The normal rules of supply and demand don’t apply during a pandemic.
That’s why, on March 24 and 25, the Oregon Department of Justice sent cease-and-desist letters to the proprietors of the Portland 7-Eleven stores at 4715 N.E. Columbia Blvd. and 9145 S.W. Beaverton-Hillsdale Hwy., respectively, informing them that the state believed the stores were charging “unconscionably excessive” prices for face masks.
On Wednesday, more letters went out to Portland businesses: Best Buy Foods at 14420 S.E. Stark St., Moscow Nights Euro Food Market at 13507 S.E. Division St., All Service Moving at 66 S.E. Morrison St.
The letters were a response to consumer complaints to the DOJ’s consumer-protection division.
“When we initiated our price-gouging hotline, we did not know what to expect,” Oregon Attorney General Ellen F. Rosenblum told The Oregonian/OregonLive. “We have now been taking calls for a little over two weeks -- and have we ever been busy! Complaints have come in from all over the state, with lots from the Portland metro area.”
The most-frequent complaints, not surprisingly, have been about items that are necessary during a public-health crisis that includes a state-of-emergency stay-at-home order: face masks, toilet paper, disinfectant wipes, hand sanitizer, bottled water.
Gov. Kate Brown, as part of her response to the coronavirus outbreak in the state, declared an “abnormal disruption of the market” on March 16. That means the price of “essential goods” -- such as food, medicine and cleaning supplies -- cannot be increased by more than 15% during the emergency.
Kristina Edmunson, DOJ’s communications director, said that when the department “believes there is a basis for price gouging” it contacts the business. “Usually, a business will correct the behavior. But, if they do not, we will follow up with a cease-and-desist letter.”
The department has sent out 17 letters at this point, with a little less than half of them going to businesses in the Portland area.
Oregon Attorney General Ellen Rosenblum. Dave Killen / staffDave Killen
So far, more than 125 official price-gouging complaints have come into DOJ through its hotline and online form. They cite a large variety of items, including meat, bread, eggs, rice, coffee creamer, ramen, marijuana, bleach, paper towels, detergent, thermometers -- and even TVs, hotel rooms, video-conferencing services and guns.
Raul Torres, a truck driver for a national grocery chain, said he was pumping his own gas this week at a station in Woodburn when he realized he was being charged $3.98-a-gallon for regular unleaded. He immediately stopped the pump. He looked up and saw that the station’s overhead sign didn’t have prices on it, just blank spaces.
“That’s just ridiculous,” he told The Oregonian/OregonLive.
The average price of a gallon of gas in Oregon right now is $2.68, according to AAA.
Torres said he called the DOJ’s consumer-protection hotline and reported the station.
Woodburn, for whatever reason, just might be a hot spot for high prices right now.
The Oregonian/OregonLive has received photos from stunned customers at the Mega Foods store there showing prices that appear to be significantly higher than the norm, such as a large bag of black beans going for $79.99. DOJ received a complaint about Mega Foods on March 26.
Almost all of the recipients of the cease-and-desist letters so far are small-business owners and convenience-store franchisees. The Oregonian/OregonLive contacted half-a-dozen of the businesses about their pricing and found them unwilling to talk about it.
The manager at the 7-Eleven on Beaverton-Hillsdale Highway, who refused to give his name, insisted the store had not sold face masks for “a while.” He added: “I don’t know why they would make a complaint. We don’t sell surgical masks.” (Calls to 7-Eleven’s corporate offices were not returned.) The person who answered the phone at the Moscow Nights food mart insisted, in a heavy accent, that no one there spoke English.
But complaints that have come into the Oregon hotline also have pointed the finger at some of the biggest retailers in the country, including Amazon, Facebook, eBay, Costco and Walmart.
So what happens if the Department of Justice sends out a cease-and-desist letter and later finds that excessive pricing has continued?
“It would really depend on the particular facts, but we are monitoring each situation closely,” Edmunson said.
Ultimately, the penalty could be up to $25,000 per violation, along with the reimbursement of customers.
“The bottom line is this,” added Attorney General Rosenblum. “When it comes to basic essentials at this time, no one should be allowed to profit off this pandemic. Period.”
UPDATE: 7-Eleven responded to The Oregonian/OregonLive after this article was published. The company stated in an email: “7-Eleven is committed to providing quality products at fair, honest prices. Any violations of federal, state and local price-gouging laws will not be tolerated. We are taking steps to resolve any issues brought to our attention as 7-Eleven prohibits these practices.”
-- Douglas Perry
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