The ethics of gouging

[InfiniteNothing]

I've been thinking about reselling the next generation system at around Christmas time, but I have an ethical reservation. Would I really be improving the world any if I were to do this. I think I would only be improving my pocket books. If I didn't do it and I didn't exist maybe someone else would just take my place and gouge someone else. Or maybe someone who wanted the system could buy it at MSRP. It is certainly not with the spirit of Christmas. What do you think. It would certainly be easier to not gouge people if I didn't know that other "entrepreneurs" were making crazy money on eBay.

[Cubsfan]

Do you see scalping tickets as unethical? Seems like pretty much the same thing.

[MikeD]

If someone is willing to pay the price, what is the problem? You're not forcing someone to pay you big $$$ for something...they're willingly offering to pay you. :shrug:

I see no problem with it.

[InfiniteNothing]

If someone is willing to pay the price, what is the problem? You're not forcing someone to pay you big $$$ for something...they're willingly offering to pay you. :shrug:

I see no problem with it.
There are many unethical ways of getting money. Just because someone is willing to pay you for something doesn't make it ethical. IE money laundering, making speed, etc.

Usually, before I make money, I like to think I'm giving back and helping people in someway.This is, to some degree, a purely selfish act.


If someone is willing to pay the price, what is the problem? You're not forcing someone to pay you big $$$ for something...they're willingly offering to pay you. :shrug:

I see no problem with it.
Yeah, sometimes I think scalpers are okay sometimes not. It depends on how fast the concert sells out. If it sells out in a week then I'm okay with it. If it sells out in a day or in an hour... I'm not.

[smeakim]

We live in a society that works off of supply and demand. Buying something and then reselling it is not unethical. If you are willing to sit in the lines and jump through all the hoops to get a PS3, then if you want to sell it, it’s your right. You can set whatever price you want. They do not have to buy it. They can wait until there is enough supply to buy one. We have created a society of people who want everything now. If people would just realize that if they wait for a few months, there will be plenty of PS3s on the market. It’s not like this will be a limited edition run. I know for a fact that I will never ever get all caught up in the hype of a new toy or gadget as I did with the original XBOX. I make sure that I really want something now and if in a month or two I still want it, I may or may not buy it. People want to pay obscene amounts for things, that is their right. If people are willing to pay, there will be people willing to sell. I would only considering something gouging if the item was necessary to live, otherwise there is always an alternative.

[InfiniteNothing]

Okay let me take the other side. Hypothetically, if it was essential for life (lets say I'm auctioning off insulin or bird flu vaccine or something) what does it matter that it's essential for life? How does that change the argument? Someone's willing to pay right?

What if I'm selling drugs to kids or laundering money? Someone's willing to pay.

Lets say I have an insider. I'd have to stand in no lines or deal with any hassle. What am I doing to EARN that money

[mcs328]

It's not like it's a necessity like food or water and I guess gas. I'd do it but watch out if I get robbed. Remember all the people getting robbed for their 360's? Dangerous.

[Winston]

why have a poll ? sounds as if it would bother you. the poll isnt gonna change your mind or your looking at a way to justify

[Jeffbx]

It's not gouging - gouging is artificially setting the price at an unreasonable level when there are few or no alternatives. Like the gas stations that posted their prices up to $5/gallon when we invaded Iraq.

Selling something for a high price when there is high demand is just meeting the market's needs. Supply is low, demand is high, the market will bear a higher price because people are willing to pay a premium to get a scarce commodity. Econ 101.

If it makes you feel better, do an ebay auction with a $1 starting bid. People will automatically bid the price up to what the market is able to bear. It could be a lot higher than the retail cost of the item (like the xbox 360 release), or if the supply is good on day 1, it will not get as good of a price.

If you DO do something like this -

- get your hands on the unit as soon as possible and post a very short auction (1 or 3 day)
- start at $1 and no reserve
- pay the extra $20 to make it a featured item
- offer same day overnight shipping so they can get the machine ASAP

Good luck!

[InfiniteNothing]

why have a poll ? sounds as if it would bother you. the poll isnt gonna change your mind or your looking at a way to justify
I'm not interested in having my mind changed, I'm curious as to how/what other people think.

Honestly, I'm undecided. As usual, I figure if I agree with everyone then it would be a rather boring thread.

[MikeD]

Okay let me take the other side. Hypothetically, if it was essential for life (lets say I'm auctioning off insulin or bird flu vaccine or something) what does it matter that it's essential for life? How does that change the argument? Someone's willing to pay right?

What if I'm selling drugs to kids or laundering money? Someone's willing to pay.

Lets say I have an insider. I'd have to stand in no lines or deal with any hassle. What am I doing to EARN that money

You state this, and then you state:


Yeah, sometimes I think scalpers are okay sometimes not. It depends on how fast the concert sells out. If it sells out in a week then I'm okay with it. If it sells out in a day or in an hour... I'm not.

