Price-Gouging and Product-Hoarding


In cases of extremely short supply or high demand, sellers may attempt to profit from the scarcity of essential products and services. This can occur during a natural disaster, public health emergency, or another declared emergency. Sellers may drastically raise prices for goods and services. Some may hoard products to sell later at inflated rates. 

Many states have enacted laws to combat price gouging for at least some products. These laws may limit price increases above a certain threshold, prohibit unreasonable prices, or restrict price increases above and beyond a rise in underlying costs. The federal Defense Production Act also prohibits hoarding materials the president designates as scarce. However, these protections do not always cover all situations. The sale of nonconsumer goods (such as businesses needing personal protective equipment) and the actions taken by suppliers or third-party sellers, including in online platforms, may not be protected. These exclusions make it more difficult to prevent and prosecute price gouging and product-hoarding practices. 



Access to essential products and services in emergencies

Policymakers and the private sector should ensure affordable access to essential products and services during declared emergencies. Policymakers should put in place effective prohibitions on price gouging for the duration of the emergency. They should also consider subsidizing the cost of producing essential products and services. 

Retailers and online platforms should take active steps to eliminate price gouging and product-hoarding practices.