[forgetsusername]

Methinks you miss the OP's point.

It isn't the name of the actual mechanism for the financial gain. It's a title for the idea of doing something wasteful, perhaps even net negative for society, for a very minor personal surplus. In this example, the guy wasted gas, created traffic, occupied employees time, put wear and tear on vehicles and roads and spent two days driving in circles...all for $2000.

People are free to do what they want, and the "exploitation" is fair game, but it seems odd to me too.

[dublinben]

I think you're being unnecessarily negative. This gentleman took a three day vacation, participated in his hobby, and earned $2000 for the pleasure.

[wpietri]

No, forgetsusername has me exactly right.

My point is that he didn't earn anything. He was given something worth €3000 after performing assorted actions. But earning is about an exchange of value. He did nothing valuable for Avis; he instead wasted their time and resources.

He only earned this money to the extent that pickpockets earn what they take out of wallets, or what con artists take from their victims. Sure, they work hard, and sure, they get money from it. That's not earning, that's taking.

[kelnos]

That's a bit harsh, comparing this to pickpockets and con artists.

Also consider that he now has 185k miles that he didn't have before. He might use those miles to take a vacation that he wouldn't otherwise have taken, which will in turn pour real money into the local economy of the place he visits.

[wpietri]

I agree that it's an unpleasant truth, but I think it's the truth.

Imagine he went to a local car company that had just two stores. Imagine he says to the owner, "Hey, I'm going to pay you €418 to drive one of your cars back and forth between your stores for two days. You do all the paperwork as if I'm renting the car 36 times. And then you buy €3000 worth of air miles and give them to me. How about it?"

No rational business owner would do that. They only reason Avis did that is that they are so large that they can't run it sensibly; instead, like programmers, they try to construct systems of rules that approximate a sane business. This guy found a bug in the system, forcing Avis to do something that is definitely not in their best interests.

It's a smart and well-constructed scam, but it's definitely a scam. And the guy knows it. He carefully tests Avis rules. He works around Avis's safeguards. He knew not to push it too far, which is why he limited it to two days. And I'll lay good money right now that there's already some programmer at Avis who is writing code to look for reservations like this and automatically consolidate them, as well as a lawyer who's wondering how to change the T&Cs to prevent this.

As to the latter bit, that is true of any scammer. For example, think of all the good that fake Nigerian princes could do with the money they take.

[saurik]

So, I can sort of appreciate where you are coming from: if someone doesn't buy salt and instead keeps going to the fast food restaurant down the street grabbing handfuls of salt packets, they are being a pretty awful leech, as the reason salt packets are free and just available like that is because we trust people to not abuse the process like that. The alternative turns into what we have to do with packets of BBQ sauce, carefully limiting how many people are allowed for various food purchases, and then charging them $0.25 for extra.

I can also see an argument that this person has discovered a security exploit that they are taking advantage of, akin to someone stealing wifi from an airplane hotspot. Whether because the person figured out an SQL injection attack in the website or because they figure out they can tunnel TCP over DNS, the more ethical thing to do is probably to report the bug to the company instead of abusing it to steal resources.

This, however, is a different situation: AVIS seems to seriously be mis-pricing their core product, and in a way that is kind of sketchy to begin with. Here we have a company that is doing something I can't imagine many of us actually like: they have built a ludicrous time wasting procedure by which they abuse human psychology to encourage specific buying patterns, and they did it in a way that is well-known to be dumb. The way they have done this is by manipulating prices of products and providing an alternative currency with incentives for specific behaviors. If you want to see threads worth of people hating on this, search Hacker News for SkipLagged (the site that was sued for finding open jaw flight segments being priced incorrectly by airlines).

Let's say I go into a Walmart, and they have decided to offer a $40 off discount on jeans, but they sell a pair of one of their brands jeans for $30, and the register treats the $10 as a credit. I tell the person at the counter about this, and they tell me "yeah, it's dumb; I just work here". And then I go to the checkout with a massive pile of jeans, and the people at the register at first give me a funny look, but then a wave of realization hits them and they start laughing. And then every day I come in and they have a basket of jeans sitting at the counter waiting for me. And they just don't care. In fact, the way you should model this is "Walmart seriously believes the price of jeans to be -$10", not "we are stealing money from Walmart". Sure, we think they are daft for valuing jeans at -$10, but we even told the people there and no one cared. They helped us do this.

