Would you pay $ 149 for a package of two 12-ounce bottles of Purell? How about a single container of Clorox wipes for $ 44.25, plus $ 14.59 shipping?
Buyers who browse the Internet and Main Street for these essential supplies say they are being hit by exorbitant prices. Shipping costs also skyrocketed, with a buyer quoted $ 500 for the floor and $ 5,000 for the next day.
The third-party vendors who store the vast virtual shelves of Amazon.com, Walmart, and eBay appear to be testing what the market will support. And social media has been inundated with complaints. Even California Governor Gavin Newsom joined the choir on Tuesday: “Seriously, @amazon? These prices are absurd.”
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Amazon.com said on Monday that it is rampant, removing or blocking more than a million products on its platform for price increases and misleading claims related to the epidemic. Amazon says it is also taking action on accounts that violate its policies, including suspending or removing sales privileges.
EBay reminded sellers on Friday not to include health claims in advertisements. Words like “coronavirus”, “Covid-19”, “virus” and “epidemic” were banned as well as “lists that try to profit from tragedies and disasters” and inflated prices relative to market value . EBay and Walmart have told USA TODAY that they are closely monitoring the situation and removing ads that run counter to policies.
Coronavirus price increases: “Someone is really making a profit there”
Over the weekend, 67-year-old Jack Arnest was looking for N95 masks when he spotted an eBay listing for three boxes for $ 62. But when he received his order confirmation, he noticed that he was only receiving three masks.
He dialed an abbreviated number on eBay and asked that the order be canceled, but wondered how many customers were misled by the photo on the list showing an individual mask leaning against a box of 20.
“There is no return policy, so if I hadn’t canceled right away, I would have been stuck and it pissed me off. He’s a guy who takes advantage of the fact that everyone is panicking and most people are rushing to get something going fast and not reading the fine print, “said retired project manager and engineer Arnest in the construction industry in Honolulu. “There is no way that a box of 20 masks should cost $ 400. It was a pretty clear example of gouging. Someone is really making a profit there. “
Dr. Wendy Lu, a dentist in Cupertino, California, says she orders masks 20 or 40 boxes at a time to protect herself and her staff during exams and procedures. When his January order was suddenly canceled, he was told to place the order again. When she did, the price had increased fivefold.
Lu says she switched to another supplier, but all suppliers are now limiting the number of boxes of face masks that dentists can order. At first it was five a week, now it’s two. Some suppliers are out of stock.
“It’s boring, but there isn’t much we can do,” said Lu, 52. “It’s supply and demand.”
What may seem like mercenary or predatory prices for some consumers is normal market behavior for economists.
The scam refers to the increase in prices of goods and services to unjust levels, especially in times of crisis. Vendors who drive up prices during a hurricane, earthquake or pandemic often blame market conditions.
Michael Salinger, professor of economics at the Questrom School of Business at Boston University and former director of the Bureau of Economics at the Federal Trade Commission, says they are right. The real problem is that there are too few masks available.
“Ideally, we would find a mechanism to ensure that those who are likely to be most vulnerable to the crisis such as the elderly and health workers get the supplies available. But the laws that prevent price increases do not will not achieve this goal, “he added. said.
Economists argue that a sharp increase in prices, whether from retailers or wholesalers, is the natural response to such a sudden increase in demand and can help to replenish supplies.
“These higher prices reward suppliers who are ready to meet this increased demand, either from existing stocks or by rapidly increasing production,” said Michael Giberson, professor of economics at Rawls College of Business at Texas Tech. University.
Higher prices also discourage consumers from hoarding masks that are vital to first responders and health professionals or those at high risk of contracting the coronavirus, by keeping the supplies available in the hands of those who have them. no more need, he said.
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The price increases also encourage manufacturers to speed up production. “I guess the supply will be very sensitive to any price increase and any shortage or major price increase will likely be short lived,” said Salinger.
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Many states have anti-gouging laws, but they define gouging differently. Florida law prohibits the sale of an “essential product” at an “unreasonable price”, but authorities often conclude that normal market forces – not profits – were at work.
Sara Ann Tinder, 35, says she spotted many Amazon.com ads with premium prices, even for butane fuel, selling for $ 19 versus the $ 3 she paid at Walmart. “Right now people think of it as life or maybe death, so they will buy items” at higher prices, says Tinder, who lives in Princeton, Illinois.
Normal rules should not apply in emergency situations when demand exceeds supply of necessities, says Dana Radcliffe, lecturer in business ethics at Cornell University Johnson College and adjunct professor of ethics and public policy at Syracuse University. A “free and fair” market does not exist because buyers have no other options, he says.
“It is not a classic economic transaction with a willing seller and 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 the event of a civic emergency. Not only is it unfair, it is unpatriotic, he says.
“He is trying to take advantage of the fact that the people around you are in great need when what we should be doing is helping our community get through it, rather than pursuing our own interest at the expense of our fellow citizens.” “He said” I think we are right to blame ourselves. “