I don't understand where you stand. Is it a right/wrong issue to you? Are there gray areas or not?

To me, it's a right/wrong thing: I don't see anything wrong it. Yes, your examples of selling drugs and laundering money don't make it right...but they also are breaking the law. If it's tickets, electronics, cars, whatever...if you own it, and people are willing to pay top dollar for it, then there is nothing wrong.

[InfiniteNothing]

So it's ethical as long as it's legal? :eek2: The laws are just words in a book. I don't think they relate to ethics. I mean, infidelity is legal. Is it ethical? You probably don't think so.

In terms of scalping, yes, I think there are grays. Sometimes they are useful and sometimes they are harmful.

Where do you stand on scalping? It is illegal (for the most part) but it's basically the same thing.

[MikeD]

I mean, infidelity is legal. Is it ethical? You probably don't think so.

Legal? Well, it can sure lead to negative judgement against the perps in a divorce case. :hihi:


In terms of scalping, yes, I think there are grays. Sometimes they are useful and sometimes they are harmful. Where do you stand on scalping? It is illegal (for the most part) but it's basically the same thing.

Get it if you can. If someone wants to pay me $500 for a ticket, that's on them. I wouldn't, but who am I to tell you how to spend your $$$?

[CornMonkey]

if i could buy 2 Wii's for $500 ($250 each) and sell one for $500+...heck yes i'd do it!!! without a doubt, i'd do it. then i'd gloat about it, and probably do it again. under my own personal convictions, i don't find it unethical.

but if i happened to trample over some poor kid in a wheelchair to get my Wii, then yeah, i'd probably feel a little bit bad. but i'll cut him a deal and sell it to him for only $400.

[InfiniteNothing]

Anything profitable is justified? Soda machines in schools are fine?

Legal? Well, it can sure lead to negative judgement against the perps in a divorce case. :hihi:



Get it if you can. If someone wants to pay me $500 for a ticket, that's on them. I wouldn't, but who am I to tell you how to spend your $$$?

So we can pretty much agree that legality isn't too important to our discussion since you don't find scalping unethical. Right?

The victim here is not the the guy shelling out the money. I'm not concerned for him. The victim is the kid who can't camp out at the store and who's parents are too poor to spend $1200 but not too poor to spend $500. Maybe in the case of the Wii his parent's can't spend $600 but they can pool money for $200 or whatever. By adding to the rush, and by consuming, you are going out of your way to add to the problem just for profit. That just seems karmically unhealthy.

[cheapie]

Anything profitable is justified? Soda machines in schools are fine?


So we can pretty much agree that legality isn't too important to our discussion since you don't find scalping unethical. Right?

The victim here is not the the guy shelling out the money. I'm not concerned for him. The victim is the kid who can't camp out at the store and who's parents are too poor to spend $1200 but not too poor to spend $500 AND WON'T WAIT A COUPLE OF WEEKS. Maybe in the case of the Wii his parent's can't spend $600 but they can pool money for $200 or whatever. By adding to the rush, and by consuming, you are going out of your way to add to the problem just for profit. That just seems karmically unhealthy.

fixed. ;)

[InfiniteNothing]

Hah. Well, I think it would be nice if the family could get it before Christmas. With the XB360s I think it was at least a few months before it was widely available in stores.

This was posted just last month: XB360s available (http://forums.gotapex.com/showthread.php?t=98428&highlight=360)

[MikeD]

Anything profitable is justified? Soda machines in schools are fine?

What are you talking about? That is a completely different issue...there are obvious health ramifications at stake. You're mixing apples and oranges. Stick to the topic.


So we can pretty much agree that legality isn't too important to our discussion since you don't find scalping unethical. Right?

Scalping shouldn't be illegal. I've never, ever understood that. Again, THE BUYER IS WILLINGLY CHOOSING TO PAY THE PRICE. That's where the argument should end.


The victim here is not the the guy shelling out the money. I'm not concerned for him. The victim is the kid who can't camp out at the store and who's parents are too poor to spend $1200 but not too poor to spend $500. Maybe in the case of the Wii his parent's can't spend $600 but they can pool money for $200 or whatever. By adding to the rush, and by consuming, you are going out of your way to add to the problem just for profit. That just seems karmically unhealthy.

Folks may not agree with this, but life is hard. Get over it.

Back in the day, my parents didn't have the money to get me the old school Nintendo 8bit system. But I really, really wanted one...so I got a job delivering newspapers, saved my $$$ for 2 months, and bought one. I was 12 years old at the time.

Here is the difference (and the problem) with today's society, especially kids. Instant gratification. Gotta have it.

