42. Peggy Gallagher, Beanie Babies Collecting Pioneer

this is for Keeps a podcast about Collections and connections [Music] [Applause] [Music] I'm David peterkovsky [Music] the Merriam-Webster Dictionary defines the word fad as quote a practice or interest followed for a time with exaggerated Zeal unquote some noteworthy fads of the past include pole sitting a briefly popular and one would assume wildly uncomfortable craze in the 1920s the pet rock craze of 1975 in which rocks were placed in ventilated boxes and successfully marketed as an alternative to animal companionship and the hacky sack a soft kickable bag that despite coming to Market in the 1980s hit its stride among college students Stoners Stone college students and others in the 90s but amazingly the hacky sack wasn't the only soft pellet-filled toy to Mesmerize consumers in the 90s and it wasn't nearly the most profitable that honor goes to the toys at the center of the fad to end all fads at least until it ended and those toys are Beanie Babies 1893 toy manufacturer Tai Incorporated introduced nine new plush toys to the market called Beanie Babies the marketing strategy was unique company founder Ty Warner who was known to be a perfectionist and a bit of a control freak insisted that beanie babies were to be priced at five dollars per unit and they were only to be sold in smaller stores not the big box retailers all in keeping with the idea that the beanies the first cohort of which included legs the Frog Patty the Platypus and Squealer the pig were high quality plush toys not your run-of-the-mill mass Market stuffed animals it was around that time that Peggy Gallagher was introduced to Beanie Babies thanks to her sister a doctor in the Chicago area named Paula benchik cabrinco she found these beanie babies when they first came out she found them in Gift Stores and she showed them to me and I thought they were the cutest things I've ever seen and I've never been really a collector of anything except I fell in love with these little beanie babies and their names and not heart tag and yeah so she's the one that got me hooked let's blame her let's blame her by the way it should be noted here that Peggy's interest in Beanie Babies was purely aesthetic at first and with good reason the posable adorably understuffed buggers are cute they made a big impression on Peggy do you remember the first Beanie Baby You Got yes it was the wingless quackers without the wings that was really a rare one and then over time they added the wings that's what made it rare the original one yes the original one had no wings and then as time went on Ty Warner decided that it looked kind of stupid so he had the little wings on there thing yeah I mean some some rare I amazing do you still have that one yes with a collector's eye Peggy and Paula began collecting the beanies and as it is with a lot of collectors their Obsession grew making them some of the very first passionate collectors to launch what would quickly become a national Beanie Baby craze they ultimately amassed a collection of ten thousand Thai Incorporated toys thousands of Beanie Babies among them but Peggy's original motivation was simply to assemble a complete set of Beanie Babies for her family members I just ended up doing it just to get some ones that were missing and call it she has two daughters and my other sister has two daughters so we were like on a mission to get everybody a collection of these and then it just took off so I think timing and eBay and the mothers trying to get these little Beanie Babies for their kids that's how it became such an addictive habit and a collectible quickly a line of toys designed for children became insanely popular with adult collectors like Peggy and Paula and Peggy's been for Beanie Babies became such an obsession that she developed contacts within the Thai company which also happened to be in the Chicago suburbs amazingly even Thai employees didn't seem prepared to handle the rising interest in beanie babies from completists like Peggy so were you trying from the beginning to get all of them [Music] Annie Nichols who was one of the original employees for Ty Warner and she was giving me information but they didn't really know too much I mean they didn't really know a lot of things that the collectors ended up knowing because everybody was on a hunt to find these they had no list of which beanie babies were available they had no retirement dates yeah it was not a very organized operation the lack of clear information sparked a frenzy among collectors and it gave birth to a surprisingly robust secondary or resale market for the toys Peggy had worked for a time in the financial World which helped her keep track of pricing and Trends and since this was the mid-1990s when the internet was still new and e-commerce was barely a thing Peggy and a growing number of Beanie collectors did what most people did in the mid 90s they logged on to America Online welcome You've Got Mail I traded commodities for a short time so there were a lot of skills there that I had picked up I didn't plan on becoming a dealer of Beanie Babies you know for the secondary Market it just happened by mistake so we had the America Online boards that were a good trading place and then of course eBay had just entered the world so then people were able to buy and sell on eBay and they were all geared towards trying to find these missing Beanie Babies that nobody could find some of the very original ones as other collectors became similarly fixated on the toys the resale value of beanies shot through the roof thanks to Ty's clever Ploy of changing up little details about the plush toys from time to time that would explain the desirability of say the royal blue Peanut the Elephant not to be confused with the dark blue Peanut the Elephant that came out later when Ty Warner decided he didn't like the royal blue color on the original when Warner wasn't altering the existing toys he was retiring