What happens next Where's my refund? Best CD rates this month Shop and save 🤑
Coronavirus COVID-19

Gouge much? Purell for $149, face masks for $20: Coronavirus price hikes are making everyone mad

Would you pay $149 for a two-pack of 12-ounce bottles of Purell? How about a single container of Clorox wipes for $44.25, plus $14.59 shipping?

As the coronavirus spreads and people rush to protect themselves and their families from getting sick, the U.S. is seeing heavy demand for everything from masks to hand sanitizer.  

Shoppers scouring the internet and Main Street for these critical supplies say they are being hit with eye-popping prices. Shipping costs have also skyrocketed, with one shopper being quoted $500 for ground and $5,000 for next-day air. 

Third-party sellers who stock the vast virtual shelves of Amazon.com, Walmart and eBay seem to be testing what the market will bear. And social media has been flooded with complaints. Even California Gov. Gavin Newsom joined the chorus Tuesday: "Seriously, @amazon? These prices are absurd."

Washington State Attorney General Bob Ferguson, whose state has been hit the hardest by the coronavirus outbreak, said his office is investigating and asked for residents to file complaints if they spot gouging.

“We do not identify the targets of our investigations, but we are taking formal investigative actions,” Ferguson said in a news release Wednesday.

Coronavirus panic buying:Here's why we all need to calm down already

Toilet paper, bottled water, face masks:Coronavirus fears empty store shelves as shoppers stock up

Also on Wednesday, 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.

"We can’t allow shady businesses to hike prices on the supplies New Yorkers need to stay safe and healthy, like hand sanitizer and face masks," Hoylman said in a news release.

Amazon.com is cracking down, removing or blocking more than 1 million products on its platform for price gouging and misleading claims related to the outbreak. Amazon says it is also taking action on accounts that violate its policies, including suspending or removing selling privileges. 

EBay reminded sellers on Friday not to include health claims in listings. Words including "Coronavirus," "Covid-19," “Virus,” and "epidemic" were prohibited as well as “listings that attempt to profit from tragedies and disasters” and have inflated prices over market value. Both eBay and Walmart told USA TODAY that they are closely monitoring the situation and removing listings that go against policies.

Coronavirus price gouging: 'Somebody is really profiteering out there'

Over the 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," said Arnest, a retired project manager and engineer in the construction industry from Honolulu. “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.”

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 examinations and procedures. When her January order was suddenly canceled, she was told to place the order again. When she did, the price had gone up fivefold.

Lu says she switched to another vendor, but all vendors are now limiting how many boxes of face masks dentists can order. First it was five a week, now it’s two. Some vendors have run out of stock.

“It’s annoying, but there is not much we can do,” says Lu, 52. “It’s supply and demand.”

What may seem like mercenary or predatory pricing to some consumers is normal market behavior to economists.

Price gouging refers to raising prices on goods and services to unfair levels, particularly during times of crisis. Vendors who jack up prices during a hurricane, earthquake or pandemic often blame market conditions.

Michael Salinger, an economics professor at Boston University's Questrom School of Business and former director of the Bureau of Economics at the Federal Trade Commission, says they're right. The real problem is that there are too few masks available.

Walgreens in Hoffman Estates, Ill. started stocking heavy duty face masks on Jan. 31, 2020.

"Ideally, we would find a mechanism for making sure that those who are likely to be most vulnerable to the crisis such as the elderly and health workers get the available supplies. But laws that prevent prices from rising will not accomplish that goal," he says.

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,” says Michael Giberson, an economics professor with Texas Tech University’s Rawls College of Business. 

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, he said.

Coronavirus, explained:Everything to know about COVID-19, the deadly virus alarming the world

Price hikes also encourage manufacturers to accelerate production.

"My guess is that the supply will be quite responsive to any price increases and that any shortages or major price increases are likely to be short-lived," Salinger said.

How should we feel about price gouging? 'We are right to be angry'

That's not much comfort to Sara Ann Tinder, 35, who says she has spotted many Amazon.com listings with marked-up prices, even for butane fuel, selling for $19 versus the $3 she paid at Walmart. 

“Right now, people look at this as life or maybe death so they will buy items” at the higher prices, says Tinder, who lives in Princeton, Illinois.

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."

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.”

Newsom on Wednesday declared a state of emergency in California during which “excessive and unjustified increases” of more than 10% on basic goods and services including medical supplies is prohibited.

Bottom line, however, investigations often conclude normal market forces are at work, not profiteering. 

The normal rules should not apply in emergencies when demand outstrips supply of basic necessities, says Dana Radcliffe, senior lecturer in business ethics at Cornell University Johnson College and an adjunct professor of ethics and public policy at Syracuse University. A “free and fair” market does not exist because buyers don’t have any other options, he says. 

“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.”

Radcliffe says regulators should crack down on business owners who take advantage of their fellow citizens in a civic emergency. Not only is it unfair, it’s unpatriotic, he says.

“It’s trying to profit off the fact that the people around you are in very serious need, when what we should be doing is helping our community get through it, rather than pursue our own interest at the expense of our fellow citizens," he says. "I think we are right to be angry about it."

Featured Weekly Ad