To avoid getting taken for a ride, consumers should shop around and compare prices across multiple retailers. (Photo: Ethan Miller/Getty Images)
Price gouging on Amazon AMZN, -1.85% remains a problem despite the online marketplace’s stated commitment to tamp down on the practice, two new watchdog reports claim.
Six months into the coronavirus crisis, products have sold on Amazon for between two and 14 times pricier than identical products sold elsewhere, according to a U.S. PIRG Education Fund analysis of 10 “essential” household products.
“There’s a certain rise in price that can be attributed to supply and demand, but when we’re seeing price increases of two to 14 times as much as the product that’s being sold on other major retailers for much lower prices, it becomes hard to attribute that to demand — and that’s price gouging,” report co-author Grace Brombach, a consumer watchdog associate, told MarketWatch.
For instance, PIRG identified an Amazon listing for a 40-count canister of Wet Ones antibacterial wipes for $27.60 — almost 14 times costlier than the same product sold by Walmart WMT, -0.08% ($1.98) and Target TGT, +1.10% ($1.99). A 12.5-ounce bottle of Mrs. Meyer’s Clean Day hand soap ran for $20.89 on Amazon, compared to $3.88 at Walmart and $3.99 at Target.
A six-pack of Bounty Doubles select-a-size rolls, meanwhile, sold for $58.80 on Amazon, compared to $9.98 at Walmart and $11.99 at Kroger KR, -1.06%. A Vicks SpeedReed digital thermometer sold on Amazon for $29.99, while Walmart and Target sold the same product for $9.72 and $9.99, respectively.
“ ‘People are struggling right now. They may go to Amazon as their one-stop shop, and they shouldn’t have to see these prices or be charged these prices for essential products.’ ”
Amazon must live up to its Marketplace Fair Pricing Policy and make sure consumers aren’t being charged several times the prices of other retailers during a pandemic, Brombach said.
“People are struggling right now,” she said. “They may go to Amazon as their one-stop shop, and they shouldn’t have to see these prices or be charged these prices for essential products.”
The PIRG analysis didn’t distinguish between products sold by third-party sellers and those sold directly by Amazon, focusing instead on products sold by Amazon versus by other retailers, Brombach said. The watchdog previously took Amazon to task for price surges on surgical masks and hand sanitizer at the beginning of the pandemic.
Reached for comment on the PIRG report, an Amazon spokesman told MarketWatch, “There is no place for price gouging on Amazon and that’s why our teams are monitoring our store 24/7 and have already removed over a million offers for attempted price gouging.”
“We are disappointed that bad actors are attempting to take advantage of this global health crisis and, in addition to removing these offers, have suspended more than 10,000 selling accounts. We have referred the most egregious offenders to federal and state law enforcement across the country to hold them accountable,” the spokesman said. “We continue to actively monitor our store and remove offers that violate our policies.”
Amazon this past spring also condemned price gouging and called for federal legislation to combat the practice.
PIRG found “higher-than-average prices” in other places too, including at the grocer Giant Eagle (a “sale” price of $34.99 for boxes of 50 three-ply face masks, in contrast to comparable products sold for $9.75 on Amazon and $14.99 by Walmart) and CVS CVS, -1.03% ($18.49 for a 225-count bottle of Motrin, which Amazon and Walmart both sold for $12.96).
“We’re calling on all states who don’t currently have price-gouging legislation to pass laws that will expand the scope of emergency products during state emergencies, and also set limits on what companies and sellers can charge for necessary products during these emergencies,” Brombach said.
In a statement, Giant Eagle spokesman Dan Donovan told MarketWatch that “making a variety of personal protective equipment available for purchase at an affordable price for our guests is critically important.” The majority of the retailer’s face-mask selection is sold in smaller quantities priced from $5 to $15, he said, and its 50-pack box retailing at $34.99 comes out to about 70 cents a mask.
“As a regional retailer, we work closely with our supply partners to secure as much of these needed items as possible at the best value, and believe that the prices we offer to our guests are competitive with similar supermarket retailers,” he said. “Across our stores, guests will find dozens of different facemasks [sic] options including both disposable and reusable face masks that are sold individually and in multi-packs.”
Walmart, Kroger and CVS didn’t return MarketWatch requests for comment. A Target spokeswoman did not immediately provide a comment.
“ ‘It is clear that not only are third-party sellers engaged in price gouging, but Amazon itself is selling essential products at significant price increases, and in many cases at a much higher price than other national retailers.’ ”
A second report, by the consumer-advocacy nonprofit Public Citizen, also skewered the e-commerce giant for apparent price-gouging, delving into 15 “essential products” sold by Amazon in recent months with markups as high as 1,010% over the recent Amazon.com price or the price from other retailers. It also identified 10 products from third-party sellers going for price increases of up to 941%.
The organization alleged that Amazon had “misled the public, law enforcement, and policymakers” about pandemic price hikes, and that it was not just “a victim in the price gouging on its marketplace” but “a perpetrator.”
“Amazon’s leadership has made clear that they do not tolerate price gouging and that they will stop third-party sellers from taking advantage of the pandemic,” report author Alex Harman wrote. “However, it is clear that not only are third-party sellers engaged in price gouging, but Amazon itself is selling essential products at significant price increases, and in many cases at a much higher price than other national retailers.”
Public Citizen called for a far-reaching federal price-gouging law, as well as pricing and product-listing reforms by Amazon.
In response to the Public Citizen report, the Amazon spokesman told MarketWatch: “As we have said, there is no place for price gouging on Amazon and that includes products offered directly by Amazon. Our systems are designed to offers [sic] customers the best available online price and if we see an error, we work quickly to fix it.”
To avoid getting taken for a ride, consumers should shop around and compare prices across multiple retailers, Brombach said. If you feel safe shopping at stores in person, you may find prices much lower than what you see online, she added.
“By knowing what the average price is for essential products, you can compare the cost-per-unit price between retailers and find the best option for you,” Brombach said. You can also use the website Keepa to track the price history of Amazon products for free.
And especially while shopping on Amazon, be sure you’re not buying something that has been parceled out from a bulk product and sold at a higher price, Brombach said.
“A lot of times, people may see that [high price] and assume that it couldn’t possibly be that much for one roll of toilet paper,” she said. “They might buy that product expecting more, but they won’t receive more — it’s just price gouging.”
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