certain beanies altogether their scarcity not only driving up demand for the retiring toys in retail stores but also fueling a rise in the secondary Market resale prices thanks to Peggy Paula and the growing number of passionate collectors not to mention lots of overseas calls and Peggy's legwork in tracking Prices Thai Incorporated reported earnings of more than one billion dollars in 1998 the speculative Beanie Baby bubble was getting bigger and bigger we started really big [Music] and then that's how we started getting like tremendous amounts being shipped in because we were able to sell onto other dealers and the profit was so incredible then we started having trade shows well actually Paul and I did the first Beanie Baby trade show at a VFW hall in Park Ridge Illinois and there were so many people it was amazing and at all the advertising was just through the America Online Trading boards for the people that had their emails through America online and it just really was absolutely amazing amazing I want to switch gears and talk specifics here which beanies were or are your favorites I mean did you ever own a coveted royal blue Peanut the Elephant for instance oh yes one I mean I was on a mission there was nothing that was going to stop me yes the royal blue peanut that's a very rare Beanie Baby and um the spot the dog without the spot because that was one of the originals and the Spotless dog that was the original nine so that was one of the very first ones that Ty Warner had created those are the original nine beanie babies and spot the dog was one of them yeah I have so many favorite you know I liked all the colored Bears and the teddy bears are adorable but I really I've liked all of them if it's true that happiness comes from doing what you love Peggy must have been loving life at this point and for her collecting Beanie Babies became even more of a friends and family affair once the craze kicked in my mother had a winter home in Arizona and Paul and I said go get gray happy the hippo anywhere you can find it in the gift shops because they weren't popular out there here and the craze started moving around because of all of us calling gift shops you know then the store collectors realized who are all these people calling for these Beanie Babies that is how the marketing happened it happened by mistake and by people calling and then the people in the Chicago area saying ship them to me here's the credit card number and uh you know like my mother she was in Arizona they didn't even know about him and she got trapped the miles like 50 of them 60 of them she said I'm running out of room I have to fly home I could ship them home just ship them we need them so uh and then we were doing it to help our friends because they couldn't find them so it happened by accident totally by accident you know that's just the way it works if you have a love for something and then you find a need because people couldn't find them like Paula and I could or the Becky's we just explained we're gonna get them for you people and that's exactly what happened you're a beanie broker Yes actually I was and it happened absolutely innocently Peggy's diligent Grassroots research on the secondary Market not only made her Stand Out Among beanie collectors it was extremely helpful to the beanie collecting Community including another high-profile pair of Illinois collectors slash resellers known as the Becky's I want to talk a little bit about how you track the pricing and secondary market value for beanies back then what was your process like and I think you were the first one to do it is that right yes there was a store in Glenview Illinois and the man that owned the store with his wife he had a collection of Beanie Babies because he was a Thai account but he had some of the older ones that he had gotten from the tag company and he was collecting these and he actually had the very first list and the name of the store was the cat's meow he had the first list and then we would Paul and I and and he and his wife once we discovered more of them that were out there like in Germany or England land or Canada we realized oh my God look at this version and that's how this whole crazy thing started with all these variations he was the first list and I started producing the list because I knew the prices because of what they were paying me and they were paying Paula and then these other people that we were having them distribute them and sell for us Kathy Anderson she owned a store and she would pay me like 200 for some of the rare ones Slither of the snake and then she would sell them so I would say well how much did you get for that and then the Becky's they would come and buy them from me for 200 a piece then they were selling them out there so that's how I knew the pricing it you know no one's bigger than a market it's just the market is the one that's setting the price and that's no different with commodities or the stock market or a collectible you can actually track and organize and write down the prices and what they're being sold for and resold for so um yeah that's the way it started then I started publishing a book and then then we had a website actually I still am operating that stupid website you know where it wasn't easy like today I mean you had to know a tml and I mean we had to be like Geniuses to get this website to work just an incredible life an experience that people just would never believe between Peggy's book and her tireless efforts to acquire and resell Beanie Babies she reportedly netted two hundred thousand dollars by early 1997. she was able to flip beanies she'd bought in Germany for about seven dollars U.S at four figure prices and she kept at it Peggy's passion for Beanie Babies helped her track not only the prices but which beanies were retiring or had been changed creating valuable variations from a corporate perspective the retirements kind of drove all this stuff and that wasn't part of the plan right