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Is Price Gouging a Crime in California?

The COVID-19 pandemic has caused governors in every state to issue stay-at-home orders to protect their residents from the coronavirus by forcing them to remain home and temporarily closing many businesses. The fear of the outbreak has caused many people to start “panic buying” and hoarding certain household items, resulting in a constant shortage and empty aisles in grocery stores. 

Commodities such as the following: 

  • Disinfectant 

  • Cleaning products 

  • Hand sanitizer 

  • Toilet paper 

  • Face masks 

  • Disposable gloves 

Due to the significant demand for the household items mentioned above, many suppliers are attempting to capitalize on these shortages during the outbreak by increasing their prices at a substantially higher rate. What were once affordable everyday items are now being sold for hundreds or thousands of dollars of eBay. 

This is known as price gouging. However, taking unfair advantage of consumers during a disaster or emergency is against California law. Whether a seller is a person or a business, all entities must comply with emergency declarations.  

Major necessities such as food and drink, medical supplies, construction materials, emergency supplies, and fuels are all protected by state law. Businesses cannot raise the prices of above 10 percent in an emergency area. 

Keep in mind, sellers may only raise prices over 10 percent in a disaster area if their suppliers have increased their prices. Yet, sellers cannot add their own 10-percent markup when passing down wholesaler price hikes to consumers. 

Price gouging is a misdemeanor offense, punishable by a maximum jail term of one year and/or a fine not exceeding $10,000. Violators may also be subject to civil lawsuits. 

If you or your business is accused of price gouging, the last thing you want to deal with during a crisis is a criminal charge. At Corrigan Welbourn Stokke, APLC, our team of former prosecutors has more than 100 years of collective experience handling serious criminal cases in Newport Beach and Orange County.  

Contact us today at (949) 251-0330 and request a free consultation. Let us protect your rights and freedom.