but for price gouging, a practice that’s illegal but is subjective and hard to prove.
Retail scalping continues to be a problem even as the availability of food and medical supplies during the pandemic has vastly improved and will continue to exist long after the pandemic is over. In mid-February 2021, McDonald’s held a promotion for the 25th anniversary of Pokemon and gave special playing cards away with Happy Meals. Knowing these cards could be valuable, scalpers all over the U.S. purchased dozens or even hundreds of Happy Meals, making the cards less available to other consumers and raising their value to be sold online again at a massive upcharge in price.
Retail scalping would be easy to stop. Many businesses implement systems of purchase limits when they know scalpers will try to clear stock before real customers can get a chance. The law could do this as well, especially for products involving food, water, medical supplies and other essential goods.
It’s incredible to see how a practice so obviously greedy, wrong and only done for personal gain while directly and indirectly hurting uncountable amounts of people remains legal.
Evan Holden is a sophomore political science major. Contact Evan at firstname.lastname@example.org.