you know like the tie-dye Lizzy the original one was a tie dye and then the more current one that was released had you know like blue and it looked more like the lizard but if you look at the amounts of the original one the original ones are rare well you got all these collectors that wants the original ones so you're trying to help your collecting friends but in the meantime you're like creating such a phenomenal Marketplace but it was all done innocently [Music] so which ones in your collection prove to be the most valuable well there's the one [Music] the one piece he only produced like maybe 365 or you know the numbers change with each year those are rare and uh some of the ones that he designed uh they were specialty beanies those are rare um but especially the ones that he had numbered and signed are the ones that are still very very rare because the production is so low on those do you mind my asking what's the most you've ever gotten in a sale for one so I got an A sale of any Beanie Baby uh no but I remember paying like 2500 for the wingless quackers actually my husband bought it from me for my birthday and he paid somebody two thousand five hundred dollars for it and that wasn't that wasn't the highest prices out there um I basically sold them for around 200 and they were going to other dealers you know then I started authenticating them well you know there's a kind of a conflict with that so I wasn't making the big big bucks that other people were making however when I was getting that many of them out of Germany and I'm paying ten dollars for them and I'm turning around and selling them for 200 you know that's quite a markup the markups were great but it's not as though Peggy didn't incur significant costs Gathering all of the information on beanie availability and pricing remember this was the mid 90s when speaking with people long distance not to mention overseas required costly telephone call our telephone just went to the currency exchange to pay the bill I thought if you see that I've been calling all over the country looking for these Beanie Babies he's going to divorce me because the phone bills were out of control and I know you kept it a secret from for a while when did you finally Loop them in um he got involved because I'm I'm contacting Germany and he was a lover of the Porsche and he was actually the president of the Porsche Club several times so when he was saying that I'm talking to all these people from Germany and we're talking about a toy you know he's saying what are you talking about and I go you know those little Beanie Babies that Paula showed me at the hospital he goes yeah like well they have them in Germany and he said so I go yeah but they're retired here you know he kind of thought I was kind of crazy and then he got hooked on it when he saw these big boxes coming their home and he says what are you gonna do with all these and I go I'm selling them the dealers need them to give to their customers and then he says you mean you're paying this and you're selling for 200 bucks and I go yeah he goes the profit margin I go I know but I didn't want to tell him about the telephone bills because you know we still had call to keep getting them we had huge telephone bills you know now you're like this is like an addiction you know and I do get obsessed about things you know I'm one of those that um if there's a mountain to be climbed I will climb it and reach my goal I never give up so I thought Dad I'm gonna like relax but it was hard to relax when Beanie Babies kept coming out including one special beanie with a lot of variations that honored a fallen British icon was it difficult for you to score the Princess Diana bear no then I'm out a little bit later and I'm sure Ty maybe was doing that for marketing purposes because that was such a tragedy and the prince is there right now it's such a hot item because there's little variations in that I mean the little rose on the chest some of them have like the whiter thread and the stem there's like two shades of green stems that are on there so there's little variations and then the ones that are the rarest are the ones that were made in Indonesia and they're very rare because the numbers are so low so right now that's a hot Beanie Baby because people do have access to it but all the little variations are what just sends it the tags are a little bit different and anything that's a little bit different is what spirals out with the prices because people are finding them and they go oh yeah my stem is a different color and the ribbons are a little bit different in the shade so any Beanie Baby where the colors have changed through the time like hippity and happy these little bunnies some of the ribbons have faded well those like they've turned like from a green to a yellow and that sends the collector's absolutely out of their minds perhaps not surprisingly the surge in popularity for Beanie Babies led to an inevitable byproduct fake Beanie Babies which were often bought and sold without collectors even realizing they had them and because Peggy knew as much about the toys as just about anyone on the planet and knew a good opportunity when she saw one she launched the world's first Beanie Baby authentication business I was really so busy at that point authenticating them because they were coming into me from all over the world you know these counterfeits and they were being manufactured in China but they were on the in the Beijing Marketplace they were being stolen from the Time Warner manufacturing companies out there people that were traveling to say said I got him in China I go yeah but they don't distribute them they're they are manufactured there but you're buying counterfeit see I got really involved with the counterfeit end of it because it was like they were infiltrating the whole Marketplace and these innocent collectors are spending two and three and four thousand dollars for a beanie baby that is an absolute counterfeit