Complaints of price gouging on items related to coronavirus prevention are now emerging as sellers try to maximize how much they can make off of panic-stricken customers.
“No one should be allowed to reap a windfall from fear and human suffering,” Democratic Sen. Edward Markey of Massachusetts wrote in a letter to Amazon CEO Jeff Bezos, citing media accounts that a $10 package of Purel brand hand sanitizer bottles was being sold on Amazon for as much as $400 and that a package of 20 surgical masks that routinely sold for $14.99 was for sale for $387.
Reuters reported that on Wednesday, a bottle of the brand was selling for $600.
“Internet-based retailers such as Amazon.com have a particular responsibility to guard against price gouging in current circumstances as consumers — who are finding the shelves of local brick-and-mortar stores bare, and who may wish to avoid venturing into crowded stores and shopping malls — turn to the internet,” Markey wrote.
Amazon said it is on the lookout for sellers taking capitalism a step too far.
“We agree with Senator Markey—there is no place for price gouging on Amazon and that’s why our teams are monitoring our store 24/7 and have already removed tens of thousands of offers for attempted price gouging,” a company representative said, according to The Hill. “We are disappointed that bad actors are attempting to take advantage of this global health crisis and, in addition to removing these offers, we are terminating accounts.”
Complaints have risen to the point where President Donald Trump, in a Saturday news conference, said that the federal coronavirus task force would investigate reports of price gouging.
Many took to Twitter to report or denounce sky-high prices.
I thought Amazon took down price gouging on its site? Hm, a $69.99 normal size bottle of hand sanitizer. Good thing I use soap and water. These people should be jailed, fined, something because out of fear, someone will pay this crazy amount. pic.twitter.com/d9HFawlwTt
— Lori Michael (@LoriMichaelFl) March 5, 2020
Price gouging at its finest pic.twitter.com/6KKVMVOZeh
— Christopher Allen (@CAllenPhotos) March 5, 2020
Shame on Amazon!
— Marcus (@maciel688_ron) March 3, 2020
Some experts said that while governments might try to limit the extent of price gouging, a rise in prices for items that suddenly have value is basic economics.
“Ideally, we would find a mechanism for making sure that those who are likely to be most vulnerable to the crisis such as the elderly and health workers get the available supplies. But laws that prevent prices from rising will not accomplish that goal,” Michael Salinger, an economics professor at Boston University’s Questrom School of Business, said, according to USA Today.
“These higher prices reward suppliers ready to meet that surge in demand either from existing stocks or by quickly ramping up production,” said Michael Giberson, an economics professor at Texas Tech University’s Rawls College of Business.
One commentator said technology also plays a role in price increases, noting that in the world of e-commerce, some algorithms adjust pricing to rise with demand.
“Retailers who practice dynamic pricing need to monitor algorithms to ensure that prices don’t skyrocket,” Kelly Lynch, retail solutions manager at ActiveViam, which provides pricing technology, said, according to Forbes.
Dana Radcliffe, senior lecturer of business ethics at Cornell’s SC Johnson College of Business, said that arguments that hold true in normal times do not in emergencies.
“In emergencies where critical supplies are scarce, the conditions of a ‘free and fair market’ don’t exist — since the buyers don’t have options,” he said.
“They cannot simply buy at lower prices from competing suppliers,” he said. “Rather the sellers are in the position of monopolists who can demand whatever price they want because their customers have no alternatives. It’s such exploitation of fellow citizens’ vulnerability that makes price-gouging unfair — and frankly unpatriotic,” Radcliffe said.
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