Where is the scam in a "giveaway" in Oxford Circus, London?

Question

This weekend I was walking around Oxford Circus with a friend when we saw a guy with a microphone on a stage giving stuff away almost for free to people inside an open store with no goods and big "clearance" signs.

Just to clarify, this wasn't an auction.

He'd start grabbing items like a brand new power bank, a digital camera and AirPods, and offer them for £5. People would raise their hands and he'd give them to someone. He'd show the products were closed in their "original" box and that they worked (or at least he did that with a Bluetooth speaker). Then he asked people if they'd be willing to trust him by offering £1 and he'd decide what he'd giveaway. People, again, raised their hands, he chose someone and then started adding a camera, an iPhone 7, a phone holder, headphones, put them in a plastic bag and handed it to the "winning" woman.

After a couple of minutes, we decided to leave, since it didn't seem legit. Following common sense, people don't give free stuff to strangers, and 99.9% of the time you have to ask "Is this a scam?" the answer is "yes". However, I'm struggling to understand where the trick is here.

My guesses:

• What he was "selling" was either stolen or malfunctioning.
• He'd give these things for peanuts to associates, and as time progressed, he'd then start auctioning items at higher prices, making people feel they'd need to leave with something.
• He was keeping people busy while something else happened.

A few details that caught my attention or that confused me even more:

• If you sell stolen or malfunctioning goods, you don't do it openly in front of tens of people.
• If you sell stolen or malfunctioning goods, you don't do it off a store in Oxford Circus.
• If you want to get rid of genuine products, you can sell them at 50% of their RRP and people would still buy them straight-away. There's no need to "sell" an iPhone 7 for £3.
• He put the items in a black plastic bag when handing them to the winners.
• He asked the audience a couple of times to get closer to him and together.

I'm curious to understand where's the catch and how it works.

Answer 1

It sounds like a mock auction. The sale starts with the auctioneer selling genuinely high value goods at knock-down prices to "customers" who are really staff working for the auctioneer. This gives the other customers the impression that there are real bargains to be had. However, the remaining items are likely to be poor quality or fake. The customers don't realize what they have been sold until they leave the premises and open the bag they have been handed.

Answer 2

I see nothing in your question to prevent him selling complete fakes or even empty boxes to unwitting customers. Getting caught would take time. But it's also possible he's seemingly selling good stuff to associates while the real customers only get to buy overpriced (likely fake branded) accessories.

Rents for "pop-up" shops can be very low as they reset the clock on business rates (property tax) relief for empty premises, which otherwise the landlord would have to pay so the fact he got access to the shop doesn't say much. At this time of year the temporary Christmas shops will just be shutting down, so it might be easy to get even a day or two of use.

Answer 3

I am absolutely ashamed to admit this. I was there for the one on January 9th. I stayed for the entire thing. And I actually participated.

The first guy was taken over by a Middle Eastern guy named Tony.

I didn't realize there were plants in the audience. Can you describe them? One guy at mine spent hundreds of pounds on every piece of crap. He was Israeli, he had two kids with him (teens) and his name was Yossi. I feel so horribly for him. His wife probably murdered him. Literally.

I don't know why I fell for this. I really believed at points that we would get cool stuff. I also thought it was just a show and they weren't really going to take our money. If some of these people that spent so much were actually plants, they were fucking good at it.

So anyway, at one point I offered up 40 pounds for a "lot" and it was given back to me. I noticed how some people offered a large amount, he took it and then gave it back. Those could be the plants! To make us think that and put the idea in our heads. Fuck, I'm stupid. I'd also like to note that the main players were foreign people of colour. I was being completely ignored in the beginning and I think I now know why. He thought I was from London. I'm a white guy so he probably didn't suspect I was foreign. He eventually spoke to me and acknowledged me when I was close to the front. I told him where I was from and from that point on he would acknowledge me. Fuck fuck I'm so stupid.

So anyway, there came a point where I stopped giving money. I had finally opened the gift bag I had paid for. It was a black garbage bag filled with different ear phones. Cheap old ear phones, a power bank, small Bluetooth speaker, batteries, all the crap he probably gave away to his plants at the beginning. I was holding bags and boxes of genuine crap. I had given him 100 pounds and not been given a single decent item. The final "gift from him" was wrapped up at least two or three times and in a bag so opening it would take time and I saw them walking around telling people not to peek. When I saw it was just more perfume, that's where I finally realized my mistake.

He finished it up. He really rushed towards the end. They started making everyone leave. I just stood there. Dumbfounded. I couldn’t just leave this and accept it. I went up to one of the staff members and politely said that I didn’t want any of it and that I’d like my money back. They told me there’s no refunds, it’s over, leave. I refused. I kept saying I don’t want it, I want my money back and I stopped being so polite. They were being such assholes. More people came to me and just tried to get me to leave. Tony then came to see what was happening and he told me to fuck off. I got really scared. What if they got violent with me? I still just couldn’t leave it. So I decided to fake a panic attack. I then think I really started to have one. I was honestly faking it in the beginning because I thought that if I appeared to perhaps be “mentally upset” about losing my money, maybe they wouldn’t hurt me and would be more likely to just give me my money back because I was losing it. Also I hoped they would just give it back because they would think that it really was the only way to make me leave.

