Beanie Babies became one of the best-selling toys of the 1990s. Photograph by David Kamerman.

First introduced by toy company Ty, Inc., in 1993, Beanie Babies soon became one of the biggest-selling toys of the 1990s. Small stuffed animals with beanbag bottoms, each Beanie Baby comes with a heart-shaped tag containing the animal's name (Legs the frog, Flitter the butterfly, Chocolate the moose) and a short poem. Popular with children, the toys were soon in demand among adults who often collected them because their value was rising. Stores could not keep Beanie Babies in stock. Customers lined up outside to wait when new shipments of the toys were due.

In 1996, almost a hundred million Beanie Babies were sold. Many collectors own dozens, trying to collect all 264 different animals. Collectors paid up to $13,000 for rare Beanies, though the retail price ranged from $5 to $7.

In what many thought was...