CHICAGO (CBS) — The Illinois Attorney General’s office has received more than 900 complaints about price gouging during the past couple weeks. Stores are bearing the brunt of the blame, but CBS 2 Morning Insider Tim McNicholas learned the issue of pricing can be a complicated one.
The California Food Mart in Logan Square still has hand sanitizer during the COVID-19 outbreak. The only problem is they charge $16.99 for 8 ounces, or $7.69 for 1.8 ounces.
We asked employees about that and they said their supplier, a wholesaler, jacked up their prices; so the store charges more to make up the cost.
“That’s totally believable,” said Rob Karr, president and CEO of the Illinois Retail Merchants Association.
Karr said he’s heard of other stores running into similar problems.
“The retailer is, more often than not, reflecting the price that he or she is being charged,” he said.
The attorney general’s office said, as they investigate complaints, they’re hearing the same excuse from other businesses. If retailers can justify their prices by showing an invoice, or proving the supplier raised their prices first, then the store’s high prices are legal.
“Retailers do have to make up their costs, right? They’re not a charity. They have to pay their employees, pay their employee benefits, pay their rent, pay their taxes just like anyone else,” Karr said.
We asked the attorney general’s office if they’re cracking down on wholesalers and suppliers. They said they are tracing complaints back, and they’re looking into some suppliers too.
But Karr said even wholesalers and suppliers could be charged more by manufacturers trying to make up for overtime costs and other expenses during the coronavirus pandemic.
“In the cases where they’re not, well then, that’s where it becomes an issue. I think that’s where the attorney general’s approach is so good. They’re being deliberative. They’re being careful. They’re not being careless,” Karr said.
Despite all the complaints, the state said most businesses have cooperated, and they haven’t issued any cease and desist orders, but some complaints are still under investigation.
With such high demand for many different products during the COVID-19 crisis, some stores are also turning to suppliers or wholesalers that they don’t typically work with.
Still, what you see at the store very well could be price gouging. If it seems too high, you are encouraged to call the attorney general’s consumer fraud hotline at 1-800-386-5438, or file a complaint online.