Hiring the Homeless to Stand in Line for iPhones? Genius!


“That is just wrong,” posted one commenter in response to a story out of Los Angeles which raises vital questions about the morality of the market. From Ubergizmo:

A businessman in L.A. took scalping to a whole new level, when he picked up about 100 homeless people from Skid Row in Los Angeles. He promised to pay them if they waited overnight in the line outside Apple’s retail store in Pasadena, California. Since Apple allows customers to purchase no more than two units, he would have had 200 iPhones, all while paying each hired hand $40 for the trouble.

The operation did not proceed as planned. When the employees within the iPhone store heard what was happening, they refused to sell to the hired buyers. The scalper then refused to pay those who were unable to deliver iPhones to him. That upset the homeless crowd and aroused a disturbance which prompted police to escort the scalper away for his own protection.

Heads shake and fingers wag in reaction to this scheme. This scalper exploited homeless people, the story goes, proving himself to be a jerk at best and perhaps even a criminal.

The incident evokes a similar story involving Trader Joe’s. A guy from Canada drove down through California to buy inventory from the grocer which he then resold back home (where no Trader Joe’s stores exist). We used to call that an import business. Like Apple, when Trader Joe’s discovered his operation, they refused to do business with him. Yet it’s not entirely clear why, because he was helping them get their product to a market they have not otherwise reached.

Likewise, in the Apple case, the iPhone scalper was providing a value to all parties concerned. Obviously, the homeless people were getting income they otherwise would not have. Apple was moving its inventory. And the scalper's end-customers had access to a rare and desirable product without having to wait in line. Whom did this hurt exactly? How was anyone’s access to trade unjustly restricted? There is no right to purchase a product at a particular price under particular circumstances. That's why the police rightly deemed this a "business issue" and not a crime.

It may be tempting to scoff at the scalper’s refusal to pay those who were unable to purchase phones. Then again, we may safely presume that the agreement was for orders fulfilled, not attempted.