As the spread of the novel coronavirus strips store shelves of hand sanitizer and other products that ward off germs, opportunistic hustlers on the internet second-hand market are selling the scarce and coveted items at extreme markups.
On the Bellevue-based online marketplace OfferUp.com, a Seattle-area seller this week listed a dented, one-third used bottle of Germ-X sanitizer for $20, twice what someone would pay at a retail store for a full bottle. Another was peddling an unused, 2-liter bottle of hand sanitizer for $150. The same item was priced at $6.98 at Sam’s Club and $10.74 at Walmart — though they were all sold out.
Thousands of similar listings have been posted locally and nationally on OfferUp, which offers a Craigslist-like service allowing people to sell their own items online, with many sellers demanding inflated prices for sanitizer, surgical masks, toilet paper and other items now in short supply amid the COVID-19 pandemic.
On Friday, California’s attorney general sent a letter to OfferUp CEO Nick Huzar warning that allowing sellers on the platform “to capitalize on the current public health crisis” could be a crime under that state’s prohibition on price gouging during a declared state of emergency. Identical letters went to other big tech companies, including Amazon, eBay and Facebook.
The blatant price hikes have angered Jo Anna Click of Tacoma, one of at least 11 people who has filed consumer complaints against OfferUp with the Washington Attorney General’s Office. Click has been taking screenshots of the high-priced items and says she’s flagged more than a hundred listings for the company, but has seen little action. She has even messaged individual sellers to tell them they’ve been reported.
“It’s ridiculous,” Click said, pointing to signs that some people are snatching up hard-to-find items in stores, in order to resell them at exorbitant prices. “Unfortunately, there are people who are willing to pay it, because they are desperate and scared,” she said. Meanwhile, Click said she has been unable to buy items including rubbing alcohol needed for shots taken by her husband, a sheriff’s deputy.
Nathan Garnett, general counsel for OfferUp, said in an interview Friday the company has been working hard to tackle the problem, relying both on customers flagging overpriced items and its own team of programmers. He said the company has experience removing banned items, such as guns, from its marketplace, but examining price gouging for items like sanitizer is new territory.
“We are working hard to make it better,” Garnett said. “We’re better at this today than we were yesterday and we are going to be better at it tomorrow than we are today.” He added that the company had taken action on every consumer complaint forwarded to it by the state attorney general’s office.
Washington Attorney General Bob Ferguson’s office had received 170 coronavirus-related price-gouging complaints as of Friday. Amazon has had the largest number — 45 as of the middle of this week, perhaps no surprise for the largest online retailer. Other complaints were spread out among different online firms such as OfferUp, as well as traditional grocery and drug stores, mini-marts and gas stations. Due to technical problems, the attorney general’s office was not able to provide copies of all the complaints to The Seattle Times as of Friday.
Amazon did not respond to messages from The Seattle Times seeking comment, but in a public statement earlier this month the company said it already had blocked advertisement of thousands of overpriced products, including hand sanitizer and surgical masks. A review of hand sanitizer, respirator masks and toilet paper on Amazon on Friday found the prices to be comparable to the normal retail cost.
To curb price gouging on its online marketplace, eBay earlier this month prohibited the sale of hand sanitizer, disinfectant wipes and surgical masks. But on Friday, six rolls of toilet paper were listed on eBay for $40, a four-fold markup. Eighteen prospective buyers viewed the listing per hour, according to eBay.
OfferUp, a fast-growing startup founded in 2011 that now has 280 employees, had not yet followed some other companies in banning sales of such products, but Garnett said Friday afternoon “that’s certainly a step we’ve considered taking and may take in the future.”
About an hour later, Garnett called back and said OfferUp would cease all sales of hand sanitizer, toilet paper, disinfectant wipes and protective masks.
In an interview, Ferguson said his office has opened multiple investigations into price-gouging allegations in Washington, including sending investigators to stores to follow up on consumer complaints, and issuing multiple subpoenas for business records. He would not identify the companies being probed, citing his office’s standard policy against naming firms prior to completion of investigations.
