Pandemic produces complaints of price gouging for many items

Investigations

The Tennessee Attorney General’s Office has received nearly 300 complaints since the start of the pandemic

MEMPHIS, Tenn. — Empty shelves are a common sight at the grocery store these days. We’re five months into the pandemic, yet it’s still hard to find certain necessities like cleaning supplies.

However, finding the products isn’t the only problem. The WREG Investigators looked into who’s protecting consumers from price gouging.

It was just before 7 a.m. on a rainy, Saturday morning. Shoppers were already waiting to get into Walmart near Highway 385 and Winchester in Memphis. The line was even longer next door at Sam’s Club where the doors weren’t scheduled to open for another two hours.

Crivelle Ladd was one of the shoppers who left her house early to get in line. She said she does most of her shopping online, but hits the stores on weekends.

“This is what life is like now, you’re needing to go out in public to find things for your home to keep you safe and getting up early in the morning is what you have to do,” said Ladd.

Ladd is the mother an on eight-year-old, but her main concern is her grandmother.

“I am helping my mom, taking care of her mom who has dementia, so we have to keep everything clean and sanitized, just for her sake.”

The cleaning supply shelves were pretty bare at Walmart but Ladd found rubbing alcohol, Clorox Wipes and Lysol Multi-Surface Cleaner there, along with Lysol Disinfectant Spray at Sam’s.

“I got exactly what I was looking for today,” Ladd said.

She says that doesn’t always happen.

But finding the products is just one of the problems. Prices have skyrocketed, both in store and online.

Ladd said, “I’ve seen where products have gone up to a $100, $50, just for a can of Lysol!”

Ladd is referring to re-sellers hoarding products, then hiking prices on sites like Amazon.

WREG contacted Amazon and requested details about its price gouging policy. A spokesperson directed us to a blog post titled, Price Gouging Has No Place in Our Stores. It said that Amazon has already removed well over half a million offers from its stores due to coronavirus-based price gouging.

The online retail giant also noted it’s reached out to every state attorney general in the country.

Through open records, WREG learned the Tennessee Attorney General’s Office has received nearly 300 complaints about price gouging since the start of the pandemic.

While the term price gouging is often used loosely, it refers to a law that’s activated during a state of emergency.

When Gov. Bill Lee declared a state of emergency related to COVID-19, the state’s anti-price gouging law went into effect. It prohibited vendors from charging to much for the following categories:

• Emergency supplies
• Medical supplies
• Consumer food items

WREG spoke with Claire Marsalis, the Director of the Division of Consumer Affairs for the Office of the Attorney General, about price gouging complaints and the state’s process for investigating them.

“It really started with the grocery items. People started to notice an increase in items at the stores as people were trying to stock up on certain things,” said Marsalis.

WREG reviewed complaints from Shelby County and there were several about the price of milk, eggs and meat.

One person wrote in a complaint filed about a gas station, “Was going to buy milk but it was over $6.00 for a gallon of milk. This is an absurd case of price gouging! Please investigate.”

Another person who indicated being on a fixed income filed a complaint about the price of toilet paper. It read, “Since the coronavirus outbreak the price has gone up to $25 this is astronomical.”

A woman who wrote about the price of ground beef said, “The price for most of the packages was anywhere from $16.00 to $20.00. This was disgusting and unnecessary.”

However, according to Marsalis, higher prices don’t always equate to price gouging.

“It may be justifiable based on the cost increase to the business,” she said.

The head of the Tennessee Grocers and Convenience Store Association told WREG the entire supply chain is “struggling to catch up” and retailers “don’t have a choice but to charge more.”

The other price gouging complaints were about products like hand sanitizer, cleaning supplies and face masks.

Philip Bernard filed one after seeing a sign on a gas station pump touting two-ounce hand sanitizer for roughly $8. That’s the bottle that’s similar to the travel size, which was $1 or less, pre-pandemic.

Bernard also said individual surgical masks are being sold for $6 each.

After Bernard filed his complaint, the state sent the gas station a letter requesting details, like their costs versus what customers are charged.

WREG reviewed invoices submitted by the gas station to the state. One shows what the gas station paid for six-ounce and four-ounce hand sanitizer, but we didn’t see the two-ounce bottles.

It appears the store paid about $1 each for the disposable masks that Bernard said they were selling for at least $6.

Marsalis explained that the state is looking to see whether the store’s markup on items is “reasonable” based on the price the store paid.

And while the answer might be sufficient for the state, consumers we talked to like Bernard, who took the time to file a complaint, don’t know that.

