BBB Reminds Consumers False Advertising and Price Gouging is Illegal
Columbus, OH (March 24, 2020) – As government officials, news outlets and health officials are keeping the public appraised of the COVID-19 situation, consumers are finding the cost of high-demand items, such as hand sanitizers, tissues, face masks and other products skyrocketing.
Over the last few weeks, Better Business Bureau received reports from consumers about the frequency of scams involving these items and fake cures. Now, state attorneys general offices may need to initiate state price-gouging laws, which will automatically go into effect during a declared state of emergency in order to prevent businesses from overcharging customers who are preparing to take preventative measures from getting sick.
Price gouging is a term referring to when a seller spikes the prices of goods, services or commodities to a level much higher than is considered reasonable or fair and is considered exploitative, potentially to an unethical extent. The best way to avoid price gouging is to plan ahead and have the necessary supplies you need on hand.
BBB warns businesses to avoid the temptation to raise prices during a situation such as a storm or a pandemic because it may be illegal to do so in certain states and because it erodes marketplace trust. Consumers will remember which businesses took advantage of them during a pandemic.
Anyone who suspects price gouging during a declared state of emergency should report it to Better Business Bureau by filing a complaint or to BBB Ad Truth. BBB has also established a Facebook group called Stop Price Gouging in Ohio where consumers can alert each other to price gouging activity that they see. Consumers also have the option to report the activities to the state attorney general’s office.
When reporting a price gouging complaint, gather as much information as safely possible and follow these three tips:
- Be as specific about the transaction as possible, including the name and address of the business, names of any employees involved, and information detailing the spike in pricing.
- Gather together documentation supporting the price gouging (receipts, photos of products and their advertised pricing, invoices, etc.)
- Compare pricing of similar products with other sellers in the area as well as online. It’s important to note similarities and differences between brands, size/quantity, manufacturers, model numbers, and prices.
The BBB adapted its standards for marketplace trust to the coronavirus pandemic:
- Build Trust—Refrain from taking unfair advantage of a public emergency such as the coronavirus situation. As much as possible, keep prices at a reasonable level. Consider your daily operations as business-as-usual but with the adjustments required to help prevent the virus from spreading.
- Advertise Honestly—Do not fuel fears. More than anything, you need to act as a calming and reassuring partner to your customers. Continue with standard ethical advertising practices but add a reference that you’re following public health protocols to stem the transmission of the virus.
- Tell the Truth—The virus may impact deliverables. Be honest with your customers regarding timelines and product availability. Set realistic expectations if your delivery or service is impacted by illness or precautions. Set clear expectations with your customers. They will respect that you are thinking about them and taking this seriously.
- Be Transparent/Honor Promises—If you are unable to fulfill commitments, communicate immediately with your customers, rather than disappointing them and having to rationalize the reasons after the fact. Work with your customers to find solutions.
- Be Responsive/Embody Integrity—Demonstrate purpose and support for your community. Businesses can play a vital role in maintaining strong communities, even in challenging times.
Better Business Bureau is a community based resource, a trusted advisor, and a partner in business. BBB exists to advance Trust in business and believes that businesses who embrace Trust as a core principle in their organization will see that it leads to growth in employees, customers, community and their bottom line. Through evaluation and Accreditation, education and training, and celebrating great role models, BBB builds a community of like-minded businesses and loyal customers. BBB believes in the power of trust to grow people, businesses and communities.