Coronavirus profiteering

Please be aware of this scam of certain businesses are exploiting the current situation. I am not pointing any finger at any SE23 Businesses. If they refuse to charge the lower price just leave it on the counter and vacant the shop and let others know name and shame them through local community forums and report them to the Council Trading Standards (Lewisham) 020 8314 7237 Email: cer@lewisham.gov.uk
See this link https://www.facebook.com/groups/weloveforesthill/ (It is not a SE23 business)

Adjusting prices based on supply / demand isn’t really a scam, as such. No one is forcing us to buy the goods.

I thought whoever was speaking on the video was kind of making a good point. Until right at the end, where he says: “You always rob black people”. What? I think the shopkeeper was an equal opportunity profiteer. I don’t believe the sticky price labels were overwritten with a huge mark up just for black customers, with a differently priced supply for people of other colours… The shopkeeper was going to charge everyone the same over inflated price and the commentator devalued his argument by making it about race.

From what I can tell a product that normally retails at (I think) around £3 was marked up at £6.99. Fair enough, I suppose. Sellers’ market. But then to change the 6 to an 8 by pen is out of order. It’s also stupid. Why not just peel off the old yellow sticker and print a new one. I doubt that many people buy rubbing alcohol with wintergreen on a regular basis.

Indeed. A ‘scam’ implies deception. In this case the prices were clearly labelled for all.

This maybe profiteering, which equally isn’t a good thing, but it’s not a ‘scam’.

Pulling out the race card - a surefire indication that the people making the video have an ingrained victimhood mindset. And the way they were chiding the lone shopkeeper and trying to incite others against him seems like thuggish behaviour.

I fear looting is coming soon to a high street near you …

Hello! Lawyer here! Falsely inflating prices is illegal and can be reported to trading standards.

Out of interest (and without taking anything away from your post), what’s the threshold for an overly “inflated” price, and what’s the test for “falsely”?

There is something in the unfair trading regulations I think?

I saw the guidance against dual pricing, and to be fair, it looks like the shopkeeper in the video probably fell foul of this.

But is it illegal to simply raise prices (assuming the price is raised consistently for all stock of a given product, and that the new price is clearly labelled)?

£9.99 for 2 loo rolls on Amazon isn’t adjusting price Chris, it is profiteering. Remember the fuel blockades and the petrol stations charging £2 a litre. All gone.

If I’ve just run out of loo roll and those are the last two on earth, I’d pay the tenner.

A “fair price” for a good is whatever price someone is willing to pay.

Thankfully there will probably be other people selling loo roll at 50p a roll, and obvs we’d choose those instead. The markets naturally push prices down to affordable levels, but only if there are lots of market sellers competing with each other.

As soon as some authority steps in and starts trying to fix prices, it simply reduces market seller participation.

At times like this, society can’t afford reduced seller participation.

Price gouging is illegal in the US in some circumstances.
“During a declared emergency like the coronavirus crisis, prices are legally frozen and markups to take advantage of desperate customers are considered illegal gouging.

But it’s not gouging if a retailer sells products that are usually discounted at the full retail price.”
Don’t think so in UK.

As a lawyer, and without offering legal advice, are you able to point to the specific legislation?

I’ve searched myself, but I keep coming back to competition law which I don’t think applies here.

My business does deep cleaning and disinfection. I’ve decided we will do disinfection FOC (so the same price as a standard deep clean) during this issue because everyone is suffering at the moment.

I can answer this. They can charge whatever they want with no repercussions.

As Chris said, no one is forcing you to buy it if you don’t like the price. Go somewhere else. The only potential issue is if they were dominant and were an essential supplier (for example a pharmaceutical company which holds the patent to a particular drug). None of the shops are in this category as there are so many different big brands and independent stores. Essentially, if you don’t like their prices - you have the freedom and choice to go to their competitor.

And an additional point- these are small businesses we are talking about who have been struggling for years and now are suddenly in a position where they are desirable and useful again. Why can’t they mark their prices up to reap the benefit of these (surely, one off) times? And they will no doubt be worried they will have to shut down themselves or run out of stock soon, and so will want to make sure they can make a good profit before that day comes. They are also putting themselves at risk by serving members of the public all day long who may be, unknowingly, infected. So fair play to them if they want to mark their goods up - they are only human and need to provide for their own children, pay their rents, mortgage etc

Of course you could pay want you want and companies can charge what they want. But it will he a very short term gain. This will pass and people will remember being ripped off. The companies that are thriving near us are the ones that are supplying goods at the same prices and going out of their way to help people. They will be remembered for all the right reasons.

You’re right. And so the phenomenon is self-regulating. No legal/govt intervention required.

Well I’m not a lawyer and I admit to having not read all the legislation, so I stand to be corrected, but I haven’t yet seen anything that backs up Estelle’s assertion that inflating prices is illegal.

There’s a helpful Q&A here …

Some FAQ that might be relevant …

Quote:
16. Are we allowed to charge whatever price we like?
Usually, you are free to charge whatever price you wish to compete in the market.
However, you must not use pricing in an anti-competitive manner. For example:

you must not use ‘predatory’ pricing, deliberately underpricing your product to drive competitors out of business and discourage new competitors

you must not conspire with competitors to fix prices in a cartel
Unquote

Quote:
20. Do we have to sell products for the price shown if we have made a mistake?

Normally, no. When, for example, a shop displays products and their prices, the shop is not directly offering them for sale but issuing an ‘invitation to treat’: when the customer offers to buy the product, the shop can decide whether to accept or reject the customer’s offer.
You would, of course, need to correct the price once your error had been pointed out. Otherwise you could be accused of displaying a deliberately misleading price and could face legal action. Unquote

Lots more info and links on there.

Of course, we should also bear in mind that wholesale prices may have risen.