Playstation 5 scalpers are mad that people don’t like them, according to recent interviews they had with Forbes writer Janhoi McGregor, and it’s hilarious. The writer recently spoke to several British scalpers who were trying to recover their public image, probably in light of recent efforts from UK legislators to ban scalping, which gives us not only only a rare look inside the scalper mindset, but also a look into how they operate.
Scalping has been a thorn in the side of anyone looking to buy consumer tech throughout 2020 and into 2021, from the RTX 3000 series to Ryzen 5000 chips to the Playstation 5. The problem’s only gotten worse as the pandemic has closed down brick and mortar stores and forced shoppers to a purely online ecosystem, where they have to contend with bots that can buy faster than any person. We’ve spoken with cybersecurity experts before about the problems scalping poses for consumers and the threat it poses to dollar value in the larger economy, but scalpers themselves have a simple retort: “What makes us so different from Walmart?”
These sentiments come from a recent Forbes story where writer Janhoi McGregor sought to get the scalpers’ side of the story. And while McGregor’s sources gave him some pretty amusing rationalizations, they also pulled back the curtain a bit on how they actually operate.
“There seems to be A LOT of bad press on this incredibly valuable industry and I do not feel that it is justified,” a scalper named Jordan told McGregor. Jordan is the co-founder of a private scalping group (also called a “cook group”) known as The Lab. “All we are acting as is a middleman for limited quantity items.”
We do have to question the effectiveness of saying “I’m just a middleman” as a defense. Middlemen aren’t exactly known for their likability.
Jokes aside, Jordan attempted to justify scalping to McGregor by comparing scalpers to grocery stores. “Essentially every business resells their products,” he said. “Tesco, for example, buys milk from farmers for 26p or so per liter. No one ever seems to complain to the extent as they are currently doing towards ourselves.”
To be fair, Tesco also buys in bulk that’s not economical for individuals and handles shipping and stocking of more reasonably sized products for the consumer, whereas scalpers buy products that are already marked up for individual purchase and add no extra convenience or value for their customers. While there’s certainly valid criticisms to be levied against current market setups, it would feel wrong if we didn't point out that adding an unnecessary extra layer of middlemen is hardly analogous to what supermarkets do.
Or, as one gamer told McGregor about Jordan’s analogy, “He is deluded. He doesn’t get he’s another layer of profiteering in his own Tesco analogy. He’s not Robin Hood.”
But we’re not here to debunk scalper justifications, as easy and entertaining as it is. You can probably do that yourself. What’s perhaps most interesting in McGregor’s article is what scalpers had to say about the methods they use to run their “businesses.”
For instance, one of Jordan’s partners, named Regan, told McGregor about a bot he uses to mass purchase Supreme’s highly-demanded clothing. Called Volex, the bot can check out items in 2.3 seconds and bypass 3D Secure, which is a legally mandated security check for online purchases in the UK that verifies whether a shopper is the legitimate owner of their card.
Normally, 3D Secure redirects buyers to another site owned by their bank. But Velox avoids this through methods that Regan wasn’t willing to share.
McGregor talked to web security consultant Edward Spencer, who said that the scalpers are probably using pre-paid cards from outside the EU, and suggested that shops could probably thwart it by rejecting all non-3D Secure transactions.
Of course, this only applies to European purchases, which is why McGregor also spoke to a scalper going by Alex who attempted to build his own PS5 purchasing bot. Alex’s bot was a website scraper that automated checkout. Alex said that while his bot was faster than a human, it still wasn’t fast enough to compete with the bots like Volex that cook groups sell for thousands of dollars. That’s because while his bot interacted with the website, other scalping bots interact directly with severs.
“For Walmart, there was an open API for their stock,” Alex told McGregor. “Some of these bots could add a PS5 to their shopping cart, and then they could purchase it from there.”
These kinds of bots can even let scalpers buy stock before it officially becomes available, as happened with Argos the day before it started officially selling PS5s. While the store eventually shut down the loophole, the end message here is that, without oversight, scalpers will always find a way.
That kind of innovation usually requires plenty of resources, which is why many of McGregor’s sources “operate as a business, in some cases with full time staff.”
So, perhaps at least one aspect of Jordan’s Tesco analogy holds water. Going back to justifications, Jordan also told McGregor how his group donates to charity and is just trying to “help people make some extra money for themselves,” though Regan was more blunt...and honest.
“Your average person who just wants one of the consoles to use struggles to get close. A lot of these sites have very minimal or easy to bypass bot protection. They often release stocks at stupid times or without any form of schedule...The only people who will have known about those restocks will have been people with monitors inside of cook groups.”
These concerns match some of what we heard when we spoke to cybersecurity experts like Larry Bates, which is interesting to hear coming from the other side. It’s also enlightening, as it provides some concrete steps governments and stores can take to prevent scalping, which up to this point has proven legally difficult as it runs the risk of interfering with the right to sell one’s own property.
In the meantime, we assume that if the UK’s anti-scalping bill does pass, we’ll get even more choice quotes from scalpers about how, actually, they’re the real heroes here.