Is GameStop a Scalper?

When does a retailer become a scalper?

A common opinion I see online as simple as selling Pokémon products for anything more than MSRP, regardless of the market environment and the allocations from distributors.

And, by this definition, there is no question stores like GameStop, which have begun to sell Pokémon products for above MSRP, would qualify as a scalper.

But to get to the bottom of this, we need to look at the definition of a scalper:

And, by this definition: there is an argument retailers selling above MSRP could qualify as scalpers…

They:

But, this is just the nature of the retail business model, one of the oldest business models in history. And this business model works because retailers are adding value.

A scalper, on the other hand, is a whole other beast.

Not only does a scalper not create any value… they actually steal value from the community.

Scalpers hurt the market by making it harder for genuine collectors to buy products at fair prices, while providing no services to justify their markup. Rather than facilitating transactions like legitimate retailers, they create artificial barriers that impede the natural flow of goods from producers to end consumers.

So: what about GameStop?

Here what has put GameStop in the sights of angry collectors:

It’s not surprising many collectors are upset.

But despite this, under most circumstances, I would argue that a retailer like GameStop selling products above MSRP is a normal reaction to a booming market. While it sucks in the short-term, it is one of many tools retailers can and should deploy to counter the toxic effect of scalpers: retailers need to make sure scalpers cannot profit by flipping products they purchase at their stores.

Raising prices and enforcing order limits are essential to ensure product is available to the true collectors.

But I still can’t help but feel put off by the high price of the Moltres UPC. Something about it feels different.

The issue?

The Moltres UPC is an exclusive product that is only being sold at Gamestop. There are no competitors, or any kind of market force, to keep the price in check.

It feels like The Pokémon Company has handed GameStop a free ticket to exploit collectors by giving them an exclusive product, without putting any price controls in place.

But is it scalping? My frustration with the pricing makes me want to say yes…

But, like it or not, GameStop is still providing value in their role as the sole retailer for this product.

For one: the product might have never existed had GameStop and Pokémon not made this exclusive agreement. But, on top of that, they’re still providing all the value of any retailer:

So, no, I don’t think GameStop is scalper.

But I do think they’re abusing a position of privilege at the expense of the very collectors they’re trying to serve.

And they’re not alone: The Pokémon Company shares the blame by not enforcing reasonable pricing limits on exclusive product agreements.

The result is that both companies have conspired to create monopolistic conditions that hurt collectors in ways that feel similar to scalping: restricting access to products and inflating prices. Instead, The Pokémon Company should either require MSRP pricing for exclusive products or stop making them exclusive at all.

It’s not like they’re new to this: the official retailer of The Pokémon Company, the Pokémon Center, has enforced strict MSRP pricing on products since its inception. This includes MSRP pricing on their exclusive Pokémon Center Elite Trainer box products, which are consistently in high demand and sell out quickly.

While they’ve had many issues combating bots and giving collectors a fair shot at buying them, the Pokémon Center has limited purchases and implemented a queue system that has improved access to these products without jacking up the price. It’s not easy, but they’ve worked hard and have improved the experience over time.

This is the standard they should hold all retailers who receive exclusive products to.

On a practical note, although it pains me to say this… if you’re a collector who wants to add this product to your collection, your best option might still be to accept GameStop’s price.

eBay prices are already sitting at $200 USD or more, a price that is likely driven by international collectors who cannot get to a GameStop, and are therefore willing to pay a small premium to get it.

And, the past two GameStop exclusive UPC product (which were both sold at their MSRP price…) have performed decently well over time.

The Arceus VSTAR UPC:

And the Greninja ex UPC:

I don’t like what I’m seeing with the Moltres ex UPC, but it’s because of the monopolistic pricing, and not scalping.

As usual,

Thanks so much for reading the TCG Buyers Club newsletter. My name’s Grey, I buy cardboard, and I’m on a mission to make collecting and investing in Pokémon simple.

Cheers 🍻