Is MTGOTraders/Cardbot Double Dealing Prices?

(Image courtesy of the excellent Harry Ryttenberg. Get well soon.)

On Wednesday of last week, after publishing this article on StarCityGames.com, I logged on to my Magic Online account and did the usual price check around the neighbourhood. Clicking on Cardbot revealed prices that made it look like the network had raised their prices on all the cards I talked about in my article by 15-20% overnight. Since they had been doing such things based off my tweets, I assumed it was correct. It turns out that wasn’t true, but the reason why it wasn’t true will have to wait a minute.

Now Cardbot, Marlonbot, and MTGOTraders are all linked together into one giant bot network. Some of you may have seen my recent Twitter dust-ups with Heath Newton, who (I believe) runs MTGOTraders and help sets prices for the giant bot network. He also pilots a Fox News-style spin machine out of his Twitter account and on the MTGOnline forums where everything he does regarding speculation is good, while everything people like me do (read: investors/collectors/speculators) is bad for you, bad for the game, and probably bad for the world at large. He’s recently said things like the following:

You mean the same dual lands that Cardbot and Marlon have thousands of dollars of sitting on their bots right now? Those dual lands? Yeah, I’m sure they would be delighted to take massive losses just so you can feel like people who happily bought cards at those bots to invest in the future of dual lands got got.

This one is priceless. In it he is implying that it is morally wrong for you to invest in large numbers of specific Magic cards, because it has a negative impact on other players and the community as a whole. This is despite the fact that the math regarding dual lands doesn’t support his argument, the explanation in my article doesn’t support his argument, and basic philosophy also does not support his argument. When confronted with that position, he had this to say:

Right. We’ll just take your word for it. Because everything else you have been saying always makes so much sense. This seems like a good spot to spin some of Heath’s greatest hits.

So speculation is bad, but when MTGOTraders refuses to sell cards at the old price and then increases the price hoping to make more profit (read: he speculates), he does it for the powers of good! You can just imagine the rainbows flying out of his butt when he saved all those Aether Vials from the evil clutches of Speculatron (read: willing and eager customers).

Having fun yet?

Anyway, back to our story. After I made that original tweet about the dual land prices, I started talking to some friends of mine who were confused, because when they logged in they didn’t see the new prices, they saw the old ones, meaning the same ones listed on the website. Then the Magic Online downtime occurred, the prices looked like they had been reset on the website to the old ones, and I forgot about it.

Except on Thursday, the same thing happened. I saw the exact same prices inside the bot as I had seen before (Underground Sea was 38 tix, Tundra 28), while everyone else saw the prices that were on the website (Usea 32, Tundra 24). Something was obviously funky, so I decided to conduct an experiment.

1)      I log in to cardbotX with mixedknuts, screenshot prices for a group of cards I see, and record the evidence.

2)      Two other accounts log in to cardbot X, screenshot prices for the same group of cards, and record the evidence.

3)      Compare results.

4)      Check this on one of the Marlon bots and an MTGOTraders bot as well to verify it is widespread.

The results are as follows:

Note: Time discrepancies are the result of different time zones. As of this morning, Monday August 22nd, the prices had not changed.

Conclusion : Cardbot/Marlon/MTGOTraders hadn’t raised their prices… they had only raised the prices for me.

Now I can look beyond Heath’s continuous ridiculous pogrom against speculators and the rampant hypocrisy of the things he says online, but this type of behaviour is just shady. Obviously I have other accounts I can use to avoid the extra charges should I want to, but the question I’m asking myself is one that you should ask yourself as well:

Do you really want to give any sort of business to a company that operates like this?

What’s to stop them from double dealing you if you buy cards in a way they don’t like, or point out all the times Heath’s public opinions are clearly wrong? I know for a fact my account isn’t the only one this has happened to.

Perhaps of greater concern – if they can do this, it’s fairly simple to add a ‘where’ clause to the surcharge as well. Say you have shown you like to buy Legacy cards in the past – maybe they profiled you for this and only charge you more for sets that are important to Legacy, hoping you never notice?

God forbid, what if they have already profiled you as a sucker and are charging you more for cards you might overvalue already?

I look forward to hearing from Cardbot and Marlon management as to the rationale behind this practice, how widespread it is, and whether they will continue to use it in the future. I can be contacted at mixedknuts@gmail.com

–CardGame
@NextLevelSpec for Magic finance and Magic Online
@mixedknuts for everything else.

Advertisements

24 responses to “Is MTGOTraders/Cardbot Double Dealing Prices?

  1. I knew there was a Twitter fight going on, but I didn’t realize all of what had actually happened. Charging different customers different prices is an indefensible practice if you want any respect from the market. If you have a problem with speculators, do a better job running your business.