Each of the consumers WREG spoke with said, with the exception of an initial response, they had not received a followup from the state after filing their complaint.

Bernard said, “I got the automated robot response saying that they have received my message and they will look into it, and that was all I got.”

The WREG Investigators have reviewed Consumer Affairs complaints for dozens of stories over the years and typically, the state sends the consumer a copy of the business’ response.

“Not in all cases, can we have a verdict, or something back to them, so our goal is really to try to get that initial letter out to them, we’ve received this and we’re reviewing it,” explained Marsalis.

Here’s a sample letter.

Bernard said, “If they just told me, hey, we called them, or someone walked into the store and spoke with them, I’d be happy that would give me peace of mind.”

Speaking of walking into the store, Marsalis said travel restrictions prevented investigators from physically visiting retailers during the pandemic.

WREG recently checked out the gas station that was the subject of Bernard’s complaint. You could still see shreds of paper where the signs were once posted on the pumps, but those are gone.

On the inside, the store is selling two-ounce hand sanitizer for around $6 and six ounces cost roughly $10.

Overall, Marsalis says, their goal is for businesses to understand the expectations, and for everyone to know they’re not turning a blind eye.

WREG asked, “How important is it for the average consumer to hear that message from you all, because maybe some of them aren’t feeling very protected right now?”

Marsalis said, “Right and I know it’s difficult, especially if there was one complaint filed and we may not be able to get back to them right away, but I can assure you that we’re looking through it.”

The Tennessee Attorney General’s Office reached a settlement earlier this year with two brothers who hoarded thousands of bottles of hand sanitizer and tried to re-sell it.

Other than that, no retailer has faced disciplinary action for price gouging during the pandemic. A Consumer Affairs spokesperson told WREG,”Our goal is to quickly stop the conduct. That is often done by swiftly contacting the company to change the prices without the need for additional disciplinary action.” 

The state’s anti-price gouging law is no longer in effect. However, the state is still accepting complaints. Consumers can file one here.

When will grocers be fully stocked again and when will we see lower prices?

According to the USDA, grocery store prices were 5.6% higher in June of 2020, compared to the same time last year. Beef and veal price alone were roughly 25% higher.

WREG also reached out to several grocers such as Target, Walmart and Kroger about pricing policies.

A Kroger spokesperson said, “Our store shelves have improved drastically. We have more meat and seafood, bath tissue and paper towels available. We are seeing more essential items becoming readily available to us. However, you do have some vendors working to keep up with the consumer demand, for example, Lysol.”

In an email, a Target representative wrote:

There have been no changes to our pricing policies, and we have been consistent in maintaining our everyday low price positioning. At the coronavirus hub, you’ll also find a variety of additional FAQs, and I’d point you to the following portion regarding our inventory, in particular:

  • We know many guests are looking to buy key essentials, and we’re working hard to accommodate increased demand. To ensure as many guests as possible can find the items they need, we’ve taken measures such as:
    • Coordinating stores, distribution centers and suppliers so that the things our guests need most —cleaning supplies, food, over-the-counter medicine and baby products—are fast-tracked through the supply chain and prioritized for re-stocking.
    • Placing limits on products like hand sanitizer, toilet paper, disinfectant wipes, flushable wipes, hand & face wipes, gloves and more. We’ll adjust limits as needed, and respectfully ask all guests to consider their immediate needs and purchase accordingly, so more families can find the products they need.
    • We’re working hard to complete online orders, but due to increased demand, they might be delayed. We apologize for any inconvenience.

What are the best times to shop?

This can be tricky.

Go early – Many consumers have been visiting stores as soon as they open, in hopes of getting certain items. Sometimes this works well as stores have re-stocked overnight or early in the morning. However, some stores have started to spread out their re-stocking in order to avoid chaotic crowds.

Check the customer service counters and middle display aisles – Some stores aren’t even bothering to place cleaning supplies in the normal spot. Shoppers will often find what’s available in one specific area. Some customers have reported finding items behind the customer service counter.

Call the store – Asking the retailer about pricing and re-stocking might provide some good insight on when you should make trips to the store.

Be patient and try again online – Just because an item is out of stock, doesn’t mean it won’t return. It’s time consuming, but trying multiple times could lead to finding what you want.

Price gouging concerns are one thing, but it’s also important for consumers to avoid all-out scams. If the price is too good to be true, don’t buy it. Be cautious with stores and brands that are unfamiliar and difficult to find information about. Also, guard your money and personal information when shopping online.

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