You know what? If a family can't afford, they can't afford it. That's how it goes. There are many, many things that my kids want but don't get. Amazingly, they're going to live and be able to survive the trauma of not haiving everything in life. They're actually on course to become good, upstanding adults. ;)

It's a game system. If you own one, and someone wants to pay you an excessive amount of money for it, so be it. That's their problem, their loss, and your gain.

[Jeffbx]

The victim here is not the the guy shelling out the money. I'm not concerned for him. The victim is the kid who can't camp out at the store and who's parents are too poor to spend $1200 but not too poor to spend $500.

He's not a victim. He's one person in a looong list of people who want an item in short supply. The fact that he can't pay a premium for this item simply means he either doesn't get it or he must wait for the supply to meet the demand so the price can drop.


By adding to the rush, and by consuming, you are going out of your way to add to the problem just for profit. That just seems karmically unhealthy.

I don't think so. It's the high demand & low supply that's driving the cost up - this is how business works. Let's say there's a new car that's in high demand - the Saturn Sky (http://www.dfw.com/mld/dfw/classifieds/automotive/14001472.htm), maybe. The orders are far outnumbering the number of cars coming into the dealers. If you want one of these cars right away, you're going to have to pay a premium to the dealer because of the high demand. This is no different from a game console. By not rushing out to place your order, you're making absolutely no difference to the poor kid who wants a Saturn Sky for christmas but his parents can only afford to pay sticker price. This is because someone else who is willing (and able) to pay a premium will still get it before him.

By buying early & selling on your own, you're putting yourself in the position of the car dealership. No one has to buy from you. You're not affecting the demand for the product one way or another. You're just making something available immediately for a premium cost. To some consumer, that additional cost is worth being one of the first to have it.

[smeakim]

As I stated before its about instant gratification. We let marketing and people make us belive that we need it now. I understand a child might want something as they see it, but explaining to them that they can get one when the price comes down and teaching them a lesson about the situation will be much more beneficial. Also in my opinion, I would rather my kid not have one and go outside and play rather than sit in front of the TV playing some mindless game. JMHO

[InfiniteNothing]

What are you talking about? That is a completely different issue...there are obvious health ramifications at stake. You're mixing apples and oranges. Stick to the topic.



Scalping shouldn't be illegal. I've never, ever understood that. Again, THE BUYER IS WILLINGLY CHOOSING TO PAY THE PRICE. That's where the argument should end.



Folks may not agree with this, but life is hard. Get over it.

Back in the day, my parents didn't have the money to get me the old school Nintendo 8bit system. But I really, really wanted one...so I got a job delivering newspapers, saved my $$$ for 2 months, and bought one. I was 12 years old at the time.

Here is the difference (and the problem) with today's society, especially kids. Instant gratification. Gotta have it.

You know what? If a family can't afford, they can't afford it. That's how it goes. There are many, many things that my kids want but don't get. Amazingly, they're going to live and be able to survive the trauma of not haiving everything in life. They're actually on course to become good, upstanding adults. ;)

It's a game system. If you own one, and someone wants to pay you an excessive amount of money for it, so be it. That's their problem, their loss, and your gain.
Okay, like I said, I don't care about selling high. I'm wondering more about buying low. You say if the family can't afford it, they can't afford it. But that family may not be able to afford it because of what the gougers do. Their actions make things worse. Sure tough noogies to the parents and kids but it doesn't have to be that way. Those 10000 systems on that will be on ebay could make 40000 people's day, or month, or season.

[InfiniteNothing]

He's not a victim. He's one person in a looong list of people who want an item in short supply. The fact that he can't pay a premium for this item simply means he either doesn't get it or he must wait for the supply to meet the demand so the price can drop.



I don't think so. It's the high demand & low supply that's driving the cost up - this is how business works. Let's say there's a new car that's in high demand - the Saturn Sky (http://www.dfw.com/mld/dfw/classifieds/automotive/14001472.htm), maybe. The orders are far outnumbering the number of cars coming into the dealers. If you want one of these cars right away, you're going to have to pay a premium to the dealer because of the high demand. This is no different from a game console. By not rushing out to place your order, you're making absolutely no difference to the poor kid who wants a Saturn Sky for christmas but his parents can only afford to pay sticker price. This is because someone else who is willing (and able) to pay a premium will still get it before him.

By buying early & selling on your own, you're putting yourself in the position of the car dealership. No one has to buy from you. You're not affecting the demand for the product one way or another. You're just making something available immediately for a premium cost. To some consumer, that additional cost is worth being one of the first to have it.
I get your argument. It's a fine economic argument but I don't see how it's fair. I think as many people as possible should have a shot at a system. Higher prices restrict who has a shot at a system. There's even the internet barrier. Not everyone has easy access to the web and therefore can't hit ebay.

