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May 17, 2011

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Writing their own ticket

Scalpers claim they are simple business people trying to eke out a living and are misunderstood by the public. Yao Minji discovers some tricks of the trade and how they often need to fight to protect their territory.

Marc Lin was waiting in a Metro station near Shanghai Grand Stage for a scalper he had called in advance. He was worried and on edge.

The 24-year-old financial researcher and self-confessed bookworm said it was the first time that he broke a rule or was involved in something illegal. It was cold in the subway station, but sweat kept dripping from his forehead.

"I was just so afraid of getting caught by the cops, beaten by scalpers, or getting forged bills," he told Shanghai Daily.

Soon, the scalper called and two men - one in his 30s, the other in his late 40s - arrived. Both looked so ordinary that one wouldn't recognize them in a crowd.

The younger man checked the tickets and handed out the money while the other scalper kept about 100 meters away, watching for police officers.

For two Eagles concert tickets, each with a face value of 1,800 yuan (US$277), Lin was given 900 yuan in total. Later, the scalper would sell them at the door for 1,400 yuan to 2,000 yuan. While the exchange took place, the scalper complained "this concert is so difficult to sell; I'm really giving you a high price."

Lin almost trembled when he counted the bills, and didn't dare to check whether they were counterfeits in front of the scalper. He went straight to an ATM to deposit the money in his account, relieved to see all the bills were accepted by the machine.

"It may sound really silly, but I truly imagined a lot before going there. After all, the scalpers are known to be bad guys who are connected to gangsters, the outlaws and the violent ones who fight all the time," Lin said.


Trading history

The history of scalpers in Shanghai goes back before 1949, when they dealt actively in gold due to the terrible economy and highly unstable currency at the time.

Before the 1980s, during the last periods of the planned economy, many people secretly dealt with coupons (for rationing) of rare goods such as televisions, sewing machines and bicycles. However, it was tricky and dangerous as many were arrested and sentenced for "speculation and profiteering" crime.

The rationing coupons were canceled in the mid 1990s, but the scalper business developed rapidly as an increasing number of laid-off workers joined their ranks.

These days, scalpers, mainly composed of laid-off workers, the unemployed and some former criminals, have extended their business into a variety of fields from concert and sports tickets to shopping coupons, from lining up for applications to buy apartments to queuing for hospital numbers to see specialists. They also handle train tickets during the annual Spring Festival travel rush and foreign currencies.

"Since the country canceled the 'speculation and profiteering' crime, you can only punish the scalpers according to the Law on Public Security Administration. This means a detention of less than 15 days and a fine," says Rui Ling with Shanghai Runhe Law Office.

Only those dealing with especially large sums will be charged with the crime of illegal business operations, which can lead to a maximum jail sentence of five years.

In most cases, they are fined a few hundred yuan when caught by the police.

Scalper stereotype

Scalpers in Shanghai are usually described as middle-aged men who carry a notebook-sized leather bag containing tickets and cash while wearing forged branded jackets. They look tough when needed, and are well-connected, familiar with the area they work and sensitive about pop culture trends.

"Many people think we are street hooligans, but we are simply small businessmen, except that sometimes we do need to fight to protect our business," said a ticket scalper surnamed Wang, a skinny man in his mid 40s known as "The Rib."

"You have to be tough enough not to be forced out of business."

On May 3, a scalper, based on Nanjing Road E., stabbed a competitor who later died in the hospital.

"Such fights are common among scalpers, especially in highly competitive areas like Nanjing Road E., but it was unlucky this guy died," Wang said.

He was forced out of the area due to competition four years ago, after a street fight in the lanes behind the luxurious department stores.

Wang boasts a typical resume of a scalper in Shanghai.

He was laid off from a watch and clock factory in 1992 with thousands of others. He was introduced to the scalper business by a well-connected neighbor. In the early times, he mainly dealt with foreign exchange and moved to department stores around 2000.

Many department stores have VIP cards that give a certain discount for returning customers who spend lots of money. Sometimes they offer special promotions such as a 30-yuan coupon for a one-time purchase of 300 yuan.

Scalpers like Wang take advantage of such opportunities. For example, if a customer only wants to buy 200 yuan in goods, they will find another customer who plans to spend 100 yuan and give each a few yuan. Then they take the 30-yuan coupon and sell it at a discount.

It was rather easy and didn't require a large initial investment so the competition was always ferocious. Wang said he and his two partners got into about three fights a week.

"It started getting too risky, so I finally decided to move to something else," he said.

In 2006, the real estate market was booming with a large gap between supply and demand. Many apartments were sold soon after hitting the market. Wang started lining up for numbers to buy apartments. He charged 40 yuan per number. The price has since risen to 120 yuan and Wang has a team of migrant workers under him now.

On the side, he also deals with concert and sports tickets, especially during the busy summer and autumn seasons, when more performances are scheduled.

Wang makes about 3,500 yuan each month on average. He said he can earn 7,000 yuan to 9,000 yuan in a really good month.

Like other scalpers, he has been caught by police a few times, but was only fined a few thousand yuan each time, three to five times the value of tickets he had with him.

Of course, he follows the scalper's golden rule - never carry more than 10 tickets at a time. His partner carries most of the tickets and hides in dark lanes awaiting a call from him.

Some residents are torn about what scalpers do since they can be useful when you need to sell something like coupons or traffic cards.

"I have very complex feelings toward scalpers, a sort of love and hate feeling," said Zhang Lifang, a 42-year-old accountant, who regularly sells coupons to a scalper in her neighborhood.

"They can be helpful in saving money at times. But you can't really trust them either."
Three generations of scalpers


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