COVID-19

Amazon cracks down on COVID-19 price gouging

Marielle Segarra Mar 3, 2020
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Some third-party sellers have been charging hundreds of dollars for a couple small bottles of hand sanitizer or a box of protective face masks. Leon Neal/Getty Images
COVID-19

Amazon cracks down on COVID-19 price gouging

Marielle Segarra Mar 3, 2020
Some third-party sellers have been charging hundreds of dollars for a couple small bottles of hand sanitizer or a box of protective face masks. Leon Neal/Getty Images
Share Now on:
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Amazon is cracking down on third-party merchants for selling coronavirus-related products at inflated prices. The company says it has recently blocked or removed tens of thousands of listings for such products, like face masks and hand sanitizer.

“There is no place for price gouging on Amazon,” the company said in a statement.

On Amazon, some third-party sellers have been charging hundreds of dollars for a couple small bottles of hand sanitizer or a box of protective face masks.

Dana Radcliffe, who teaches business ethics at Cornell, said Amazon was smart to ban these listings — because customers do not like price gouging.

“People have a very strong reaction to it,” he said. “They feel that they’re being taken unfair advantage of. So that’s going to reflect upon the platform.”

Many economists, however, say it’s a bad idea to set rules around price gouging, like limiting price hikes during a public health crisis or a hurricane.

That’s because when prices are low it’s easier for people to hoard.

“You’ll see people loading up their carts with far more than they would if the price were higher, and the consequence […] is that people [who] get to the store later aren’t able to buy anything,” said Michael Salinger, a professor of economics at the Boston University Questrom School of Business.

It is hard to say exactly what qualifies as price gouging, versus simple supply and demand. And it’s hard for companies like Amazon to draw the line.

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