  2. Charging different customers different prices is an indefensible practice if you want any respect from the market

    Haha what? Businesses do this all the time, since it is the easiest way to make money. In some industries (airlines) it’s the ONLY way to make money. I can see why a customer might be annoyed by this, but it’s not as if there is anything morally wrong with it (any more than any profit maximising behaviour is morally wrong), and calling it a “shady” practice seems like going a little far.

    Clearly he has determined that you have more information than he does, so he’s selling to you at an inflated price to reduce the information asymmetry. This is no different to a car buyer being more skeptical that she is getting a bargain from a used car lot than from a private sale, and adjusting the amount she is willing to pay accordingly.

    This guy’s anti-speculation arguments are incredibly dumb though, and I wish you well in your crusade.

  3. Ted, it’s hypocritical of you to get upset. You might not like it but it’s his prerogative to do whatever he wants with his business (including charging you more) just like it’s your prerogative to attempt to make as ,uch money as possible by speculating.
    In short, welcome to a non-regulated, truly free market economy.

    • I’m not upset, but I do think the community should be aware of the practice and I had not seen it reported anywhere else. Like I said, I can work around this without any difficulty, but not mentioning it would be a mistake in my opinion.

  4. Haha what? Businesses do this all the time, since it is the easiest way to make money. In some industries (airlines) it’s the ONLY way to make money.

    I disagree. Airlines either provide additional services for more money (business-class flights) or charge less if you are a frequent flier. Here, you have the opposite — they charge you more if you buy a lot of their goods. Clearly an unusual practice to say the least.

    Or maybe you meant some different practices by airlines that I can’t immediately recall, then I apologize.

    • You pay more for the same seat on an plane depending on what day you buy it. The reason for this is that they are trying to separate the people who are willing to pay a lot from the people who are not willing to pay a lot.

      To give another example, any business that gives discounts for seniors, students, or other groups is doing exactly this – charging different people different prices based on their willingness or ability to pay. Coupons are no different. This really is not an unusual practice.

      Read more here: http://en.wikipedia.org/wiki/Price_discrimination

  5. Ted, I think your arguments have all been spot on re: Heaths comments on speculation being a little “seedy” – but in this instance I think he’s quite entitled to offer different prices to different customers. Nothing wrong with you highlighting it either, but I think your article does read a little “rant-ey” regarding a practice Heath is perfectly entitled to engage in (using your correct logic re: you’re free to buy/sell and price your own cards as you see fit).
    PS In your sports betting, have you had anything on the Eng v India cricket today? 😉

    • Russ, I don’t think anyone is saying he isn’t “entitled to offer different prices”. Clearly the man can do whatever he wants with his bots. The point is that this is a practice that many of us may not have even known the bot buisnesses engage in, and some might find “shady”. Since MTGOTraders has been engaged in arguing about what is/isn’t moral in the MTGO virtual economy, the fact that they are engaging in this activity is relevant. As Knut points out, if they fix their bot prices based on the account of the customer, what is to stop them from analyzing when a player buys “crap” or “junk” rares, and arbitrarily marking up those cards for those buyers, trusting that they won’t know the difference.

      I’m just glad to know that the bot biz do this practice, and without this post/blog/article/whatever-the-hell-it-is I wouldn’t have known. I’ll leave the morality questions to others.

  6. Actually, I think he’s perfectly justified. His goals are as follows: a) he wants to keep the prices down for the community, because it’s better for the development of Magic, because rampant speculation(and hoarding) has, as we’ve seen, especially recently, caused major price inflation and b) he wants to do it in a way that doesn’t affect most consumers, just the speculators whom he knows about. I think that while his method may be flawed(obviously there are very easy workarounds) and probably ineffective(I don’t think it will really dissuade speculators all that much) I think his intentions are pretty good. Justified, even.

    • “His goals are as follows: a) he wants to keep the prices down for the community, because it’s better for the development of Magic”

      Right, that must be why he went into the business of dealing in MTGO cards, for the good of the game. How altruistic of him. I expect he beatification any day now, as he is surely a saint of the MTG community. >_>

  7. This is at least a two year old practice by cardbot traders marlon etc. They do it because the other option(mass banning you from their bots) doesnt work due to potentially left over credit. I DO NOT find it unacceptable, BUT I do find it unacceptable not to be informed at the start of each trade that you are being surcharged, IE hidden fees. The only reason this is a problem to me is because the website, and the classifieds will not reflect this hidden fee.