tag for counterfeit the beanie baby was counterfeit the fabric is counterfeit then I got out of the dealership and because I had already gotten the very original ones and the current ones that were being released you know I could just run to a Hallmark store and get them then I got so involved in the counterfeit end of it so one part of me was The Collector and then the other person became like you know to help the collectors so they didn't end up spending all of this money on a counterfeit Beanie Baby to this day you're still doing authentication work yes I'm still doing it the last number of a beanie baby that I authenticated was July 30th and the number I'm on is one hundred and twenty thousand and twenty nine I have authenticated that many Beanie Babies that's a lot it sounds like it so that people mail them to you you authenticate them and then mail them back with the counterfeit tag and then I explained to them in an email what is counterfeit about them because a lot of people that are selling the counterfeits now they don't even realize they're counterfeit you know I can tell them the Thai heart tag he had this kind of font I can tell by the fabric and the way it was sewn together and like the eyes and all the detailed part and the thread and then they can get their money back along her Beanie Baby Journey Peggy has met quite a few characters Chief among them is Thai incorporated's founder and Beanie Baby Visionary Ty Warner who was known for suing just about anyone whom he felt was infringing on his beanie baby trademark but for whatever reason Warner seemed uncharacteristically sympathetic to Peggy I want to ask you a little bit about Mr Warner do you ever have any interactions with him I was in a restaurant with him a little coffee shop about two blocks away from his company I was meeting Ann Nichols and a couple of employees there for lunch he walked in and he sat down at the table and he's a very shy man so I acted like I didn't even know who he was because you know I had one of these real bubbly personalities and I didn't want to scare the man and um when he left everybody said you know who that was and I go yeah it was Ty Warner and they go how did you stay so quiet usually people scream and carry I said because I know he's shy I didn't want to scare him so I've always been very careful to protect his personality because he is very shy so he never um hit you with a lawsuit about your authentication business or anything like that or hey you're you know impinging on my territory nothing like that no and I was one of the luckiest people because he has never threatened me I mean I've published books I've been authenticating beanie babies all these years and I actually knew all of his lawyers because I was like an expert witness for the Thai company with the counterfeit Beanie Babies so I was very involved with his law firm and then he also had me on his website it was called Thai trade and uh he actually allowed me to authenticate Beanie Babies on his website so the man has never ever had the lawyers threaten me in any way he obviously knows who I am because I'm out there writing a book in 1996 and nobody even knew you know anything about beanie babies and I published a book and I sent him the copies for some reason he has always just left me alone and never threatened me in any way And Then There Were The Fad Chasers looking to make a quick Buck the beanie come lately says I like to call them one such opportunist was Les Fox who was hastily working to produce a Beanie Baby buyer's guide only he needed actual Beanie Babies to photograph for his book is it true that you sold him a bunch of Beanie Babies at a rather high price that you kind of made up off the top of your head and you just went for it no questions asked yeah I did I was writing a book then I came out with little price guides and here he comes and he's like he comes out of nowhere and I go damn I can't let you just walked all over me because he needed the actual Beanie Baby to photograph because you know you can't steal pictures so I thought well I got all these beanie babies and so did Kathy Anderson she's the one that owns a little toy store of Maggie's Toy Box in this place I go Maggie you gotta sell less box charge him a lot of money because starting to write books and he's not like one of the pioneers and um yeah a tremendous amount but he paid every dime and I explained to him a lot about Beanie Babies yeah I've kept in touch with him for years yeah I did I charged him tremendous amounts of money she was a professional publisher and you know here I am just like the little monster thing you know at my kitchen table writing this book and just to make my very first little book because it was all color I actually took it to designers that worked for America online and they charged me fifty dollars a page well that was a lot of money so every time people say well you made so much I said yeah I made a lot of money but you should see the money I put out I mean as soon as I made money then I decided to publish a book well to publish a book back in that day that's all color it was a fortune a fortune so I I said yeah I did make a fortune but you should see the money I spent I wrote the book to try to educate people because I had the pictures of the very rare ones I didn't do it in a business sense to make money it just it happened that way you know I was just fulfilling a dream of mine to get every one of them well you put in a lot of Blood Sweat and beans oh God did I ever for the most part Peggy looks back on the Beanie Baby Heyday as a positive time and it was a time that benefited her family in one rather unexpected way is it true that your sister Paula made enough money from her sales in the secondary Market to finance the adoption of her daughter yes it costs over forty thousand dollars between the in vitro and everything it did she sold Beanie Babies to pay for that that was her goal and it is the truth because I