Price Gouging

Updated on August 3, 2020

Dear Consumer Ed: 

I see stores charging exorbitant prices for groceries, toilet paper and hand sanitizer.  One store I went to is charging $11 for six rolls of toilet paper and $6 a pound for ground beef. Isn’t this price gouging?  

Consumer Ed says:

Maybe. The answer depends on a number of factors.  Under normal circumstances, competition and demand drive prices in our free-market economy. However, during a declared State of Emergency in which the Governor has activated the price gouging statute, Georgia law prohibits businesses from selling, or offering to sell at retail, any goods or services identified by the Governor at a price higher than the price at which they were sold or offered for sale before the State of Emergency. Price increases on goods or services are permitted only if they accurately reflect an increase in the cost of new stock or the cost to transport it, plus the retailer's average markup percentage applied during the ten days immediately prior to the declaration of a State of Emergency. It can be difficult for a consumer to discern whether an increase in a product’s price is due to price gouging or whether it is the result of a seller raising prices because its supplier is now charging more to meet an increased market demand.

The current State of Emergency in Georgia, which went into effect on March 14, 2020 and has been extended through 11:59 pm on September 10, 2020, prohibits price gouging of goods and services necessary to support public health. Most groceries, toilet paper and hand sanitizer would qualify as goods necessary to support public health.  This means, for the most part, the store may only increase the price of these products as much as the store’s cost on these products went up.

If you think a business has committed price gouging or is in violation of Georgia’s Fair Business Practices Act you can report it to the Georgia Department of Law’s Consumer Protection Division by going to consumer.ga.gov or by calling 404-651-8600 or 1-800-869-1123 (in Georgia but outside the Metro Atlanta calling area).

Submit your own question to Consumer Ed.  Remember…we do not give legal advice. Always consult a lawyer about legal issues.

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