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Are There Any Legal Ramifications to Scalping?

There has been much noise recently about scalping group CrepChiefNotify and their success in securing thousands of the latest gaming consoles in time for the holidays, namely the Playstation5 and X Box Series X, to re-sell at greatly inflated prices. Certain reports have stated that some of these highly desirable consoles, which have a recommended retail price of around $499.00, have been sold for almost three times that amount, with one particular report quoting prices in the tens of thousands.

However, this practice of purchasing a highly coveted item with the intention of selling it for way beyond its RRP or face value has been around for many many years. Is it illegal? The answer is not as cut and dried as it may appear at first glance. While morally reprehensible in the eyes of most, whether scalping is legal or not is down to a whole host of factors, including the state in which you want to do it.

How so?

While there is no federal law against scalping, 15 states, including Arkansas, California, Delaware, Kentucky, Ohio, Rhode Island, and Wisconsin all ban the practice in some form, with most labelling it as a misdemeanour that carries fines and up to 1 year in jail. However, if you take a closer look at the statutes, you will notice that the laws are actually only in very select circumstances that are easily circumvented. Taking concert ticket scalping in Arizona as an example, the practice is only prohibited within 200 feet of the entrance to the venue. This means that a scalper is free to set whatever price they want, provided they are 200 feet and one inch away from the door. In today’s world of digital communication, you can see how ineffective this law can be.

Why isn’t more done to regulate or outright ban scalping?

Groups opposed to anti-scalping regulation argue that the practice is like any other business venture in our capitalist and free-market economy, and that the market should dictate the prices at which coveted products are sold. Many even question why anti-scalping regulations should exist in the first place.

Taking ticket scalping as an example once again, it seems that some professional sporting teams in the US agree with this mindset, and, possibly seeing the potential of making even more profit, it has been reported that at least eight NFL, four MLB and one NBA teams have partnered with ticket resellers to allow season ticket holders to sell individual tickets online. In the process, the reseller and the organization both get cuts of any profit. On the flip side, other teams within these leagues have taken the opposite stance and threaten to strip season ticket holders of their privileges should they attempt scalping tickets.

Impact on Buyers

Even if scalpers do have to be somewhat careful in their practices, nothing will happen to the buyer. So in essence, you are free to buy scalped tickets without the fear of being arrested and charged. Nonetheless, if you do choose to pay scalper prices, you need to be careful of fraud. One of the most common scams out there is someone selling fabricated tickets, often for seats that don’t even exist in a venue. Ticket brokers offer some protection on this front, whereas individual sellers will simply disappear with your cash.

Another type of fraud that seems to have been developed recently is products being purchased with a stolen credit card and then resold. In this case, the purchasers are simply out of luck — and their money.

Do you have an opinion on scalping? Do you feel that it is simply a consequence of people trying to make a quick buck, or is it something that needs to be stamped out? Share your views in the comments below!

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