tried to get a loan from the Harris bank and they go what do you need the money for I said my sister is trying to adopt the baby and the little baby is in Guatemala waiting for my sister you know they said oh we can't loan you the money for that so I told Paula you got all those Beanie Babies to save one collection and start selling them I go because these are hot and so anybody that needed like a Peanut the Elephant she was on the America Online boards too so yes she did she was going to medical school you know people think everybody just has all this money but you know everybody's got to earn the money to be able to handle life and we just sent our goals supplies that we just have to work a little harder foreign things in the beanie World began to shift demand LED Thai to produce more and more Beanie Babies over producing them When Ty Warner announced the retirement of several beanies in 1999 the anticipated rise in secondary market prices didn't happen speculation was replaced by stagnation while the rise of eBay had made it easier than ever for collectors to locate competitively priced beanies on the secondary Market soon those prices began to fall and by the early 2000s almost as quickly as they had become a collecting fad the beanie baby bubble head Burst when the beanie Bubble Burst how did you and your sister feel about things I mean were you surprised no I wasn't because they've had the Cabbage Patch Kids and little troll dolls and my brothers used to collect baseball cards so I realized it with Collectibles you know they're only popular for a certain amount of time and then they usually do all fizzle I wasn't surprised I just thought the way it was done it was a little confusing but that was because Ty Warner had his own website by this time he became a multi-billionaire and he had all kinds of employees in there trying to direct him the right way to do things but some of these employees did not understand the Beanie Baby Market they may have been highly educated and had fancy titles but they did not understand the collectible mentality which is totally different than anybody in a regular career so I think Kai Warner listened to them too much because he had a you know massive amounts of money and I think it hurt him a little bit it was a shock but it didn't bother me because I was doing it for a different reason I didn't depend on the money I did it more as fun you know as a hobby Paula still got him in like boxes oh my God I said Paula you got to sell these you should see these prices and she's stubborn and she wouldn't sell a lot of them so she still got some of the rare rare rarest ones and uh she won't let go of them she's like you she's just a fan she's just a fan she is she's the one that got me hooked on this stupid thing did his encompassed my life it has but I still love them so much I think they are just the cutest things today when she's not working as a special ed teacher in the Chicago suburbs Peggy Gallagher still authenticates Beanie Babies by mail she's even got a franchise of her business in Japan and she says it's still thriving so even though the dollar values haven't stayed anywhere near those late 90s unsustainable levels the original Beanie Babies are still in demand among Die Hard collectors and now younger Generations according to Peggy are discovering the toys through their parents and grandparents so one last question for you do you think there could ever be a scenario where there is a full-on return to the collecting Madness well I think it is starting up with these grandkids you know with some of these later ones that came out in 95 96. these young kids are really into this now because they're going through their grandparents collections is what they're doing and then they get hooked on it so I tell them go get this book and you're going to see every variation and you're going to see watch the prices on eBay because you're going to see the prices so I think there is a little bit of a collectibility craze going on with these grandchildren is desires that sounds I would know because I see what's being sent to me and I'm reading the emails and these are grandchildren of the people from my era so talk about feeling old all the time I go oh my God these are black branches well that's everything I've got Peggy I want to thank you for going down Beanie Baby Memory Lane with me I appreciate it well I appreciate meeting you and maybe we can hook up sometime have dinner and uh I'll bring you some of the rare Beanie Babies yes that would be a treat okay thanks a lot okay thanks Peggy okay bye-bye bye-bye [Music] it seems as though all along Peggy Gallagher has had the right attitude when it comes to Beanie Babies Buy Low sell High authenticate often and even though she looks back on the beanie baby bubble with a mixture of fondness amazement and even disbelief she still easily recalls what sparked her interest in the first place the cuteness of the toys that's what got Peggy involved and that appreciation at least in her case will always transcend spreadsheets buyer's guides and Bubbles for Keeps is a production of me David peterkovsky thanks to Peggy Gallagher for filling me in on her adventures before and after the Beanie Babies Bubble at for keepspodcast.com you can see a photo of Peggy with some of her collection also in the show notes there's a link to the book The Great Beanie Baby bubble by Zach bissonnette which is a fun and informative read all about the beanie craze the book provided me with a lot of Beanie background and Peggy gets plenty of ink in there the Show's theme song is by the band still flying and the closing theme is by Eric Frisch additional music for this episode was provided by Chad Crouch you can visit the Show online at for keepspodcast.com or follow for Keeps on Facebook Instagram and Twitter at for Keeps podcast and if you have an idea for a future show or any sort of feedback feel free to 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