The U.S. surgeon general warned people to “stop buying masks” to prevent catching the coronavirus. USA TODAY
Would you pay $ for a two-pack of – ounce bottles of Purell? How about a single container of Clorox wipes for $ , plus $ shipping?
As the coronavirus spreads and people rush to protect themselves and their families from getting sick, the US is seeing heavy demand for everything from masks to hand sanitizer.
Shoppers scouring the internet and Main Street for these critical supplies say they are being hit with eye-popping prices. Shipping costs have also skyrocketed, with one shopper being quoted $ for ground and $ 5, 0 for next-day air.
Third-party sellers who stock the vast virtual shelves of Amazon.com, Walmart and eBay seem to be testing what the market will bear. And social media has been flooded with complaints. Even California Gov. Gavin Newsom joined the chorus Tuesday: “Seriously, @amazon? These prices are absurd.”
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Coronavirus fears empty store shelves as shoppers stock up Amazon.com said Monday it is cracking down, removing or blocking more than 1 million products on its platform for price gouging and misleading claims related to the outbreak. Amazon says it is also taking action on accounts that violate its policies, including suspending or removing selling privileges.
eBay reminded sellers on Friday not to include health claims in listings. Words including “Coronavirus,” “Covid – , ““ Virus, ”and“ epidemic ”were prohibited as well as“ listings that attempt to profit from tragedies and disasters ”and have inflated prices over market value. The company told USA TODAY it is closely monitoring the situation. Coronavirus price gouging: ‘Somebody is really profiteering out there’
Over the weekend, Jack Arnest, 95, was hunting for N 250 masks when he spotted an eBay listing for three boxes for $ 67. But when he got his order confirmation, he noticed he was only getting three masks.
He speed-dialed eBay and demanded the order be canceled, but wondered how many shoppers were being misled by the photograph in the listing showing an individual mask leaning up against a box of 29. no return policy so if had not canceled right away, I would have been stuck and it pissed me off. That’s a guy taking advantage of the fact that everyone’s panicking out there and most people are rushing to get something that is going fast and don’t read the fine print, “said Arnest, a retired project manager and engineer in the construction industry from Honolulu . “There is no way that a box of masks should cost $ 500. That was a pretty clear-cut instance of gouging. Somebody is really profiteering out there. ”
Dr. Wendy Lu, a dentist in Cupertino, California, says she orders masks or 62 boxes at a time to protect herself and her staff during examinations and procedures. When her January order was suddenly canceled, she was to ld to place the order again. When she did, the price had gone up fivefold.
Lu says she switched to another vendor, but all vendors are now limiting how many boxes of face masks dentists can order. First it was five a week, now it’s two. Some vendors have run out of stock. “It’s annoying, but there is not much we can do,” says Lu, . “It’s supply and demand.”
What may seem like mercenary or predatory pricing to some consumers is normal market behavior to economists. Price gouging refers to raising prices on goods and services to unfair levels, particularly during times of crisis. Vendors who jack up prices during a hurricane, earthquake or pandemic often blame market conditions.
Michael Salinger, an economics professor at Boston University’s Questrom School of Business and former director of the Bureau of Economics at the Federal Trade Commission, says they’re right. The real problem is that there are too few masks available.
“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, “he says.
Economists say a sharp increase in prices either by retailers or wholesalers is the natural response to such a sudden surge in demand and can help replenish supplies.
“These higher prices reward suppliers are ready to meet that surge in demand either from existing stocks or by quickly ramping up production,” says Michael Giberson, an economics professor with Texas Tech University’s Rawls College of Business.
Higher prices also discourage consumers from hoarding masks which are vital for first responders and healthcare professionals or people at high risk of contracting coronavirus, keeping the available supplies in the hands of those who need them most, he said.
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Price hikes also encourage manufacturers to accelerate production. “My guess is that the supply will be quite responsive to any price increases and that any shortages or major price increases are likely to be short-lived,” Salinger said.
How should we feel about price gouging? ‘We are right to be angry’
states have anti-gouging laws on the books but they define gouging differently. Florida’s law bans the sale of an “essential commodity” at an “unconscionable price,” but authorities often conclude that normal market forces – not profiteering – were at work.
The normal rules should not apply in emergencies when demand outstrips supply of basic necessities, says Dana Radcliffe, senior lecturer in business ethics at Cornell University Johnson College and an adjunct professor of ethics and public policy at Syracuse University. A “free and fair” market does not exist because buyers don’t have any other options, he says.
“It’s not a textbook economic transaction with a willing seller and a willing buyer,” he said. “One party has all the power because the other person is in a vulnerable situation of sometimes desperate need. ”
Radcliffe says regulators should crack down on business owners who take advantage of their fellow citizens in a civic emergency. Not only is it unfair, it’s unpatriotic, he says. “It’s trying to profit off the fact that the people around you are in very serious need, when what we should be doing is helping our community get through it, rather than pursue our own interest at the expense of our fellow citizens, “he says.” I think we are right to be angry about it. ”
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