[Jeffbx]

I get your argument. It's a fine economic argument but I don't see how it's fair. I think as many people as possible should have a shot at a system. Higher prices restrict who has a shot at a system. There's even the internet barrier. Not everyone has easy access to the web and therefore can't hit ebay.

Exactly - and it's NOT fair. Nor will it ever be. The only way for it to be fair is to have supply exactly meeting demand at a reasonable cost. If that were the case, we'd all be driving Porches & living in penthouses overlooking central park while we play our new Xbox 360s.

[ray]

It is a luxury item that people are willing to pay for. You can't really compare selling a video game console system with selling life-saving medicine.

[InfiniteNothing]

Exactly - and it's NOT fair. Nor will it ever be. The only way for it to be fair is to have supply exactly meeting demand at a reasonable cost. If that were the case, we'd all be driving Porches & living in penthouses overlooking central park while we play our new Xbox 360s.
I think randomly distributing them at MSRP or selling them at MSRP to those who want them most is most fair. If all the eBayers went away, that's pretty much how it would be. That's why I say a fair system could exist.


It is a luxury item that people are willing to pay for. You can't really compare selling a video game console system with selling life-saving medicine.

Well then, where's the ethical cut off point? I mean how much harm is acceptable if it is profitable. I'll black box the question. What is the most harmful thing (to say a working class parent or maybe a kid) I could pay you $500 to do? Drive-by mail box bashing? Kick to the Jimmy? Cut in line? Tell a kid there's no such thing as Santa?

[bagel]

Well then, where's the ethical cut off point? I mean how much harm is acceptable if it is profitable. I'll black box the question. What is the most harmful thing (to say a working class parent or maybe a kid) I could pay you $500 to do? Drive-by mail box bashing? Kick to the Jimmy? Cut in line? Tell a kid there's no such thing as Santa?

If you are trying to sell a house or a used car and people are willing to pay you $15,000 more than the second highest offer, then why wouldn't you accept it? There's no ethics involved whatsoever, unless you falsely advertise the car or house. It is simply supply and demand.

Asking him how much money he would take to inflict harm on someone else is a question of ethics.

[InfiniteNothing]

why wouldn't you accept it? Since you ask, I wouldn't take 15K more if it was a known drug lord making the offer. The buyer matters. All things the same though, I agree with you. There is no harm to person A willing to pay big money. In fact, he benefits (negative harm). Harm is done to those without internet access who also want the system but for whom you have now made the system unavailable by selling to peson A. Maybe you consider this infinitesimal harm. But so is cutting in line.

[Jeffbx]

I think randomly distributing them at MSRP or selling them at MSRP to those who want them most is most fair. If all the eBayers went away, that's pretty much how it would be. That's why I say a fair system could exist.

But they DO do this. On the release date, all the retailers who have the game consoles in stock sell them at retail cost, and everyone has the same opportunity to make a purchase. The ones who want them the most are the ones willing to wait in line to purchase them. Not everyone will get one, of course, but that's because the supply is too low.

Ebay is merely a secondary market created AFTER the product is sold, thanks to the high demand and the deep pockets of the people who are unwilling or unable to stand in line, but ARE willing to pay a premium for the console. For the people who are not able to stand in line, or who stood in line but could not make a purchase, their only options are to wait for more to be available, or to pay a premium to get one immediately.

You nailed it on the head before - it's an economic argument and it's not fair. There is nothing that can be done to MAKE it fair - some people will simply lose out, and some people who lose out can buy their way back in. It's the way a free economy operates.

[InfiniteNothing]

Lets say that a store gets 200. 50 people buy 2 to sell on ebay 100 people buy one, just for themselves. Those 50 people are screwing 100 people in line who will leave empty handed. it seems messed up. More messed up than if all 200 people just bought one for themselves and person 201 in line leaves empty handed instead of person 151.

[Winston]

Lets say that a store gets 200. 50 people buy 2 to sell on ebay 100 people buy one, just for themselves. Those 50 people are screwing 100 people in line who will leave empty handed. it seems messed up. More messed up than if all 200 people just bought one for themselves and person 201 in line leaves empty handed instead of person 151.


man it just seems to me that you are trying to what if something to death

[VTGreg]

Most stores typically limit each person to one unit with this type of demand.

If someone is willing to wait in line and purchase the unit, it is then their choice to do what they want with it. There is no ethical question here.

The person who resales the item on ebay is assuming a risk of standing in line, attempting to sell the item on ebay and receiving payment for the item. If they believe the monetary gain outweighs the risks then so be it.

[InfiniteNothing]

man it just seems to me that you are trying to what if something to death
I am. Thanks everyone who gave input.

[MikeD]

I am. Thanks everyone who gave input.

What if I don't like you thanking me? What if no one likes you thanking them? Then you'd have a whole group of unhappy, screwed over people. :hihi: