The Washington PostDemocracy Dies in Darkness

‘Collectibles versus commodities’: As Target halts sales of trading cards, collectors reckon with fast-changing hobby

The retailer is pulling cards ‘out of an abundance of caution’ after a parking lot dispute in Wisconsin turned violent

The pandemic has caused a surge of interest in trading cards, and Target announced Thursday it will no longer sell the cards in its stores. (Jay Paul/Bloomberg News)
Placeholder while article actions load

Target says it’s done with trading cards — at least for the time being — after a dispute outside one of its Milwaukee-area stores escalated into violence and multiple arrests.

A spokesman for the retail giant said in a statement that it will stop selling MLB, NFL, NBA and Pokémon cards in stores on Friday “out of an abundance of caution,” but that they’ll still be available online.

The company declined further comment.

The baseball card industry — a blanket term for all trading cards, including popular game and collection brands Pokémon and Yu-Gi-Oh — has exploded during the pandemic, according to aficionados, as people reengage with old habits, and many face financial pressures. “Grading” companies, or firms that appraise a card’s value, have been inundated with submissions from new and existing collectors resulting in backlogs of millions of items.

Demand at retail establishments, especially big-box stores, has swelled, collectors say, as enterprising card “flippers” descend on stores, purchase their inventories and resell them at sometimes four or five times their retail price online, where “The Hobby,” as collectors affectionately call it, has been sequestered during the coronavirus crisis.

But collectors say it was getting harder to come by new cards at big-box stores even before the pandemic because flippers are notorious for scouting out stores’ restocking schedules and parking themselves in front of store entrances early in the morning to buy up inventories.

Baseball card collectors suspected rampant fraud in their hobby. Now the FBI is investigating.

It has led to a surge in valuations for cards of all types, with some Pokémon cards quadrupling in value in the past year. One collector told The Washington Post he has sold baseball cards in recent months once worth $50 each for upward of $500. It’s also ignited fierce competition between flippers angling for “hits,” or the most valuable cards.

The new entrants have divided the hobby squarely into two camps: Traditionalists who buy and sell cards as a pastime; and new-school collectors who trade cards as they would investments, looking to short the market and take advantage of the space’s volatility. The trend has repeated itself in other collectible markets through the pandemic, including comic books, coins and stamps.

“It’s collectibles versus commodities. That’s what we’re facing right now,” said one collector, who goes by the name Kyle and runs the “Wax Museum” basketball card podcast. Like many collectors, he prefers to shield his identity to avoid online harassment from other collectors. “That’s been the new wave during the pandemic. There’s a lot of nostalgia with cards, but people see the sales. They think they like the cards — maybe they have a past connection to them — but they really see the money. It’s more interesting than the stock market,” he said.

“It’s probably easier to project a player that’s going to get better than analyze tech start-ups.”

Even sports cards from the 1980s through early 1990s — called the “junk wax era” of cards because manufacturers oversaturated the market, leaving the items virtually worthless — have found a new audience.

The rise in demand, and values, have fed vicious growth in the industry. Serial New York investor Nat Turner and New York Mets owner Steve Cohen purchased Collectors Universe, which runs the industry’s largest grading company, for $700 million in November and took the company private. In March, the company PSA doubled its prices for grading submissions.

SGC, another major grading firm, tripled its prices in April to keep from being overwhelmed with submissions, the company’s president, Peter Steinberg, said in an interview. The company lowered its prices again on Sunday.

“In traditional industries, the hard part is getting customers to want to try your service,” Steinberg said. “This is a very unique time in this industry because it’s actually more difficult to hold the cards back than it is to take them in.”

The surge in interest has renewed connoisseurs’ concerns about fraud, which is rampant in the hobby. New collectors make for easy marks for so-called doctors, who illicitly alter cards to improve their appearance and resubmit them to grading companies in hopes of higher appraisals. Rising prices have only increased incentives for such activity, and doctoring scandals within the hobby have led to high-profile prosecutions and federal criminal investigations.

The card-collecting community is generally self-policing and reliant on retail establishments, grading companies, cards shows and e-commerce to all run efficiently to keep supply and demand stable, and out suspected doctors. But with so many new hobbyists and new industry entrants intent on flipping cards for quick profits, many of the industry’s traditional gatekeepers have been sidelined.

The incident at Target — though what specifically set off the altercation or what type of cards were involved are unclear — raises new concerns, collectors say, that parts of the hobby could spin out of control.

According to a report on May 7 in the Milwaukee Journal Sentinel, a disagreement over trading cards led to a parking lot scuffle. The 35-year-old victim, who had a permit to carry a concealed firearm, brandished his weapon but did not fire, the report said. Four men were later arrested on battery and other charges, police said.

The case was referred to the Waukesha County district attorney’s office, which did not respond Thursday to a request for comment.

“I think it’s gone past the point where some of the collectors and more experienced people can police it,” Kyle, from the “Wax Museum” podcast, said.

PSA announced in April that it would not accept new grading submissions until it sorted through its backlog, which president Steve Sloan said it expected to complete by the end of May. Earlier this month, it also purchased software company Genamint, which uses artificial intelligence to grade cards and assign each a “card fingerprint,” which hobbyists hope will be a deterrent to illicit alterations.

“The sheer volume of orders that PSA received in early March has fundamentally changed our ability to service the hobby,” Sloan wrote to customers in April. “The reality is that we recently received more cards in three days than we did during the previous three months. Even after the surge, submissions continue at never-before-seen levels.”