AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Tue Mar 24 2020 10:56:35

False Positives and Legal Consequences of Price Gouging

By: Ina Steiner

Sponsored Link

Ecommerce platforms are under scrutiny for their listings of high-demand items at exorbitant prices as people complain of price gouging during the coronavirus outbreak - including lawmakers and regulators.

Online sellers have both defended the practice as capitalism's supply-and-demand model and condemned the practice as exploitive during a public health crisis.

But however they feel about it, sellers are at risk of the consequences of the crackdown, from false positives to prosecution.

Amazon announced yesterday it is collaborating with federal, state, and local law enforcement agencies and policymakers to hold price gougers accountable. 

"If we find a price that violates our policy, we remove the offer and take swift action against bad actors engaged in demonstrated misconduct, including suspending or terminating their selling accounts and referring them to law enforcement agencies for prosecution under relevant laws."

The poster child of "price gouging" was the seller profiled in the New York Times in early March who reportedly bought up nearly 18,000 bottles of hand-sanitizer to sell on Amazon. He donated the bottles after a backlash, and the state Attorney General began an investigation. 

A quick Google search finds that each state has its own way of dealing with the issue. The Tennessee AG website has a page devoted to price gouging, explaining what it is and the consequences, which it explains as the following: "Under the law, the Attorney General's Office can put a stop to price gouging and seek refunds for consumers. The courts may also impose civil penalties ($1,000 per violation) against price gougers."

To some who are outraged about the items and prices turning up on marketplaces, it feels like platforms are swatting at listings that violate the bans, such as eBay's ban on face masks and other items.

And some sellers say the marketplaces are issuing takedowns for listings that have nothing to do with the COVID-19 outbreak - in other words, "false positives." We've heard of eBay removing listings for golf putters and clothing, with some reporting receiving the following message:

"We had to remove your listing because it didn't follow our Disaster and tragedy policy. Listings or items that portray, glorify, or attempt to profit from human tragedy or suffering, or that are insensitive to victims of such events, are not allowed."

It's *almost* humorous to see what can get trapped in the coronavirus policy net: "I put some high-dollar items on a special sale to try to bring in some cash and called it a "Cabin Fever" sale," one reader explained in a Facebook comment. She was taking 30% off of $500 item type stuff, and one item got reported as violating eBay's policy - "I was extremely confused because it was a Thermador Hood Vent Motor," she said.

When she finally got a response from eBay, it turned out the word "Fever" in her "Cabin Fever" sale caused the item to be removed. "I quickly changed the name of my sale."

The problem now extends beyond price gouging. The Washington Post reports Amazon is having delivery problems due to high demand. 

"Amazon's inability to deliver household staples such as toilet paper and bleach to many customers has led the company to reduce sales of nonessential items and prioritize shipping to members of its $119-a-year Prime service," according to the newspaper (which is owned by Amazon cofounder and CEO Jeff Bezos).



Comments (13) | Permalink

Readers Comments

Perminate Link for False Positives and Legal Consequences of Price Gouging   False Positives and Legal Consequences of Price Gouging

This user has validated their user name. by: Life During Wartime

Tue Mar 24 11:23:08 2020

There is a fair amount of price gouging on eBay.  But what are you supposed to do when all the stores in your area were stripped of products (like TP) weeks ago?  I did what any person with ample $$$ would do:  I paid about $25 (including shipping) for a 2 months supply of toilet paper.  And I will do that again, if I have to.

The vendors on the various platforms doing the scalping on household products can do it because the places where they purchased the items allowed them to empty the shelves.  If lawmakers and regulators want to go after platforms and online sellers, they also need to take a look at big box merchants and how they facilitate hoarding -- for imagined personal needs as well as retail arbitrage.  

The shelves at local stores have been empty of hand soap, cleaning products of all kinds, and paper products for nearly a month now.  And people having to do without these things is itself a disease vector.  Not for the coronavirus only, but many other nasties.  Now that their stock is gone, there are signs taped up at all the registers in the stores about ''limit of 2 per customer''.  Great idea, now that there is no stock to limit.    

Perminate Link for False Positives and Legal Consequences of Price Gouging   False Positives and Legal Consequences of Price Gouging

by: FeelingFroggy This user has validated their user name.

