Is it okay for a business to refuse to sell to suspected hoarders?

[glowacks]

@bump

I don’t think that stuff really changes; my guess is that a platform like Amazon or Ebay (assuming that what you’re seeing is happening through a site like that) is causing information asymmetry in ways that prevent the normal mechanisms from taking hold.

For example, on Amazon, I wouldn’t be surprised if the way to be successful is to somehow game the search engine and price, rather than you know, actually sell your product for what the market will actually bear. In other words, figure out how to game the site to make the consumer’s determination of what the market will bear very hard to do. I suspect that’s why it’s so damn hard to actually compare products on Amazon- people are trying to game it every way they can.

This reminds me a scheme that was used for a long time in EVE online, the space MMO with a heavily player-driven economy. There were some items that were so rare that they didn’t have their own listing place in the normal Market. You had to search “contracts” for them, and people would offer these items for sale on “contract” in a market separate from the main Market. Part of UI in the search results was a “sort by” button, which you could sort the results of your search by price or how far it was away from you or how recently it was put on the market. The coders however only implemented this result sorting on a per page basis. Quite often there were too many items to show on one “page” and only that page would be sorted by the method you indicated. To determine which items were on the first page, the game always grabbed the oldest ones on the market, presumably because the internal contract number was the lowest for those.

Now again, these items were rare, and people had no idea what they “should” go for, only that they were rare and expensive compared to the stock versions of the item. So what some clever people did, knowing how lazy most people are about searching for things, was to make sure the first page was blanketed with overpriced items they were selling. Enough people wouldn’t look beyond the first page that it was profitable to buy a reasonable number of items off contracts at the real market price and relist them for a higher price. Remember the key to this was having a lot of unsold merchandise flooding the front page of results so people would think your inflated price was the market price, and the profit margins were huge, so you could afford to have a lot of unsold merchandise despite its rarity (you could start with less rare, less expensive stuff at first and work your way up). It’s unknown when the first person or group realized this was possible, but I read an article about the first person to realize they were doing it, simply because they couldn’t understand why someone would want to buy so many rare modules from him at rates that were above market prices.

Eventually the developers caught wind of what was going on and got the coders to fix it so that the sorting between the pages was done the same way as the sorting within the page, as most people assumed it always was.

Now, I’m not saying that Gato’s acquaintance is using the some sort of misinformation about prices to get people to spend more than market price on goods on a scale that exceeds most people’s imaginations, but it happened in the best economic simulator currently available. It might be another of the schemes on EVE that was popular - listing a bunch of somewhat rare items for sale at an extremely high price while also listing buy orders for the same items at the same inflated price and then using some esoteric mechanics of the game to be able to fail to actually buy the item should one be offered. Using this technique you could also get people to spend more money on something than it was worth, though it had to be rare and not easily accessible or people would be taking down your buy order unfilled quite quickly without needing to buy your overly expensive item. Most of the scam was being played on people by listing the buy price HIGHER than the selling price and getting people to think they could profit on it by moving it one system, though this isn’t necessarily needed to run this scheme - all you need is a way of preventing transparent market prices for items whose market value is unknown by most participants. That’s the key to breaking out of the Econ 101 assumptions - having more information about the market price of the item than the buyer.

It’s also possible that they’re illegally (or at least grey market-ly) importing and/or exporting goods. There can be a wide difference between PPP (Purchase Power Parity) exchange rates and market exchange rates, and there are many items that are sold locally at PPP rates, because that’s the local market rate, so if you can buy them in a low PPP market and import them to a high one, you can make a good profit even buying at retail prices.

Now back to your previously planned hoarder thread…

[bump]

@DavidwithanR

This is pretending that “the market” is a separate entity from what’s being observed. If gaming the system is going on, then gaming the system is integral to the market. (Some might say gaming the system IS all there is to the market.)

What I’m getting at is that in most markets, the prices of items reach an equilibrium based on supply, demand and available information. When that information is asymmetric or incomplete, the price doesn’t really hit an equilibrium- consumers can’t compare prices or substitutes.

That’s what stores try and do all the time- big box stores will have their own “special” versions of things like TVs so that if you go and try and price a 55" TV, you don’t have 6 similar televisions that you can really compare; you have 3 55" TVs, 2 54" TVs, and a 56" TV, and all of them have different technologies, different add-ons, and the like. This is with the intent of making it very hard to effectively compare them with each other.

That’s what people do online- they list multiple versions of similar, but not quite the same things, they flood the search pages, they fiddle with things to get them to show up in searches (maybe when they shouldn’t show up), etc… making it really hard for someone to go search for an item and get an idea of what the “typical” one costs, and what it comes with, without a LOT of effort.

[Filbert]

My former landlord made a surprisingly good living buying and reselling online, largely buying bulk slow shipped electrical components from China and reselling from within the UK; what he was mostly selling was convenience. Makes sense.

At one point though, a tea company did a special offer, free decorative tin with 80 tea bags, for sale at most major UK supermarkets. He bought loads (got me to drive him round all the supermarkets in fact, as he had no car), taking the tea out, and reselling the tins at 3 times the price he just bought them.

He was expecting the buyers to be from overseas, as the tins were only sold in the UK, and most of them were, but not all. People from within the country were buying them at this hugely inflated price, while they were still in the shops, when they could have got one for 1/3 the price (cheaper even if they paid delivery) with the tea included.

‘The market’ overall may be rational, but there’s enough fuzziness and irrationality at the edges for some people to make a living, even without sneaky tricks.

I wonder if he’s drunk all the tea yet.

[Colibri]

@Mr.Slant

The customers in question don’t seem to ever buy more than one of the same.

That suggests to me that they are not re-selling. Otherwise one would presume that they would purchase multiples of items that they found to have the highest profit margin.

[I_Love_Me_Vol.I]

@Riemann

Of course. I don’t have to sell to a person who walks into my store naked, screaming and covered in faeces just because his skin is some color!

So it’s OK to refuse service to a brown person… as long as the reason they’re brown is because they’re covered in shit.

[Textual_Innuendo]

@Mr.Slant

The customers in question don’t seem to ever buy more than one of the same.

So they’ve got a well-off boyfriend/girlfriend/uncle/aunt/grandma that likes to spoil them.

I don’t think it’s much cause for concern, because there’s lots of non-self-destructive reasons they could be buying your products in these volumes, and either profiting from them, or genuinely enjoying them for personal use.

Were I in your shoes, I wouldn’t worry unless I start seeing multiple cards declined at the register or some other tell that would indicate actual self-destructiveness in their purchasing behavior.

Otherwise, as lots of folk pointed out, they’ll just go somewhere else anyways, and for now, there’s plenty of benign explanations for their purchase volume.