Amazon Dogged by Price Gouging as Coronavirus Fears Grow -- 2nd Update
March 05 2020 - 7:17PM
Dow Jones News
By Sharon Terlep
Amazon.com Inc. is struggling to stamp out third-party sellers
charging exorbitant prices for virus-killing cleaning supplies,
hand sanitizer and other products in high demand amid coronavirus
fears.
The company said it has removed tens of thousands of items
because of unreasonably high prices and it is taking action against
sellers making unsubstantiated claims.
"There is no place for false claims and price gouging on
Amazon," Dharmesh Mehta, Amazon's vice president of world-wide
customer trust and partner support, said Wednesday at a
consumer-protection hearing in Washington, D.C.
The price issue persisted Thursday on Amazon and elsewhere
online. Among the items listed for sale on Amazon was a 33-count
container of Clorox disinfecting wipes for $20.99, roughly eight
times the typical cost. An 12-ounce, two-pack of Purell hand
sanitizer bottles was listed at $99.95, around 10 times what major
retailers charge.
Health officials have said cleaning hands and surfaces with
household disinfectant is critical to stopping the virus'
spread.
U.S. sales of hand sanitizer were up 54% for the week ended Feb.
22 compared with the same period a year ago, according to Nielsen.
Sales of thermometers were up 34% and aerosol disinfectant sales
rose 19%, the firm said.
Price gouging isn't limited to Amazon. Online marketplaces such
as eBay Inc. and Facebook Inc. featured similarly high prices.
Walmart Inc. also had instances of higher-than-usual prices online
from third-party sellers.
On Thursday, eBay started removing items, such as hand sanitizer
and face masks, that are in high demand in the U.S. due to
coronavirus and updated its listing policy to address the
situation. Already, the site had prohibited sellers from using the
term coronavirus in product listings. The moves come after
California declared a state of emergency, which makes price gouging
illegal on essential items.
In a statement, the company said "eBay is taking significant
measures to block or quickly remove items on our marketplace that
make false health claims."
Facebook said it is working to ensure listings on its
marketplace comply with local laws. A Walmart spokesman on
Wednesday said the company is closely monitoring the situation and
removing any items with abnormally high prices. Shoppers also can
alert the company to any price gouging, he said.
Major bricks-and-mortar retailers, from big-box stores to
pharmacy chains, have held prices steady as shoppers quickly clear
shelves. The websites of Target Corp., CVS Health Corp., Walgreens
Boots Alliance Inc. and Home Depot Inc. showed in-demand products
at typical prices, but the items were largely sold out. Those
companies buy products directly from manufacturers.
"Supply of products continues to be fluid, and we are
resupplying as quickly as possible," CVS said in a statement. A
Walgreens spokesman said the company is seeing temporary shortages
in some stores.
Purell-brand hand-sanitizing wipes, sprays and soap are among
the most in-demand items online and in stores. Parent company Gojo
Industries Inc. implemented a "demand surge preparedness team" in
December in anticipation of a sales spike and began limiting sales
to retailers weeks ago in an effort to ensure adequate supplies to
medical establishments, which comprise Purell's biggest business
segment, a company spokeswoman said.
"This is the best way to get product evenly distributed to the
places it is needed most," she said. "This approach also helps
prevent bad actors from stockpiling and price gouging."
Clorox Co., with a slate of cleaning products that includes
disinfectant sprays and wipes, last week said it was prepared for a
surge in demand. Its products were among those either sold out or
in short supply at online and bricks-and-mortar retailers
nationwide.
A Clorox spokeswoman said the company has a disinfecting product
supply team working round the clock to replenish supplies as
quickly as possible. On price gouging, she said, "it's very
disappointing to see sellers doing this at a time when people need
access to disinfecting products."
High prices are particularly troublesome in fighting the spread
of coronavirus because people with lower incomes, who rely more on
public transportation and are less likely to be able to isolate
themselves, are at greater risk of spreading and contracting the
virus, said the University of Michigan's Aradhna Krishna, a
behavioral scientist who studies pricing behavior. Rationing supply
also tends to be ineffective in times of crisis, she said.
"Even stocking up has moral and ethical issues," she said. "It's
a very difficult situation."
Dana Mattioli contributed to this article.
Write to Sharon Terlep at sharon.terlep@wsj.com
(END) Dow Jones Newswires
March 05, 2020 19:02 ET (00:02 GMT)
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