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Fight Price Gouging

When is an increase unfair?

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Fight Price Gouging

There is ample evidence that tragedy brings out the best in many people. Millions around the world opened their homes, their wallets and their hearts to help victims of Hurricane Katrina and the tragic flooding in New Orleans back in 2005.

But in a few people, such calamity brings out greed and contempt for ethical behavior. We saw it with Katrina in 2005 and Hurricane Ike in 2008.

I'm talking about the innkeeper who boosts room rates to ridiculous extremes to take advantage of an emergency. What about the gas station owner who triples the price of fuel because people are in a panic buying mode? There have been wholesalers who hold back bottled water and other needed supplies to create a "shortage" that will make prices higher and profits fatter.

With supply and demand, prices are going to rise during emergencies. That's not the issue. It's the gouging of the buying public with price levels far beyond what market forces dictate.

Again, let me emphasize that these kinds of practices are much more the exception than the rule. The vast majority of people who own businesses work hard to keep prices reasonable for their customers.

Yet examples abound of price gouging in the wake of tragedy. Consider what happened in Atlanta in the days immediately after Hurricane Katrina.

There were reports gasoline went from $2.59 USD/gallon to nearly $6/gallon in one day. There is no way that is anything but price gouging. Georgia's governor enacted an executive order preventing stations from selling gas "at unreasonable prices."

That presents us with a simple question: What is price gouging?

It is not a sudden, unpleasant increase in price. Many stations were forced to pay 30 additional cents per gallon for fuel once the effects of Katrina started cutting supplies. It is standard business practice for them to pass that cost on to consumers.

But a retailer who prices fuel well above the average level for a given area has some explaining to do. One way to determine that amount is the Daily Fuel Gauge Report from the Automobile Association of America.

Most states define price gouging as "taking unfair advantage of the consumer," or words to that effect. You probably won't be able to prove it at the pump. But you can save receipts, take digital pictures, and pass along the information to investigators.

It must be said that the vast majority of price gouging complaints result in little or no action. But that doesn't mean consumers should simply ignore it.

Click "next" to the right for some reporting options.

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