Baby Formula Shortage Worsened By Bots Snapping Up Inventory

Baby Formula Shortage Worsened By Bots Snapping Up Inventory

When Kevin Kara started hearing about the baby formula shortage, he realized he had an advantage over most parents. At his disposal was a computer bot which scours the internet to find the rarest of gems: in this case, a retailer who just put baby formula up for sale. It gave him the ability to buy before anybody else, no matter how desperately they were hitting the refresh button.

Kara, 25, who doesn’t have any kids, decided to use his powers for good. He says he’s helped three fathers buy formula for their infants. “I’m doing my best to help who I can,” he said. “The downside is a lot of people are buying it with bots to resell on eBay at marked-up prices, which is insane.”

He has seen others bragging about their exploits reselling baby formula in several “cook” groups on Discord, a messaging platform, where people who use bots to buy things on the internet swap tips and success stories. The bots have become a common tool for those looking to get their hands on a PlayStation 5 or a limited-edition pair of Nikes. Kara began using bots during the early days of the pandemic to nab football cards after realizing his chances of success were slim if he didn’t use one. He has since used bots to buy video-game consoles, computer parts and other items that are difficult to find.

Right now, the most difficult item to find in America is baby formula, which had out-of-stock levels of 43% in the first week of May, according to Datasembly. The shortage has been fueled by a voluntary recall from one of the nation’s top manufacturers, Abbott, after two infants died after consuming its formula. The company closed its main factory in the U.S. for inspection, and said it could reopen within two weeks, subject to Food and Drug Administration approval. Other manufacturers have scrambled to ramp up production, but they’ve been unable to meet demand.

Bobbie, a start-up, saw its customer count double the week after the Abbott recall and has had to turn away new customers since the beginning of the month. Its manufacturing partner, Perrigo, is operating at full capacity. “We can’t produce any more than we are currently making,” said CEO Laura Modi.

It makes for a desperate situation, ripe for bad actors looking to make a buck. “People are definitely using bots to snap up baby formula,” said Cyril Noel-Tagoe, principal security researcher at Netacea, a cybersecurity firm that specializes in bot detection. “While some scalpers are doing it to profit off the unfortunate situations, some scalpers are offering their services for free to combat the others.”

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While scalpers are likely exacerbating the situation, it’s unclear how many of them are snatching supply from the grasp of parents and reselling it at higher prices. Most retailers have implemented strict limits on the number of cans a person can buy.

The Biden administration urged retailers on Thursday to devote more resources to monitoring predatory behavior when it comes to the sale of infant formula. The Federal Trade Commission and state attorneys general have been called on to crack down on price gouging and unfair market practices, like third-parties reselling infant formula at steep markups.

Even the botters are debating the ethics, asking if it’s acceptable to use bots to buy baby formula if it’s for personal use, for instance. “It sounds so bad to say out loud,” said one member of a cook group called Acquired Wealth, which typically uses bots to buy sneakers, game consoles and trading cards. He was surveying the group on whether it was acceptable for his niece to use a bot to buy formula for her baby. By doing so, she could save time driving around checking stores for inventory.

In another group for sports-card collectors, called Card Purchaser, group members seemed all too aware of the temptation to use bots to do evil, with one chiming in: “Anyone coming here to flip will be called out and blasted. Us Dad’s [sic] need this page!”

The group set up a page on Wednesday that monitors sites like Target and Walmart for restocks of baby formula after several fathers posted in the group that they were having trouble purchasing formula for their children. They now get alerts when formula is back in stock, including requested brands like Nutramigen Hypoallergenic Infant Formula, which uses a lactose-free formula for babies allergic to cow’s milk. They must then go purchase the item themselves, manually.

It’s not the first (or last) time that bots are chasing hot inventory. Last holiday season, they snapped up Advent calendars and Lego sets, said Thomas Platt, head of sales at Netacea. During its Black Friday sale two years ago, Walmart blocked more than 20 million attempts by bots trying to buy PlayStation 5s in just the first 30 minutes they were on sale.

“Everyone knows in the retail industry that bots are the plague of the online world,” said Janey Whiteside, Walmart’s former chief customer officer.

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