Tue Mar 24 11:55:04 2020

Was in a costco store yesterday and a buyer was buyer a FULL PALLET OF DISINFECTANT WIPES. Trying to figure out how to get them all in the truck. There was 360 canisters on the pallet that he paid about 3.00 each for. There was nothing left. I asked about it to the manager and she just blew me off with the I didn't see that crap. BIG BOX STORES ARE MORE RESPONSIBLE FOR THE HOARDING THAN JOE BLOW. That same canister on Amazon cheapest is 12.00 and on greedbay its 13.50.

Perminate Link for False Positives and Legal Consequences of Price Gouging   False Positives and Legal Consequences of Price Gouging

This user has validated their user name. by: Life During Wartime

Tue Mar 24 13:13:18 2020

I just read an article from THE ATLANTIC on a newsfeed about how this problem is being handled in Denmark.  

The price for a single bottle of hand sanitizer there is 5.50 Euro.  The price for 2 or more bottles is over 130.00 Euro EACH.  That stops hoarding and retail arbitrage.  

On every level we suffer in the USA from poor leadership (or just total lack of it),  People who have the authority seem to be afraid to say NO.  This has to change.

Perminate Link for False Positives and Legal Consequences of Price Gouging   False Positives and Legal Consequences of Price Gouging

by: flybuy This user has validated their user name.

Tue Mar 24 19:32:28 2020

Well we have to be a part of the solution. If you see price gouging on Ebay or another site report it. If you see someone driving off with cases of hand sanitizer, paper towels, etc take a photo of the license plate and report it to both the store and law enforcement.
People with those ring doorbells are always chatting on community groups about seeing this or that. IF you see someone pull in a driveway with a truck stacked with items needed you should report it. Remember it is not just about allowing the average person to get sanitizing materials to decrease the risk of disease to their families and themselves. There are hospitals and clinics needing these things.
I talked to a friend in Norway and she said people there are donating the single use items (e.g.sanitizing wipes) to hospitals as they are running out. Also people are using their free time to sew masks for people who work in medicine and other areas with high risk of exposure.

Perminate Link for False Positives and Legal Consequences of Price Gouging   False Positives and Legal Consequences of Price Gouging

by: purpleiris This user has validated their user name.

Wed Mar 25 04:45:42 2020

I would go as far as recording it on my phone and reporting it. They are all a part of the problem and are committing a crime they well-deserve to pay handsomely for.

Perminate Link for False Positives and Legal Consequences of Price Gouging   False Positives and Legal Consequences of Price Gouging

by: Whatever This user has validated their user name.

Wed Mar 25 10:27:55 2020

People - hold to store accountable not the buyer - they have the ultimate control. It's called corporate greed.  I went to the grocery store yesterday on "senior" day. I need quite a few things. I got my 2 cases of water in the cart and wandered over to the meat counter which has been empty for days now and  managed to get a package of stew meat which would normally sell for around $3.69 #.  It was now $5.  Bought it anyway.  Then went to the TP department to find the shelves bare.
There was a woman there really mad that there was no tp on senior day - I don't think they even had any when the store opened.
Here's what she told me - "Remember these corporations when this is over."
She's right - there's plenty of tp - it's going somewhere else where they get more money.  I thought abut it and decided that if this store can't even sell me one single 4 pack of tp - well - I've been shopping there for over 30 years - I don't need to buy their over priced other goods either.  Took my water and stew meat and left.

Perminate Link for False Positives and Legal Consequences of Price Gouging   False Positives and Legal Consequences of Price Gouging

This user has validated their user name. by: Life During Wartime

Wed Mar 25 12:34:11 2020

Of course the stores are accountable!

If a neighbor of mine were to park in front of our condo building (we don't have driveways or garages) and start unloading a pallet's worth of hand sanitizer, why would I take pictures of him or her?  I am assuming that such a large quantity was purchased honestly at some store, rather than smuggled out hidden in clothing, shop-lifter style.  What's the reportable action this neighbor might have done?  

The concept of holding business blameless for stuff like this is wrong, IMO.  The first time the meme of shoppers emptying store shelves, hoarding TP etc., showed up in social media and the news back in February,  all merchants nationwide should have been on notice with (especially) the management of big box chains passing the word down to their stores that restrictions on quantities purchased by a single shopper needed to be in place right away.  That would have been the end of it.