Garnett said he is not aware of any subpoenas targeting OfferUp and stressed the company has a history of cooperating with law enforcement and attorneys general.
While Washington’s Consumer Protection Act gives Ferguson’s office wide powers to enforce penalties against businesses engaged in deceptive or unfair practices, the state does not have a specific law prohibiting price gouging during declared emergencies. Conversely, California’s anti-gouging law bans raising the prices of many consumer goods and services by more than 10% after an emergency has been declared, with violations punishable by up to a year in jail and a fine of $10,000, plus civil penalties.
Ferguson said his staff is studying the issue and that he plans to propose similar legislation here.
“I’ve got a 91-year-old mother. If she needs some hand sanitizer, she shouldn’t have to pay 50 bucks. It’s critical for her health,” he said. “From my standpoint, not only is it illegal to be price gouging in this emergency, it’s immoral as well.”
Stores in Seattle and nationwide have struggled to keep antiseptic products in stock during the coronavirus emergency. Even retail giants such as Walmart and Target have listed many of the germ-fighting products people covet as out-of-stock on their websites.
So, desperate shoppers have turned to the online second-hand market. There, consumers can find ads such as one listed on OfferUp by a seller in Texas who normally peddles rare watches but aims to cash in on the sanitizer bonanza by offering two 1-ounce bottles of Purell for $19, plus $7.49 for shipping to Seattle. At retail stores, the same set costs less than $2. An OfferUp seller in Los Angeles, whose avatar was a picture of hand sanitizer and who only this month joined the online-sales site, advertised a 12-ounce bottle of Purell Thursday for $50 (including shipping). In a retail store, it would cost $8.
Tabatha Kritch of Puyallup says she’s spent days driving to multiple grocery stores around her home, just trying to buy necessities like toilet paper and Lysol disinfectant for her family. When she looked online, Kritch saw people selling many of the same items at exorbitant prices through reselling sites, including OfferUp. She said she’s seen people selling 12- or 24-packs of toilet paper for $50.
“I am thinking about installing a bidet in my house,” Kritch said.
She filed a complaint with the Washington Attorney General and flagged troubling listings for companies including Amazon, LetGo and OfferUp.
“Amazon at least responded and said they appreciated it,” she said.
Melissa Dow of Shoreline says she also complained to OfferUp and to the attorney general after seeing outrageously priced sanitizer, including at least one listing that appeared to make misleading claims about its effectiveness in killing viruses.
“I don’t know how these platforms can monitor themselves, but you’d think they could crack down,” she said.
While some are trying to make a fast buck on the product shortages, others are simply trying to help. In addition to the overpriced items listed online, OfferUp featured numerous listings in and around Seattle for greatly reduced, and even free, hand sanitizer.
OfferUp says it has investigators who work “with our partners at law enforcement agencies across the country to identify bad actors, remove them from our marketplace, and help local police and prosecutors bring them to justice,” according to a job advertisement seeking a senior investigator who’d receive an annual salary between $104,000 and $170,000.
The price hikes observed on OfferUp and elsewhere are occurring at a time that many who need or want the products can least afford them. Government-ordered shutdowns of businesses including bars, coffee shops, gyms and hairstyling spots, and restrictions on in-person dining at restaurants have devastated entire industries and overwhelmed Washington’s unemployment insurance claims system, all as a result of the coronavirus pandemic.
In the letter issued Friday to OfferUp CEO Huzar, California Attorney General Xavier Becerra provided recommendations for curbing exploitative prices on the platform and implored OfferUp to provide the attorney general’s office with information about any steps it had taken to date to stem the practice.
“During this difficult public health emergency, it is imperative that we do not allow unscrupulous sellers to take advantage of vulnerable populations by price gouging on essential medical supplies or household goods,” Becerra wrote.
Staff researcher Miyoko Wolf contributed to this report.