More than a week ago, I wrote a story for Forbes about price gouging on Amazon.
I focused on the price of a can of Spam, the much-maligned and somewhat mysterious meat product that has historically been associated with tight budgets.
At that time, a 12-ounce can of Spam, which consists of p0rk and ham, was available at Walmart for $2.92 and at Target for $2.99.
On Amazon, however, one seller was charging $13.95 for a 12-ounce can of Spam with Bacon. Plus $4.99 shipping. The seller was still charging this price almost two weeks later.
And if that isn’t bad enough, the price being charged for a can of Spam with cheese on Sunday was $21.99. Plus $5.31 shipping.
On April 8, an Amazon spokesperson told me “there is no place for price gouging on Amazon.” She said Amazon “actively monitors our store and removes offers that violate our policies.” She said Amazon is working with state attorneys general to identify sellers who spike prices in their respective states.
Amazon supposedly has removed more than a half a million listings for price gouging and has suspended the accounts of more than 3,900 sellers. Amazon is also said to have instituted manual audits to detect sellers who evade Amazon’s automated systems to take advantage of customers.
But somehow price gouging for Spam continues?
I wrote the story because a retired, older couple living on a fixed income in New Hampshire was charged $4.39 for a 12-ounce can of Spam by their local supermarket, which is about 50% more than the price online.
The couple ordered groceries through a delivery service because they are afraid to leave their home due to their age and preexisting conditions, which make them particularly susceptible to COVID-19. Spam was one of many grocery items they purchased at a cost that they said was considerably higher than last month. They said they were also charged about $40 in fees associated with the delivery of the groceries.
Price gouging is particularly devastating to older people on a fixed income who cannot do comparison shopping.
Thirty-three state Attorneys General sent letters last month to Amazon, Walmart, eBay, Facebook and Craigslist criticizing their failure to crack down on price gouging for high-demand products during the pandemic. They cited a bottle of hand sanitizer priced at $20 and a $30 pricetag for six rolls of toilet paper.
According to The Hill, the Attorneys General demanded the companies create policies that look at prices historically to detect surges, set up a portal to report pricing complaints and monitor and respond to spiking prices.
State Laws
State laws ban price gouging during a state of emergency. These laws prohibit sellers from charging an exorbitant or excessive price in connection with the sale or lease of fuel, food, medicine, lodging, building materials, construction tools, or another necessity.
When does a price hike become price gouging? That varies depending on the state and a variety of other factors, including whether the supplier increased the price charged to the retailer.
Under California law, during a state of emergency, it is illegal for a person to sell food, emergency supplies, medical supplies, building materials, housing, transportation, or gasoline for a price that is more than ten percent greater than the price normally charged by that person for those products or services.