Online marketplace eBay is banning sales from U.S. listings for hand sanitizer, disinfecting wipes and surgical masks to stop a surge in price gouging hitting consumers desperate to protect themselves and their families from the coronavirus.
The decision comes after USA TODAY reported inflated prices on critical supplies on major online platforms including eBay that could violate price-gouging laws in some states.
Sellers were told by eBay that they could no longer post new listings for N95 and N100 masks, disinfecting wipes and hand sanitizers.
This week, California Gov. Gavin Newsom declared a state of emergency during which “excessive and unjustified increases” of more than 10% on basic goods and services including medical supplies is prohibited.
Washington State Attorney General Bob Ferguson, whose state has been hit the hardest by the coronavirus outbreak, said his office is investigating incidents and asked for residents to file complaints if they spot gouging.
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Many 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.”
Price gouging generally refers to raising prices on goods and services to unfair levels, particularly during times of crisis.
Florida Attorney General Ashley Moody’s office is reaching out to retailers “to help ensure Floridians can afford health-related products,” press secretary Kylie Mason said in a statement to USA TODAY.
“Our office continues to review complaints and will aggressively pursue any misleading marketing regarding health claims or scams during this public health emergency,” Mason said. “Manufacturers and sellers should be forewarned that our office will pursue any complaints we find actionable.”
Also this week, Sen. Brad Hoylman, D-Manhattan, said he would introduce legislation to crack down on major price hikes on medical supplies during a public health crisis. Under the proposal, the attorney general could penalize retailers, manufacturers and distributors who raise prices on supplies by more than 10% during an emergency.
Shoppers told USA TODAY that while scouring the internet and Main Street for these critical supplies, they were being slapped with astronomical price tags. Shipping costs also skyrocketed, with one shopper being quoted $500 for ground and $5,000 for next-day air.
The complaints involved third-party sellers who stock the vast virtual shelves of Amazon.com, Walmart and eBay.
Amazon.com and Walmart could not be immediately reached for comment.
In a statement, eBay said it was closely monitoring price gouging on coronavirus-related items and taking “significant measures to block or quickly remove items on our marketplace that make false health claims.”
“We are making every effort to ensure that anyone who sells on our platform follows local laws and eBay policies,” the statement said.
Last weekend, Jack Arnest, 67, was hunting for N95 masks when he spotted an eBay listing for three boxes for $62. But when he got his order confirmation, he noticed he was getting only 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 20.
“There is no return policy, so if I 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,” Arnest, a retired project manager and engineer in the construction industry from Honolulu, told USA TODAY this week. “There is no way that a box of 20 masks should cost $400. That was a pretty clear-cut instance of gouging. Somebody is really profiteering out there.”
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 ready to meet that surge in demand either from existing stocks or by quickly ramping up production,” Michael Giberson, an economics professor with Texas Tech University’s Rawls College of Business, said.
His take? Higher prices discourage consumers from hoarding masks that are vital for first responders and health care professionals or people at high risk of contracting coronavirus, keeping the available supplies in the hands of those who need them most.
But Dana Radcliffe, senior lecturer in business ethics at Cornell University Johnson College and an adjunct professor of ethics and public policy at Syracuse University, says normal rules should be suspended during emergencies when demand outstrips supply of basic necessities.
A “free and fair” market does not exist because buyers don’t have any other options, he told USA TODAY earlier this week.
“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.”
Contributing: Kelly Tyko