    Regards,
    Casey Stewart
    Owner
    http://www.thecardnexus.com

  8. A discount for some is no different than a surcharge for some. I don’t see anyone screaming “I got charged less! Price discrimination!” I see no problem with that. I would charge some people more than others, too, if I had a bot, and it were capable of that.

    This article in question reads like a “white trash Springer episode”. Like I care that x chain charges speculators/hoarders more than normal folks. Bully for them. The chains mentioned have always been fair & honest with me. It sounds like the author got gaught with his hands in the cookie jar and is screaming “sour grapes!” in response.

  9. I’m all in favor of preventing hoarding. I despise hoarding. So it sounds like you’re in the wrong on that one.

    Canceling orders that have been placed because a card is going up is slimy, though. He did that to me a couple years ago – I ordered 4 Dark Depths from his web site at $4 each when I learned about Vampire Hexmage. He canceled the order and claimed that he didn’t have any. So that was pretty despicable.

  10. It’s a free market. People can and should be permitted to speculate and hoard. And bots can and should be able to charge what they want to who they want. I do not buy tons of cards, but when I do I shop around. Trying to charge me more would not work because I would just buy somewhere else.

    Also, I really like the supernovabots web site and bots because their pricing is completely transparent. I see the buy and sell prices all in front of me on their web site and I do not mind that they make a ticket profit.

  11. Obviously Ted wants everyone to think we do this to everyone now and cause a mass panic and have our customers lose our trust. This article is just his way of “getting back” at me for not agreeing with all of this ridiculous articles. We are going to add a warning to let Mr. Knutson know when his accounts have been added to the blacklist. I do not want Mr. Knutson as a customer of ours and I believe that is my choice.

    Since this article was posted we did however see a 5% increase in overall sales. I would like to thank all of our customers that see past Ted’s smoke and mirrors and scare tactics.

  12. Wow, i want to say ‘awesome article’ or something, even though its not an article per-se, but really interesting. I didn’t think that the programmers would go that deep and target specific people in such a matter. I’m glad I got out of the modo business…who knows, maybe cardbot had been doing the same to me. Also, I always use cardbot/cardbuyingbot etc when getting stuff simply for convenience…you have now swayed me elsewhere. Really insightful stuff knut. Well done. *golf clap*

  13. Here is the reply from cardbot:
    “I’d like to provide a few facts in order to inform readers and hopefully reduce the noise and speculation around this issue.

    I am the programmer of the technology used in the bots involved in this thread. I also am deeply involved in pricing on an ongoing basis.

    First off, users are only added to the list of “known hoarders” if they have shown a pattern of buying every available copy of a card from the bots in a very short period of time. Even if this is the case, if their history shows indicates that they are a “regular” user who just happens to be engaging in a little speculation once in a while, then they are not added to the list. While it is possible that once in a while these rules fail, and a “regular” player is penalized, this is a rare occurrence, and we’re happy to remove players who feel they were unjustly added to the list.

    For the past several years, this tactic has proved effective in keeping prices more stable and inventory more available, which we believe is in the interest of the player community (and therefore our own as well). Many times we’ve been able to avoid raising a price for all of our customers by increasing prices for a single user, who then quits visiting our bots (but who can still use his saved credit, which would not be possible if we outright blocked him). For certain cards, especially older cards, even a single user can have a big effect on the market when they relentlessly buy up every copy of the card. We’ve seen this again and again. Sure, these users can always create another account (and they do), but this is a pain, and so I suspect that some do not bother.

    However, I’ve noticed a disturbing trend lately, where speculation and even price manipulation have reached levels that I’ve never before seen (I’ve been on MTGO since Onslaught was released). A growing number of users are relentlessly buying and selling purely for speculative purposes. There are now articles devoted to teaching other users how to do this, and glorifying it as fun and profitable. The effect of this increased level of speculation is increased price volatility. Prices have been moving faster than ever, both up and down. This is especially true of older cards, where the “float” of cards available to trade is very low, and price manipulation is trivially easy.

    Increased volatility means increased buy/sell margins. I’m sure you’ve all noticed this when a new set comes out. Buyers and sellers protect themselves from sudden price movements by keeping the buy and sell prices far apart. As prices settle down and everyone becomes more confident of where the price “equilibrium” point is, then margins steadily decrease. This same phenomenon occurs when a speculator starts buying up all dual lands he can get his hands on — dealers are not sure how high or quickly the price will climb, nor when it will come crashing back down, so they raise margins, as well as prices, for everyone.

    All that said, we are sensitive to criticism of “shady” practices, and do not wish that any of our customers feel that we have dealt unjustly with them. To that end, we will immediately discontinue the practice of increasing margins only on known hoarders. Instead, we will post a message when these users enter our bots, asking them politely to refrain from such practices. We will see how well that works.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s