Price gouging still “very much an issue” on Amazon

Price gouging on Amazon’s marketplace remains “very much an issue” despite widespread attempts from the retailer to crack down on the phenomenon.

Amazon’s marketplace is still rife with examples of price gouging on essential items, according to new research published by the US Public Interest Research Group (PIRG).

The non-partisan consumer advocacy organisation compared the pre-pandemic prices of over 750 items which have become essential during lockdown, including face masks, hand sanitiser and computer monitors, to their prices at the end of 2020.

It found that 409 of the 750 items had seen prices rise by an average of 20 per cent, but many items had seen far greater price hikes since March, including 136 items which doubled in cost.

Amazon has repeatedly come under fire for allowing major cost spikes on key items, but the retailer says it has removed millions of items and tens of thousands of bad actors which it suspected of price gouging, alongside millions items making false medical claims.

READ MORE: Amazon sellers fined and forced to refund customers $23,000 after price gouging hand sanitiser

In November, three third-party Amazon sellers were forced to pay fines of $52,000 and refund customers nearly $23,000 after being found to have sold thousands of units of hand sanitiser at “grossly” inflated prices.

While the most extreme cases of price-gouging have largely been addressed, PIRG says hundreds of products have had less dramatic but far longer-term levels of cost increase.

Using data from Keepa, PIRG found that the prices of 80 per cent of disinfectant wipes had risen by more than 20 per cent, while 66 per cent of cloth face masks rose by the same amount.

“What we found was that while Amazon is taking measures to crack down on price-gouging on their site, it is very much still an issue,” the study’s author Grace Brombach said.

“Amazon has blamed third-party sellers, for the most part, when it comes to price gouging. And so I think it’s important to show that there were cases where Amazon was the supplier of these products that were seeing these massive price spikes.”

In response to the report, Amazon said: “We have a longstanding policy against price gouging, have processes in place to proactively block suspicious offers, and monitor our store 24/7 for violations,”

“In 2020 alone we blocked or removed over 39 million offers and suspended more than 13,000 selling accounts for attempted price gouging.

“We also referred the most egregious offenders to federal and state law enforcement, have worked with more than 40 state attorneys-general across the country to prosecute bad actors, and advocated for a federal price gouging standard.”

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