Anti-Gouging Laws and Why You are out of Toilet Paper?

If you can’t find any toilet paper, you aren’t alone. Across the nation, grocery stores have barely been able to keep up with the demand for products like toilet paper, hand sanitizers and food, which has led to massive shortages. Perhaps these shortages could’ve been avoided had stores been able to raise prices, as to discourage hoarding. As the coronavirus pandemic continues to spread, price gouging laws should be reexamined to avoid future shortages.

As the news came out that states like Washington were hit hard with coronavirus cases, consumers took to the stores, stockpiling essentials. In a matter of days, stores experienced massive shortages of basic necessities. And while some were lucky enough to grab the necessary supplies, many of those supplies went to those that came first, while those that came late got the short end of the stick. 

And while panic buying certainly played its role in creating these shortages, price gouging laws certainty haven’t helped. 

Since most states have anti-gouging laws, stores are forbidden from raising prices more than 15 percent during emergencies. While the intent of such laws is admirable, as it is supposed to help people to avoid getting taken advantage of, the reality of these policies can create more problems than they solve.

For starters, without price gouging laws, shortages typically occur due to panic buying. If prices remain the same during emergencies, consumers are likely to overbuy and stockpile, leading to the shortages like the ones we are seeing now. And while telling people not to overbuy is good advice, often the warnings don’t make a difference as people often ignore it and stockpile regardless. 

Surely there is a better solution than to raise prices? One idea would be to impose quotas, that way stockpiling doesn’t occur. As the pandemic grew, many stores on their own started limiting the amount of supplies people could buy, but this too isn’t a bullet proof plan. For instance, this doesn’t stop people from going to the store again and buying toilet paper, or a husband and wife splitting up before they reach the register just so they can buy twice the amount of hand sanitizers. More so, quotas don’t tell suppliers that demand for products have increased, causing them not to ramp up production on necessary items.

Instead, had stores been able to raise prices above the typical 15 percent, many people would have thought twice before buying more than they can handle. For the family that already had toilet paper at home, perhaps they would’ve waited, while families that didn’t have any would’ve been happy to pay a little extra. Higher prices would’ve also deterred people trying to make a profit reselling toilet paper, like those in California that were selling toilet paper for more than 20 times the normal price, as their profit margins would’ve been lower. 

Of course, the perfect solution would be to have everyone only buy what they need without having to change prices. And while some acted this way, people often need higher prices to signal that hoarding shouldn’t be encouraged and to ensure that enough remains for everyone.

As America experiences shortages nationwide, it’s important to remember to pitch in and help those in need. For those that overbought on necessities like toilet paper and cleaning products, consider donating them to a neighbor or food center that could use them. For store owners, consider allowing exceptions for customers that have been laid-off or people that need extra assistance.

For families across the U.S., life has gotten a bit harder due to the pandemic. On top of shelter at home mandates and layoffs, shortages will only continue to hurt American families. Yet perhaps shortages could’ve been mitigated had stores been able to raise prices, ensuring enough supplies would be available. States should re-examine their price gouging laws to ensure the maximum amount of people get the supplies they need, because the last thing anyone wants to run out of is toilet paper. 

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