Amazon Dogged by Price Gouging as Coronavirus Fears Grow
Date: Friday, March 6, 2020
Source: The Wall Street Journal
Third-party sellers on the website charging as much as six times the normal price for virus-killing supplies; $50 for a two-pack of Purell
Amazon. AMZN -1.19% com Inc. is struggling to stamp out third-party sellers charging exorbitant prices for virus-killing cleaning supplies, hand sanitizer and other products in high demand amid coronavirus fears.
The company said it has removed tens of thousands of items because of unreasonably high prices and it is taking action against sellers making unsubstantiated claims.
“There is no place for false claims and price gouging on Amazon,” Dharmesh Mehta, Amazon’s vice president of world-wide customer trust and partner support, said Wednesday at a consumer-protection hearing in Washington, D.C.
The price issue persisted Thursday on Amazon and elsewhere online. Among the items listed for sale on Amazon was a 33-count container of Clorox disinfecting wipes for $20.99, roughly eight times the typical cost. An 12-ounce, two-pack of Purell hand sanitizer bottles was listed at $99.95, around 10 times what major retailers charge.
Health officials have said cleaning hands and surfaces with household disinfectant is critical to stopping the virus’ spread.
U.S. sales of hand sanitizer were up 54% for the week ended Feb. 22 compared with the same period a year ago, according to Nielsen. Sales of thermometers were up 34% and aerosol disinfectant sales rose 19%, the firm said.
Price gouging isn’t limited to Amazon. Online marketplaces such as eBay Inc. and Facebook Inc. featured similarly high prices. Walmart Inc. also had instances of higher-than-usual prices online from third-party sellers.
On Thursday, eBay started removing items, such as hand sanitizer and face masks, that are in high demand in the U.S. due to coronavirus and updated its listing policy to address the situation. Already, the site had prohibited sellers from using the term coronavirus in product listings. The moves come after California declared a state of emergency, which makes price gouging illegal on essential items.
In a statement, the company said “eBay is taking significant measures to block or quickly remove items on our marketplace that make false health claims.”
Facebook said it is working to ensure listings on its marketplace comply with local laws. A Walmart spokesman on Wednesday said the company is closely monitoring the situation and removing any items with abnormally high prices. Shoppers also can alert the company to any price gouging, he said.
Major bricks-and-mortar retailers, from big-box stores to pharmacy chains, have held prices steady as shoppers quickly clear shelves. The websites of Target Corp., CVS Health Corp., Walgreens Boots Alliance Inc. and Home Depot Inc. showed in-demand products at typical prices, but the items were largely sold out. Those companies buy products directly from manufacturers.
“Supply of products continues to be fluid, and we are resupplying as quickly as possible,” CVS said in a statement. A Walgreens spokesman said the company is seeing temporary shortages in some stores.
Purell-brand hand-sanitizing wipes, sprays and soap are among the most in-demand items online and in stores. Parent company Gojo Industries Inc. implemented a “demand surge preparedness team” in December in anticipation of a sales spike and began limiting sales to retailers weeks ago in an effort to ensure adequate supplies to medical establishments, which comprise Purell’s biggest business segment, a company spokeswoman said.
“This is the best way to get product evenly distributed to the places it is needed most,” she said. “This approach also helps prevent bad actors from stockpiling and price gouging.”
Clorox Co., with a slate of cleaning products that includes disinfectant sprays and wipes, last week said it was prepared for a surge in demand. Its products were among those either sold out or in short supply at online and bricks-and-mortar retailers nationwide.
A Clorox spokeswoman said the company has a disinfecting product supply team working round the clock to replenish supplies as quickly as possible. On price gouging, she said, “it’s very disappointing to see sellers doing this at a time when people need access to disinfecting products.”
High prices are particularly troublesome in fighting the spread of coronavirus because people with lower incomes, who rely more on public transportation and are less likely to be able to isolate themselves, are at greater risk of spreading and contracting the virus, said the University of Michigan’s Aradhna Krishna, a behavioral scientist who studies pricing behavior. Rationing supply also tends to be ineffective in times of crisis, she said.
“Even stocking up has moral and ethical issues,” she said. “It’s a very difficult situation.”