We live in a capitalist society, so consumers are accustomed to the rise and fall of prices.
A dozen roses will cost more just before Valentine’s Day. Gas prices often jump ahead of and during vacation season.
Price surging often happens when people procrastinate.
In the days just before the solar eclipse, the glasses needed to safely view the phenomenon skyrocketed. I paid $8.95 for a five-pack of certified glasses two weeks before the solar eclipse. The day before the price of that same pack jumped to $59. I checked this week, and it was down to $9.95.
It comes down to supply and demand. When demand is high, business folks know they can often charge more for goods and services. Desperate people will pay.
But there is something unseemly when businesses capitalize on catastrophic events such Hurricane Harvey and Irma.
It’s called gouging and it’s despicable.
As the rush to get out of the way of Hurricane Irma intensified, people took to Twitter to complain about price increases for airline seats.
In one tweet, a consumer appears to have three or four grocery carts full of cases of water. Prompting the following tweet:
Many states have anti-gouging laws when a state of emergency has been declared. But this still doesn’t stop price surging.
A number of people reported stores pumping up prices during Hurricane Harvey.
“One station sold gas for a whopping $20 a gallon,” reported The Washington Post’s Kristine Phillips and Hamza Shaban. “A hotel reportedly charged guests more than twice the normal rate. One business sold bottles of water for a staggering $99 per case — more than 10 times some of the prices seen online.”
Best Buy apologized after one of its stores was selling a 24-pack of bottled water for a $42. The company said it was “clearly a mistake on the part of a few employees at a single store.’’
So when does supply and demand cross over to gouging? When you’re taking advantage of people during a disaster.
Color of Money question of the week
Do you think businesses have a right to raise prices to capitalize on shortages during a disaster? Send your comments to firstname.lastname@example.org. Please include your name, city and state. In the subject line put “Price Surge” in the subject line.
Live Chat Today
I’m live every Thursday from noon (ET) to 1 p.m. to take your personal finance questions. This week my guest will be Lanta Evans-Motte, a Maryland-based financial adviser with Raymond James Financial Services. She is a licensed insurance agent, and Registered Financial Consultant (RFC). A financial educator and financial literacy advocate for more than 20 years, she co-founded a Youth Savings & Investment Club in 2006.
Evans-Motte will be available to take your retirement and personal finance questions. To join the discussion or read the transcript if you can participate live clicks this link.
Color of Money columns this week
Knowledge isn’t power. The right knowledge is power.
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Have a question about your finances? Michelle Singletary has a weekly live chat every Thursday at noon where she discusses financial dilemmas with readers. You can also write to Michelle directly by sending an email to email@example.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read more Color of Money columns, go here.