If you want a real world example, Sony sells Playstations at a loss. Some people would buy Playstations, install Linux on them, and then use them as nodes in Beowulf clusters, or as cheap fileservers for their house. Sony does this as an exploit against our buying behavior, making us more willing to put down the initial investment for the game console so we are more likely to buy games later. They then put a ton of DRM on their hardware, require companies who want to distribute software for their platform to pay them a royalty fee, and extract their rent from game developers.

I see why they do this, but I hate it. It means that their entire business model is built in a way that encourages them to do things like sue people who jailbreak their consoles, as their profit is now tied to their ability to get paid for people developing and distributing software. If you ever wonder why Apple is so benign against jailbreakers while Sony sues them to death, it is because Apple has a business model where they make all their money on hardware (the App Store pretty much breaks even), making them only care about what you do with your device after you pay for it due to a combination of a control fetish, a strong aversion to bad PR, and a feeling of responsibility to protect their beginner userbase.

But like, even barring these indirect effects, Sony has incorrectly priced something they have put on the market. They haven't done anything fundamentally different from someone willing to sell stock at a price higher than the market rate. When people here talk about arbitrage, it is because that is exactly what has happened: someone is pricing their product in a way that has encouraged someone to figure out how to extract value from it. Maybe you also hate high frequency traders, but it isn't quite fair to equate them to pick pockets and con artists. If we found out the people selling the stock were doing it at a loss, it makes them dumb, not the high-frequency traders evil.

So while I can't imagine spending time finding these pricing mistakes, much less making all these phone calls and doing all this traveling to take advantage of them, the idea that this guy did is something I am totally fine with: "more power to him", I say. The usual worst case scenario that could come out of this is the "that's why we can't have good things" result of "no more stupidly complex promotional programs" (a similar situation to "no more free BBQ sauce packets"), but again: that would be a good thing, so I am having a difficult time feeling like this was due to someone doing something bad for humanity.

(For my part, I run a marketplace, and I have a strict policy against illogical pricing promotions: I stare at every single discount a developer wants to have me apply to sales made via my platform, and I verify they don't have pricing paradoxes that would lead customers to have to waste their lives trying to figure out how to get the software they want at the cheapest possible price. And I really do consider doing anything else, as is all too typical in the travel industry, kind of scummy :/.)

[wpietri]

If you are ok with "this is why we can't have nice things", fine. Me, I like a world with nice things.

Also, you seem to have a false exclusion there. Many people taken advantage of by scams are dumb, or at least making dumb mistakes. But that does not mean that the scam artists aren't morally bereft. Indeed, I think it's part of what makes them awful.

I also, like you, think that the whole manipulative airline miles system is repugnant. It's another giant waste of humanity's time; if it were banned tomorrow we'd all be better off. But that doesn't make this guy's actions better to me; all the mile-pointers are just playing into it. It reminds me of a Russian expression, "One thief sits atop another thief, using a third thief for a whip."

[saurik]

I don't think your first paragraph is compatible with your last paragraph: I pointed out the "this is why we can't have nice things" argument specifically to note that it doesn't apply here, as this isn't a nice thing... and you agree with me... which means you are actually defending a world with bad things, and are arguing on the side of the actual scam artists: the people behind these systems you have yourself now called "manipulative" and "repugnant". You have chosen to defend an entity that makes money by taking advantage of dumb psychological bugs in humans, a process they do deliberately and opaquely (as if people knew too much it would harm their business), against another entity who was transparent in their dealings. This makes it difficult for me to accept at face value the moral high ground you have taken in this argument you started :(.

