Why your holiday gifts are sold out: Scalper bots

SAN FRANCISCO (KGO) -- Many parents know that feeling of dread when you can't get your hands on the hot toy of the holiday season. But what you might not realize is, it's not just high demand that's making these items scarce.

It's actually hi-tech, high-speed software robots, that snatch-up the sought-after toys before you can get them in your cart. In a partnership with Consumer Reports, 7 On Your Side's Michael Finney takes a look at "robotic scalpers."

Last year, Mindy MacDonald went hunting for a Hatchimal, a few weeks before the holiday.

"I found there was nothing in the stores, nothing online. Everything was sold out. I went everywhere I could think of," MacDonald said.

Since it was her daughter's big Christmas wish, her family cracked under pressure, and found one available on eBay.

MacDonald shelled out quite a bit.

"$120 dollars for it, which I think is almost double retail what it was going for back then," she revealed.

The Hatchimal shortage was due, in part, to the use of "scalper bots." It means, short for "robots."

They are designed to do one thing: buy mass quantities of a particular item in a matter of moments.

"This is their sole purpose. They are created for speed, and you're just not going to beat them," says Bree Fowler, Consumer Reports Security and Privacy Expert.

Once they buy up as many as they can, they turn around, and sell them on the secondary market at a premium.

Fowler says customers end-up paying more for Hatchimals. "Sometimes two, three, four times more than what you would be paying in the store," she said.

Scalpers have used this technology for years, to snatch-up tickets to concerts or sporting events.

"The Bots Act, " or "The Better Online Ticket Sales Act of 2016," tried to end to that practice.

But the law only applies to tickets, leaving scalpers to move on to things like toys or sneakers.

It's not illegal, but it is frustrating for consumers like MacDonald, who places "bot" users on the naughty list.

"I feel like people are taking advantage of other people's desperation," MacDonald admits.

So, how do you get the must-have toy without getting played? Bree Fowler says, you won't beat the "bots." So try to get ahead of the trend.

"When there are pre-orders for things like the Nintendo systems, you can get online, and try your best. It also pays to shop early. Get in before the hype," Fowler advises.

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