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.
COVID-19 Economy FAQs
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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