When Resale Becomes Unethical: how Companies Continue to Enable Scalping

 by Emma Pope

(Image by Richard Eriksson, Wiki Commons) 

Over the past few days, I’ve witnessed dozens of people scrambling to enter virtual queues, often with over one-hundred-thousand others, in a bid to secure elusive tickets to Harry Styles concerts. This situation isn’t particularly uncommon. Social media feeds are frequently flooded with both triumph and bitter disappointment as people battle to secure limited numbers of things they desperately want. Failure can be entirely crushing, as potentially once in a lifetime experiences are ripped away. There is a more nefarious side to this entire situation, as people see this desperation as an opportunity to make money, a lot of it. Purchasing tickets (and other items), sometimes using bots to bypass queues, with the intention of reselling them at a marked-up price is a practice known as scalping or touting. Although using bots to purchase tickets is illegal in both the UK and USA, there are plenty of loopholes that allow scalpers to continue their practices, with many companies remaining entirely complicit in these activities that sees desperate fans pay up thousands of pounds. 

Scalping is most associated with event tickets, such as those for concerts, festivals, and theatre productions. The use of bots to purchase any of these has been illegal since 2018, but many bots are finding ways to bypass sites’ protection systems and scalpers continue to purchase tickets manually on a smaller scale. Ticket resale sites such as Viagogo were forced to make it clear that they are not primary sellers as well as more clearly disclose additional fees and the original face value of tickets; but continue to place no cap on how much a ticket can be listed for. Tickets from the aforementioned Harry Styles shows appeared on Viagogo just hours after their release, with some of the most desirable tickets listed at over £1,000, nearly ten times their original value; a value that Viagogo is fully aware of and lists next to the resale price. Naturally, these sorts of sites have their merits, as people are sometimes simply not able to attend an event and want to recoup money and give another fan an opportunity to attend something that might otherwise be sold out. Having regulated channels also helps curb scamming that you might encounter on platforms such as social media. However, some tickets listed on resale websites still end up being invalid or otherwise fraudulent. It is clear that most of the time these fan-to-fan transactions are not what the sites are being used for. Tickets to talks, sports fixtures and musicals are also often targeted. In 2017 Ticketmaster (a leading primary seller of event tickets) sued Prestige Entertainment for their use of bots to buy up to 40% of Broadway show Hamilton’s tickets and most tickets to a boxing match. For resale sites, mass purchase means enormous profit. Viagogo charges both a buyer booking fee and a seller commission fee. Although Viagogo fails to make it clear just how these fees are calculated or what they total, it is quite probable that the fee increases with the value of the ticket, meaning Viagogo potentially benefits from the extortionate markup of resellers. 

Despite many other products are also victims of the practice; for scalpers, global lockdowns created the perfect storm of increased online shopping, increased spending on hobby related items and disruption to manufacture and supply chains. People wanted things to help relieve their lockdown miseries and they were willing to pay up to get them. A particular target became gaming hardware, with the Nintendo Switch and later PlayStation 5 and Xbox X series becoming near impossible to locate at retail price. Even with software created to alert consumers of restocks, it was possible for an item to go out of stock before the checkout process was even completed, often in literal seconds. Buyers of computer parts also faced similar issues, with hardware appearing on sites such as Ebay for double the retail price, as scalpers bragged about their stock and profit on social media. Ebay has an anti-price gouging policy, but it mostly applies to items that are considered essential or inflating prices in response to disaster. Over a year after the PlayStation 5 was released the top Ebay listing for the PlayStation 5 remains £200 more than Argos’ price. It is noteworthy, that Ebay collects 12.8% of any sale on its site, meaning the more money a product sells for, the more money Ebay earns. Physical retailers such as CEX also sold the consoles for higher than the recommended retail price during the height of the shortage, and many retailers had very little protection against bot buyers. Whilst the government is now investigating the banning of bots in relation to purchasing gaming hardware, there are no restrictions on manual purchases or protection for other high value items such as hot tubs and brand sneakers, which frequently receive similar treatment. 

There are ways to combat scalpers; Ed Sheeran once voided 10,000 tickets that had been listed on Viagogo and offered fans an opportunity to purchase face value tickets. Both resale sites and scalpers have also faced legal repercussions, with one couple who earned millions being jailed, one receiving a sentence of four years and the other two and a half years. In addition, there have been recent calls from the Competition and Markets Authority for tougher regulations on the market. Supply is also driven by demand, the argument that if people did not buy from scalpers, they would not exist being a major one, however, people are always going to pay extra for something they are desperate for if they believe they have no other choice (especially in the case of events that cannot simply be restocked later). As it stands, scalpers and their bots make thousands by preying on the desperation of consumers and fans in incredibly uncertain times. It is clear the government needs to step up.