A sizzling potato: Regardless of Amazon’s public stance on value gouging, a brand new report highlights a number of key findings that appear to contradict the e-commerce big’s earlier claims. The report finds that the corporate has not solely engaged in value gouging on objects bought instantly by Amazon, however has additionally facilitated inflated costs for third-party sellers, all whereas deceptive the general public and legislation enforcement. The report highlights the necessity for value gouging legal guidelines on the federal stage, and likewise requires Amazon to reform its personal pricing practices.
In accordance a particularity damning report by Public Citizen, Amazon, among the many world’s largest retailers, is being accused of extreme value gouging throughout a worldwide pandemic. As extra folks pivoted to on-line buying amidst stay-at-home mandates, Amazon’s revenue soared — however apparently so did a few of its costs.
Reports of rising prices on Amazon surfaced early on within the pandemic. Amazon claimed it was working with the related authorities to curb a wave of rising costs, eradicating thousands and thousands of things over false coronavirus claims, and even blamed a certain quantity of unsavory third-party sellers on the location.
“There isn’t any place for value gouging on Amazon.”
Amazon even went on a hiring spree to assist meet insatiable demand all through the pandemic, whereas claiming it was persevering with to fight value gouging on the platform. Amazon additionally went so far as to call for federal legislation concerning value gouging legal guidelines.
Nonetheless, in its report, Public Citizen has produced proof that Amazon’s actions might not have been as altruistic as the corporate has let on, regardless of having stated that “There isn’t any place for value gouging on Amazon.”
The “Prime Gouging” report particulars 15 important merchandise which have been bought on Amazon — both instantly by Amazon itself or by third-party sellers — between the months of February and August. The report finds that these merchandise have seen markups starting from 76 p.c to greater than 1,000 p.c.
For instance, in keeping with the report, disposable face masks have seen a surge in value by as a lot as 1,000 p.c. Per the report, a 50-pack of disposable masks was usually out there for round $four earlier than the onset of the pandemic. During the last a number of months, an analogous bundle of 50 disposable masks has been bought for as a lot as $40, instantly by Amazon.
One other notable offense appears to be corn starch, which usually carries a mean value of $0.89 cents for a 6.5 ounce container of Clabber Woman Corn Starch, however has been bought for as a lot as $9 on Amazon. On the time of writing, this merchandise is presently seeing costs between $5.69 and $11.00, with various transport prices.
Third-party sellers account for a good portion of Amazon’s income, as Amazon retains a share of the gross sales. It is a synergistic relationship, the place when Amazon’s sellers are incomes extra income, so is Amazon.
It appears a few of the most extreme costs on objects out there by third-party sellers has been flour, rice, and paper towels, with value will increase of 941 p.c, 641 p.c, and 450 p.c, respectively.
In response to its findings, Public Citizen notes that Amazon’s value gouging is in violation of many state laws that prohibit value will increase of greater than 10 p.c. In concluding its report, Public Citizen is now calling for a unilateral federal legislation to ban value gouging, as on-line buying platforms are sometimes capable of dodge state legal guidelines.
“The absence of a federal legislation, mixed with on-line buying that transcends state borders, has created gaps in safety from value gouging, and has led to the potential for state value gouging legal guidelines to be ineffective at addressing on-line value gouging,” says the report.
Particularly, Public Citizen want to see the next from such a federal legislation:
- Present a transparent and unambiguous definition of value gouging reminiscent of a 10 p.c improve in costs throughout an emergency;
- Embrace a really broad checklist of merchandise, items, and companies that may be lined;
- Set up vital civil penalties enforceable by the Federal Commerce Fee and state attorneys common;
- Apply wherever value gouging happens within the provide chain; and
- Be relevant in the course of the present COVID-19 pandemic in addition to any catastrophe or well being emergency now and sooner or later.
Moreover, Public Citizen’s report is asking for Amazon to reform its pricing and product itemizing practices, which are typically nebulous at finest, and flat out deceptive at worst. To that finish, it is really useful that Amazon not solely publish a complete value historical past of things, but in addition a mean value in addition to the prompt MSRP.
Different suggestions embody instituting a restrict on how a lot an merchandise can elevate in value, ending the observe of making new pages for objects already listed (which makes it onerous to evaluate pricing historical past), in addition to offering a easy and clear manner for shoppers to report issues with a product itemizing.
In a statement to The Verge, Amazon famous that Public Citizen’s report helped to determine plenty of pricing errors, and reiterated that Amazon has eliminated over 1,000,000 listings for suspected value gouging, whereas additionally having suspended some 10,000 promoting accounts.
Picture Credit score: Russ Vance
