Price Gouging During a Pandemic
A vaccine and anti-viral medications have been developed and Corona Virus will be a memory soon. Unfortunately, unethical behavior will continue, business as usual. Unethical business is the subject of this post.
18,000 Bottles of Sanitizer on the Wall
As the world was awakening (but not completely reacting) to the threat of the infection, Matt and Noah Colman of Hixson, Tennessee, jumped in their truck and started taking a 1,300-road trip to every supermarket they could find in the states of Tennessee and Kentucky. They bought up about 18,000 bottles of hand sanitizer at the usual supermarket price.
Price gouging is illegal in just about every state in the nation, especially when the supplies are limited. Matt Colvin should have realized this. As is typical of most unethical individuals, Colvin had to brag about his “purchase.” He had a picture of himself standing in front of part of his stock. The Tennessee Attorney General’s Office got wind of it and opened a price gouging investigation.
As the awakening turned to panic, the Colvin’s started selling hand sanitizers on Amazon. Amazon was also aware of the potential for price gouging and was aware that the Colvin’s were selling the wipes and sanitizers for anywhere from $8 to $70 dollars a unit. As the scheme was taking off, Colvin admitted it was “crazy money” as the willing buyers were pouring money into their account.
Initially, Matt Colvin defended himself by saying he was engaging in a public service, as opposed to simply leaving the product on the shelves and allowing 18,000 buyers to purchase the product as regular retail pricing.
Colvin is quoted as saying “If I can make a slight profit, that’s fine, but I’m not looking to be in a situation where I make the front page of the news for being that guy who hoarded 20,000 bottles of sanitizer that I’m selling for 20 times what they cost me.”
However, that’s exactly what the Colvin’s were doing.
As the Tennessee Division of Consumer Affairs stepped in, they issued the following statement:
“We will not tolerate price gouging in this time of exceptional need, and we will take aggressive action to stop it. During this pandemic, we ask that you report suspicious activity…and refrain from threatening or hostile communication with individuals or businesses you may suspect are price gouging. Our team will review complaints closely and we are prepared to act to protect Tennesseans.”
As of March 15, 2020, Colvin agreed to donate the supplies of hand sanitizers to first responders and a church, presumably for distribution to the needy.
Won’t be the last…
For a while, the Colvin’s were vilified. However, they are hardly unique. Price-gouging and unfair profiteering have gone on for the millennia. For example, in fairly recent history, we can see cases of attempted price gouging in the gasoline shortages of 1974 and 1979. The fraud follows the basic laws of any pattern of unethical people.
There was clearly a lack of oversite here which is still continuing as we speak. The supermarket chains themselves are partially to blame. When the Colvin’s walked into stores and cleaned the shelves, many of the employees of those stores might have been thinking “profits,” but clearly executive management should have imposed limits. Right now, there are massive shortages of toilet paper – a totally fake crisis, caused by consumers purchasing obscene amounts of product. It could be stopped until panic buyers realize that supplies can be replenished once calm sets in and manufacturers catch up.
The Colvin’s need was pure greed. They saw huge profits, even though those profits were made on the backs of many of those least likely to afford to pay.
Finally, there was rationalization. The Colvin’s might have seen the opportunity and thought, “If we don’t do this, someone else will.” It is the most unethical response of all because it assumes that most people, if given the chance, are will cheat and profit from misery. I, for one, am not that cynical.
Perhaps the most ironic thing of all is that nothing beats soap and water to prevent the viral spread. Hand sanitizers are effective but for the second they are used. I note adequate quantities of hand soap in my supermarket and all at normal pricing.
While we have never faced a viral infection of this nature, we have certainly faced fraud. It comes in many forms and we must be aware that behind every fraud there are individuals who are all too happy to profit. The Colvin’s were but two of them.
LEAVE YOUR COMMENTS!
