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Retail
8 minutes read

eCommerce and Scalpers: How to Provide a Good UX for Coveted Product Launches

by Alvaro Insignares
Retail
8 minutes read

eCommerce and scalpers go hand in hand when it comes to hot product launches. Many shoppers still can’t buy a PS5 without forking over exorbitant prices to a scalper. While scalper bots might not hurt your conversion rates on the day of a product launch, they can have disastrous effects on your customer experience and the overall User Experience of your eCommerce website. 

Before we delve into the issue of providing a great UX for a hot product launch, we first need to understand what scalpers bots are, how they work, and how they can have a negative impact on your eCommerce website. Sadly, using scalper bots to buy up an entire stock of limited-edition products is not illegal. Scalper bots can affect your website year-round regardless of whether you have a new product to launch or not. 

What are Scalper Bots?

Scalper bots, also known as retail bots or Grinch bots, are programs designed to automate the online shopping process. These programs are able to fill out the necessary information and complete the checkout process much faster than a human being ever could. They are typically used to bulk-buy new releases or limited-edition items. The person or group running the bot will then turn around and sell the scalped products on eBay or another website for an extremely large profit. 

In recent years, bots have been created for the sole purpose of buying rare, limited-edition sneakers. This niche of online scalping has birthed an entirely new type of bot called the sneaker bot. If there is a coveted item available online, you can be sure that there are scalper bots trying to take advantage of the market and buy up the available inventory. Sadly, bot activity is not just limited to sneakers and gaming hardware. In recent months, toilet paper, grocery store slots, and even COVID-19 vaccine appointments have been targeted by scalpers. 

How do Scalper Bots Work? 

Understanding how scalper bots operate is the first step towards successfully mitigating the damage they can do. In order to bulk-buy a coveted item, there are three important tasks a scalper bot must execute in order to be first in line and first to check out:

  1. Monitoring product pages
  2. Adding to shopping cart
  3. Completing payment 

In order to be the first one in line, you need to know when a product is going to be released. Scalper bots constantly check and monitor websites, category pages, mobile apps, and even Twitter feeds to find out the exact moment a product will be released online. Bots can monitor product information and continually check a product until the on-page button reads “Add to Cart.” 

Once a product is available, a bot needs to add it to the shopping cart. In order to bulk-buy a product, scalper bots must get around inventory limits, Captchas, and other security and control measures. This is often accomplished by using a network of proxy IP addresses that look legitimate to the eCommerce website. 

Now that the bot has the items in the cart, they are ready to check out and purchase the items. All the purchases are automated using pre-made guest accounts and batch credit card numbers. In some cases, stolen credit cards are used to make these purchases, but in many cases, legitimate credit cards are used to make purchases. As long as the credit cards are not stolen, there is nothing illegal about this process in the eyes of law enforcement officials. 

How Do Scalper Bots Negatively Impact Businesses? 

You might think that a sale is a sale. However, a sale to a scalper bot is far less valuable than a sale to a human. Product scarcity can help drive consumer interest and buzz around a product launch months after a release, but having a product sold out for long stretches of time can also create a negative customer experience and drive your customers away. If your competition is able to maintain a stock of a certain product that you are not, your business will likely lose customers to your competition. Let’s face it, when it comes to eCommerce, consumers will go where the products are. 

Continual bot monitoring of product information and category pages also has the ability to hurt eCommerce websites. The high volume of scalper bot traffic can slow the performance of your website and reduce the overall functionality of your store. This, in turn, creates a terrible User Experience for your customers who are likely to seek a better customer experience on another website. In extreme cases, scalper bot traffic can crash your website completely. When the PS5 was initially released back in November 2020, scalper bot traffic was responsible for crashing Wal-Mart’s website. 

Scalper bots that use stolen credit card information can also be a major problem for eCommerce businesses. Not only do businesses face the possibility of chargebacks and returns, but they also face being designated a high-risk by financial institutions. Fraud not only hurts your reputation, but it can make banking more difficult. 

Finally, scalper bots reduce your customer visibility. Customer data is a valuable resource that eCommerce businesses can leverage to make better business decisions and create more enriching customer experiences. When scalper bots overwhelm your website and buy your products, you lose valuable customer insights that you would have otherwise gained by selling to real people instead of bots. 

How Can eCommerce Businesses Combat Scalper Bots?

Keeping your website secure from scalper bots is an ongoing challenge. Best practices commonly include Captcha and rules-based systems, but these defense mechanisms are outdated and easily fooled by sophisticated bots. The evolution of scalper bots has necessitated the use of security tools that can do more than evaluate web traffic volume and look for known bot signatures. 

Today, eCommerce websites need to take advantage of Machine Learning to help determine the intent of online traffic and make real-time decisions about which transactions are legitimate and which ones are fraudulent. Speed of transaction is one of the telltale signs of bot activity. It normally takes people a little bit of time to fill in all of their payment and shipping information. When these transactions are happening quicker than normal, this is a good indication that scalper bots are at work. Machine Learning tools can help analyze this activity, identify scalper bots, and help keep them off your website. 

There are also less technically advanced ways to combat bots too. If you know that you will be releasing a product that is going to garner a ton of attention and consumer demand, you can limit the amount of information you provide about the release date and time. Yes, scalper bots are constantly monitoring the Internet looking for new releases, but you can help cut down on their effectiveness by giving them no notice. 

Additionally, you can take the time to audit your sales and cancel any suspicious orders that were made by bots. Auditing your sales after the fact will help you provide real customers with additional opportunities to buy your products after they sell out. This will also help discourage scalping bot activity if they know they will be unsuccessful in their attempts to bulk-buy your product. You can also utilize the power of Machine Learning to analyze your sales data to weed out any suspicious transactions and cancel them before they ship. 

Final Thoughts on Scalper Bots

Customers are not the only ones who suffer from scalper bots. Businesses also get hurt by scalper bots operating on their websites and buying their inventory. While you may think that a sale is a sale, scalpers don’t provide the same value to businesses as real customers. In fact, businesses lose the ability to make add-on sales when scalpers buy out their inventories before real customers get a chance to make a purchase. Combatting scalper bots requires the use of Machine Learning tools that can help eCommerce websites identify suspicious activity and transactions. 

eCommerce and scalpers do not need to go hand in hand. As online shopping becomes more prevalent, the importance of mitigating the damage done by scalper bots is going to be more important than ever. New best practices need to be developed in the fight against scalpers. If Wal-Mart’s website can crash from a large amount of bot activity, any website is vulnerable to this kind of attack. It is important to protect your brand reputation, customer experience, and inventory from the malicious presence of scalper bots. 

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