Price Gouging Questions


#1

Anyone can give a clear definition of price gouging on Amazon in recent chaos? I searched on Amazon. They only give a very vague Marketplace Fair Pricing Policy which is not useful in practice at all.

I want to know specifically that what products are affected and what kind of price increase is permitted(10%? 20%? 30%? comparing with who?).

For example, nintendo switch (ASIN: B01MFADJFV) msrp is $299.99 and everyone is selling it at $500.00.(https://www.amazon.com/gp/offer-listing/B01MFADJFV/ref=dp_olp_afts?ie=UTF8&condition=all) Isn’t this considered as “Price Gouging”? Why don’t I see amazon do anything about it? (Disclaimer: I don’t sell any nintendo products)


#3

I don’t think anyone can give an exact figure because price gouging laws vary from state-to-state. Some give exact figures and some use only loose terminology around an excessive or unjustified increase in price. I’d also add that many of the state laws focus specifically on essential goods and services, so wouldn’t likely apply to something like a nintendo switch. Basically, if you are selling any items that could be considered essential, you should charge a price that’s inline with what you’ve been charging historically unless you have a legitimate and provable reason for a larger increase (for instance, if your wholesale price jumps significantly). Otherwise, you’re at risk of legal trouble.

As far as what Amazon is looking for, I doubt they are going to disclose a set figure. By releasing a figure, they’d be encouraging folks to increase their prices but just slightly less than the figure they disclosed, which isn’t behavior they likely want to encourage.


#4

No, that isn’t price gouging. Price gouging refers to raising prices on life-sustaining goods such as food and fuel. There are no specific guidelines for price gouging because they vary from state to state. Personally I wouldn’t sell anything in health or food on Amazon at this time for this reason.

Amazon’s Fair Pricing Policy could apply to that item, but it isn’t price gouging.


#5

Price gauging refers to any product, they don’t need to be life-sustaining.


#6

#8

I agree with you that price gouging should only apply to “essential goods and services”.
But is there a detailed list of products that are affected?

Amazon really should provide more specific practical instructions instead of making it a guess who game.


#9

No, that is supply and demand. You cannot gouge someone on a luxury item.

Price gouging laws vary from state to state. However, there are no laws regarding raising the price of a Nintendo Switch, national emergency or not.


#10

There is not, because every state will have their own definitions of what is gouging, and what it applies to. We’re not looking at an Amazon policy here; we’re looking at an attempt to comply with laws. If Amazon were to clearly state “You can sell xxxx for 20% more than before”, but the law of one state says that xxxx is “essential” and can’t be sold for more than 10% more, then Amazon would face liability for telling you incorrect information.


#11

Nobody can give a clear definition of “price gouging” on Amazon. Amazon does not follow the state laws. It has programmed bots that sweep the catalog. Only one department knows what the parameters are for these bots, and they change rapidly. Just stay up to date on various forums for what is getting accounts suspended and use your best judgement. Best strategy is to diversify across your own website, other platforms, and local sales so a poorly programmed bot on this platform is unable to affect your entire business.


#12

Exactly, one of my listings, they expect us to sell 20% under what it was selling for before COVID 19 crisis. So who knows what they want.


#13

8 people were arrested in San Diego last week for price gouging toilet paper. How do you square that? Toilet paper is a “nice to have”, certainly not life or death.


#14

Why are you arguing about what price gouging is in CA? It’s a law. Go google it.


#15

“Price gouging” is a highly subjective term. It is defined by those with the most power to do so and is usually defined vaguely in order to keep it’s meaning “fluid”.

Good luck on your search for such a definition.


#16

I believe as soon as a customer complains you on price gouging, you get a record of policy violation in your performance record. You have to appeal if you want to remove the violation record. I just got one. I filed an appeal. But I don’t expect it can be removed.


#17

No one is arguing, we are debating whether price gouging pertains to only life sustaining goods or not. I used CA to support my POV. Thanks for your contribution, it was very helpful.


#18

Unless you have a bidet it is much more than a nice to have. Not to get too graphic but you would have a severe bacteria problem without toilet paper. I stand by my point that price gouging is only relevant to life essential products during an emergency.


#19

You’ve presented no facts that support your point. Your opinion that a person will die due to a lack of toilet paper makes it clear you’re either really ignorant, or a troll.


#20

Hi @stjedi–

"Price gouging" can only occur during a state of emergency.


During a state of emergency, the products susceptible to price gouging claims are those that are determined to be “essential” and can vary, even within the same emergency, by state and/or marketplace (or Sellers’ opinions, as seen in this thread :wink:).

TLDR: There’s no list.


Although Amazon has not published any clarification on their criteria, their recent foray into price gouging suspensions began the same day that CA declared an SOE. CA was the first state to do so.

Therefore, personally, I would use CA’s interpretation at this time1: no more than 10% above average retail price in the previous 30 days.

  • no more than 10% above – This is very conservative, and depending on cost for new stock, some Sellers might spend time really thinking about whether any price change is worth keeping that item active during the SOE.
  • average retail price in the previous 30 days – It’s important to note that with this wording, the law sides with savings for the customers. Customers should not be paying more than 10% above the average retail price in the past 30 days for essential items–even if Seller’s, brand’s, and manufacturer’s costs have increased more than 10%, or if bringing an essential item to a marketplace during the SOE requires costs greater than 10% above retail. This is also an issue for anyone practicing RA for essential items because their starting cost is retail (or just under).

:confounded: This is so tricky, especially for lower-priced essential items. It’s easier to see that raising a usual $20 average price to $40 (100% increase) could be problematic, but it’s more difficult to see that raising to $25 (25% increase) or even “only” to $23.00 (15% increase) could also be just as problematic. When the item’s price is only $5 or $10, it’s literally a matter of cents, not dollars. :grimacing:

1 I do not sell any essential items at this time.


#21

Does any one know whether vitamins/supplements are essential items under current state of emergency?

The word “vitamin” means essential elements for life. But “supplement” means extra staff, not critical for your well-being. My Vitamin C was gone so quickly, even after I raised a few dollars on price. I have been out of stock for 3-4 weeks. And my contract manufacturer does not function normally caused by pandemic, and there will be supply chain issue for the entire vitamin industry as I personally believe. Consumers cannot find VC to buy now. What is incentive for manufacturer to meet the unusual demand by consumers?


#22

Explain to us how the Nintendo Switch is a piece of necessary medical equipment? Or how about this your post and your example are ridiculous and redundant since this same silly thread with the same type of apple to oranges comparison has been done 30 times on this forum so far. If you honest don’t know what price gouging is then you should find another way to make money since you have no clue how retail sales work.

Some where common sense should enter the picture.