I know the employees of local supermarkets here saw the hoard shoppers with their giant carts overflowing as amusing.  And that's okay because they don't get to make policies like ''2 whatevers per customer''.  This is a failure of leadership.


Perminate Link for False Positives and Legal Consequences of Price Gouging   False Positives and Legal Consequences of Price Gouging

by: Chicago48 This user has validated their user name.

Thu Mar 26 08:01:08 2020

Etsy is selling face masks (non-N95) and I've bought several for myself and family.  I do wish the sellers would put in their listings that it's not N-95 certified, and give some info about how protective it is.
I don't see anything wrong with selling face masks, esp. if they are handcrafted.
I'm now on the hunt for protective gloves.

Perminate Link for False Positives and Legal Consequences of Price Gouging   False Positives and Legal Consequences of Price Gouging

by: Chicago48 This user has validated their user name.

Thu Mar 26 08:02:19 2020

This story is for laughter only.  You can find it at iheart radio:
Quarantined Man Sends Dog To Store With Note For Cheetos, Dog Delivers

Perminate Link for False Positives and Legal Consequences of Price Gouging   False Positives and Legal Consequences of Price Gouging

by: TexasTwister This user has validated their user name.

Thu Mar 26 10:48:12 2020

I was one of those ''evil'' eBay sellers of surgical masks. I was pretty ticked that they took down my listing (and everyone else's for that matter). My price was below the average selling price on the platform (about $40 for a box of 50) so I certainly wasn't gouging. Today you would think that category would be empty on eBay, but it is not. It has 4 pages of masks described as ''face shields'', ''dust protection '', etc. Mostly Chinese sellers who are selling at or above my original listing price,  plus mine were name brand,  surgical quality, US seller. I'm going to donate my remaining stock to my local nonprofit hospital (about 3500 masks)

Perminate Link for False Positives and Legal Consequences of Price Gouging   False Positives and Legal Consequences of Price Gouging

by: purpleiris This user has validated their user name.

Fri Mar 27 03:22:30 2020

"What's the reportable action this neighbor might have done?"

Hoarding, for one, as it's a selfish practice. No family needs a pallet of sanitizer. If they're buying it to sell it as ridiculous prices, then you can add price gouging to the list.

During a time of crisis, it's all the hoarders and price gougers who cause shortages of supplies and necessities. There is absolutely no reason I should have ever walked into my grocery store to see all the meat, dairy, paper products and water completely gone. I still haven't gotten any paper products.

People need to be more responsible and a lot less self-serving during a time of crisis. If they're part of the problem, then they have done something worth reporting.

Perminate Link for False Positives and Legal Consequences of Price Gouging   False Positives and Legal Consequences of Price Gouging

by: purpleiris This user has validated their user name.

Fri Mar 27 03:25:28 2020

By the way, I do agree that businesses should also be held accountable for allowing it.

Perminate Link for False Positives and Legal Consequences of Price Gouging   False Positives and Legal Consequences of Price Gouging

This user has validated their user name. by: unsuck
Web Site

Fri Mar 27 12:19:05 2020

"Was in a costco store yesterday and a buyer was buyer a FULL PALLET OF DISINFECTANT WIPES...I asked about it to the manager and she just blew me off with the I didn't see that crap. BIG BOX STORES ARE MORE RESPONSIBLE FOR THE HOARDING THAN JOE BLOW..."

~~~~~~~~~~~
Froggy agree 100%!

*Particularly* when consumers pay a membership for the privilege of shopping there, like at Costco!

My understanding is those sanitizing wipes were quantity restricted after thousands of members (like you and I) got ticked-off after not being able to purchase them.

Back on March 17th Costco CEO Craig Jelinek pushed an email (I received mine at 12:30pm ET) to members and issued a press release to announce changes Costco was making, including "Limits have been implemented on certain items" (like those sanitizing wipes).

https://www.costco.com/coronavirus.html

~~~~~~~~
~~~~~~~

Do
you mind sharing which Coscto/what store number this occurred at and when? (If you'd rather reply privately feel free to email unsuckebay@gmail.com).

I would like to get this reported to corporate so additional coaching/training can be performed as needed. TIA




Login is required to post comments.
To sign in to leave a comment, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.