The Answer Column: What Is Price Gouging And How Is It Determined?


By Carol Tannenhauser

Several readers have written in asking for an explanation of price gouging. The possibility for it happening obviously exists as certain items in great demand because of the coronavirus pandemic have become scarce and more costly.

Question: Kay McFadden wrote: “WSR: Please dig a little to let us know how the city determines price gouging. Do inspectors look at the wholesale prices that the business paid for certain items and then what the retail was to customers? Or does the city use some kind of average pricing sheet to determine over-charging?”

Answer: On March 16, 2020, the NYC Department of Consumer and Worker Protection (DCWP) announced an emergency rule that made illegal “price gouging for any personal or household good or any service that is needed to prevent or limit the spread of or treat the new coronavirus (COVID-19),” it said in a press release. Examples of such products include:

Cleaning products
Diagnostic products and services
Disinfectants (wipes, liquids, sprays)
Face masks
Gloves
Hand sanitizer
Medicines
Paper towels
Rubbing alcohol
Soap
Tissues

“It is illegal to increase prices of these types of goods and services by 10% or more,” the release stated.

Exception:

If you raised the price of these items because it costs you more to supply them, you must provide proof to DCWP.

Be aware that any increase must be comparable. If you paid $2 more per item, you cannot charge customers $50 more.

Were you overcharged? If you think a store excessively increased the price of these items beginning in March, file a complaint online or call 311 and say “Overcharge.”

Read more of our Answer Columns here.

COLUMNS, NEWS | 14 comments | permalink
    1. m.pipik says:

      Fair enough.

      So what happened at Thomas Drugs? Did the inspectors not ask for the purchase receipts? Did the manager not have access to the receipts?

      Were stores previously made aware that they have to provide documentation for increases and that they should have copies of the relevant purchases on hand?

    2. Mark Moore says:

      Mani has big bottles of hand sanitizer for $5.

    3. G says:

      do our federal taxes count as price gouging now?

    4. Marion Thunberg says:

      Toilet paper???

    5. Ish Kabibble says:

      The market on 74th and Amsterdam charged me $18 for a 3-pack of masks. Not sure if that qualifies, but I would think it does. I’m all for supporting small businesses, but I thought this was awful. Full disclosure: I reluctantly made the purchase.

    6. PTFLynn says:

      IMO Amazon resellers and other online sellers are the worst offenders. The feds should shut them down and/or fine them with big $$$ penalties.

      • BG says:

        Amazon bans sellers from price gouging and one can report possible offenders to Amazon.

        • lynn says:

          When I couldn’t find TP in my neighborhood I took a look at Amazon and came across an 8 pack of Charmin labeled available/ready for shipping, but in the notes it stated that the package or the contents may be damaged. Funny but not funny. Is Amazon so big that they’ve completely lost control of their 3rd party sellers?

        • Gabe says:

          Amazon doesn’t allow price gouging? Go to Amazon and search for toilet paper. Let me know when you find the way to report price gouging to them (hint, you can’t because they’re dipping their fingers into that profit too)

    7. Kathleen says:

      Interesting toilet paper not on the list. Just saying.

    8. Suzanne says:

      3 weeks ago a dozen eggs at West Side Market was 1.99- yesterday they were 4.99
      Just like to know why? Maybe staff or delivery costs have skyrocketed?

    9. DR LAZARUS LAZARUS says:

      cvs rite aid columbus ave 96st amsterdam 96 st price gouging toilet paper pack of 4 20 bucks

    10. Tovah says:

      Matto coffee such a nice place is charging $30 for a box of masks and -$15 for latex gloves. I was surprised.