As for your paragraph about scam artists not being defined by the people they are calling dumb, I tried to make the key difference very clear, but maybe I wasn't quite direct enough for it to be noticed: if you take the time to report the issue to the other party, if the scam artist actually says "you realize this is a scam, right? I leave from this with all of your money", and the other party still insists they want to perform the transaction and even helps you do it, I don't see how you can believe it is a scam. What makes a scam artist morally bereft is when they lie or hide their cards: AVIS was actively playing along with this scenario.

Put another way, to believe this is a scam would also require thinking almost any transaction anyone makes ever is a scam, as the entire reason people ever buy anything is because the value they assign to the good is at least slightly greater than the value the other person assigned to the good (which is good for everyone as these transactions are generally non-zero sum). I personally try my damndest to make certain that all of the merchants I use on a daily basis make money on me, as I want them to value my patronage, even going or of my way to pay extra for things that they market as "free", so I truly get where you are coming from... it just doesn't apply here, and you haven't yet connected the dots.

To make the picture even more complex, it isn't ever clear who is making money from what other players. AVIS is giving out EuroBonus miles. Maybe EuroBonus really really wants people to have miles and use them, as they get a kick back primarily from airlines for them being spent, and so they have encouraged car rental companies to give out these offers. Maybe the reason that the branch manager found out from their boss that it was OK to do this was because it actually makes money for AVIS. You just don't know here, but thankfully, AVIS clearly is informed enough to make the decision for themselves: they know these schemes have these holes, they know these schemes are designed to manipulate peoples' incentive structures, and they were even informed of this particular instance. The way this guy keeps saying "I told them what I was doing, expected them to stop me, and they cheered me on" is really telling about his ethics here.

Don't get me wrong: I agree scam artists suck, but the "false exclusion" you are trying to pin on me is clearly unfair :(. Like, if we are going to start throwing "rules of argument" stones, you still haven't defined scam in a way that is precise enough to include this person while excluding AVIS, Sony, or someone buying a house. The only definition to date is essentially "net negative to society for the transaction", but you actually have admitted that the entire pricing model of travel is "another giant waste of humanity's time". If you are going to cast such damning aspersions on to people--calling them scam artists, comparing them to pick pockets, and likening them to parasites--it would be good to at least provide some guidance as to what, specifically, they actually did wrong.

[wpietri]

I'm not "defending" Avis here; nor am I attacking this guy. I'm critiquing a behavior.

That an exploiter is exploiting another exploiter does not seem morally better to me. I also think being tactically honest while still attempting to find the precise boundaries of how much he can scam without triggering an immune response is not notably virtuous. Many manipulative people are excellent at telling carefully measured amounts of truth.

The basis of commerce is positive-sum exchanges of value. You create something for me that I value; I give you something you value in return. This guy is intentionally engaging in a negative-sum exchange to fill his pockets. He knows it, which is why he was very careful to trick Avis's system and limit the amount he extracted to a level where Avis was unlikely to bother to stop him. I am perfectly comfortable calling that a scam, and it is definitely parasitic, in that it consumes resources without creating value.

[uxp]

He also had fun, or at least his writeup sounded like he enjoyed his adventure.

Right now I'm remodeling my home. It's laborious, costly, consumes resources that could be spent on building housing for those less fortunate, occupies the time of employees at the home stores I frequent when I ask questions, but I enjoy it. One has a hard time calling it "exploitation", but aren't I exploiting resources that are available to me for personal gain (albeit in a very literal definition)?

[wpietri]

What you do with the resources you control is an interesting question. But the one I'm pointing at here is how you get those resources.

If you read about scam artists from the late 1800s and early 1900s, there was a lot of innovation where people filled their pockets in ways that were perfectly legal but negative sum for the society as a whole. (Joseph "Yellow Kid" Weil's biography is a fun read.) This led to a whole new series of laws, including those relating to wire fraud.

How those innovative scammers spent their ill-gotten gains is a separate question from asking whether the way they filled their pockets was right.

[llamataboot]

Not sure why people are downvoting this comment, even if they disagree with your assessment of the FT poster's behavior, since you were pointing out what the OP was looking for.

I just refer to it as the perilous incentive structure of late capitalism.