At first they were offering to give me back 20 pounds, then 40 pounds, but I insisted I need it all back because it’s all the money I have for my trip. Which was basically true. I started crying, I was actually getting very emotional and hyperventilating. So many people appeared from behind the curtain in the back to see what was going on. Men and women. Then the guy who would collect money from people came up to me and gave me my money back. All of it. He pointed me in the direction of the door. One guy said pull yourself together and don’t let Oxford Street see you like this. I said okay, genuinely thanked them for giving it back, I couldn’t believe it. And then I left. And walked away. I am still so upset about this. He stole so much money from people. No one else except me got my money back. And they will continue to do this.

It’s also worth noting that the main items he offered to people were a PS4, PS4 VR, Nintendo Switch, Acer Laptop, iPad Air, Samsung S8 and iPhone 7’s amongst others. None of that stuff was ever given to anyone. I suspect those boxes are actually all empty. Except the phones. They kept showing that the phones were in there. To give you an example of the slimy way they perform this show, at one point Tony kept saying there would be an iPhone XR and when he tried showing it to everyone after the guy with him behind the counter handed it to him, he pointed out how the box was for an iPhone 7. The person behind the counter who handed it to him said the XR is inside. And so it was. Or was it?

I just can’t get over this. I’m so happy that I decided to Google it again and find this post so I could tell you all this. Please can we get these people arrested?

Answer 4

Besides a straightforward mock auction, another possibility is a "Jam Auction":

In this scam, the confidence artist poses as a retail sales promoter, representing a manufacturer, distributor, or set of stores. The scam requires assistants to manage the purchases and money exchanges while the pitchman keeps the energy level up. Passersby are enticed to gather and listen to a pitchman standing near a mass of appealing products. The trickster entices by referring to the high-end products, but claims to be following rules that he must start with smaller items. The small items are described, and 'sold' for a token dollar amount – with as many audience participants as are interested each receiving an item. The pitchman makes an emotional appeal such as saying "Raise your hand if you're happy with your purchase", and when hands are raised, directs his associates to return everyone's money (they keep the product). This exchange is repeated with items of increasing value to establish the expectation of a pattern. Eventually, the pattern terminates by ending the 'auction' without reaching the high-value items, and stopping midway through a phase where the trickster retains the collected money from that round of purchases. Marks feel vaguely dissatisfied, but have goods in their possession, and the uplifting feeling of having demonstrated their own happiness several times. The marks do not realize that the total value of goods received is significantly less than the price paid in the final round. Auction/refund rounds may be interspersed with sales rounds that are not refunded, keeping marks off-balance and hopeful that the next round will refund. The Jam Auction has its roots in carny culture.

(source: Wikipedia; emphasis added where applicable)

This would only apply if part of the routine was asking audience members if they were satisfied, or if the announcer returned their money at any point.

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Edit: Based on another answer to this same question by user George, who reports seeing the same auction format in the same place a few days later, it appears that this was indeed the scam:

So anyway, at one point I offered up 40 pounds for a "lot" and it was given back to me. I noticed how some people offered a large amount, he took it and then gave it back. Those could be the plants!

Answer 5

Since you didn't stick around it's hard to say - some of the other answers have given possible scams that could have been run.

I would like to offer another possibility that might not be a scam - at least, not in the sense that you are thinking. I was at a carnival / fair like event many years ago, and a man was standing in front of a crowd of people doing a similar sort of demonstration. However, instead of offering goods for sale, he was asking for a volunteer to give him a small amount of money in exchange for what he promised would be a good return. He got an agreeable gentleman and asked them for some amount, I don't recall how much as it was many years ago, but it might have been $1 or $5, but he eventually talked them into giving him a $10 bill in exchange for whatever thing he claimed was of larger value in a box or something he had on stage. When the box was open, it turned out to be a real $100 bill. He might have repeated this offer, I don't recall, but it turned out that the whole display was a kind of advertising gimmick to attract people's attention from other things that were going on as this was a large main street with many attractions, other people selling wares, etc. In addition, he was trying to get the crowd excited and enthusiastic to watch whatever presentation he was about to give next. I was only a kid at the time so I don't recall exactly what it was, but it was some kind of sales pitch, probably legitimate as the whole thing was set up and regulated by the city, so everyone selling or otherwise participating had to pay fees, register their name and what they were selling or otherwise do there, etc. and thus any illegal activity would undoubted produce some complaints which would be tracked down and investigated and the appropriate actions taken.

So it's entirely possible that a similar thing was going on here - a person with a very "showman" type personality was working the crowd to get them excited and interested in whatever he was about to present. Now whatever that was could be considered a borderline scam - for instance, he might be trying to sell some MLM scheme, or timeshares, recruiting for Pseudosciencology, or some other high priced/margin item for which a couple hundred or even close to a thousand dollars worth of merchandise would easily pay for itself with just a few sales. Of course, it could also be the case that the actual value of those goods is at the low end of that range. How much does a used iPhone 7 go for these days?