Amazon Accused of Price Gouging Before Irma
Amazon.com may be in hot water over the cost of water. Many consumers are accusing the retailer of price gouging as Hurricane Irma makes its way toward Florida. CBS News reports packages of Nestle water selling for $25 on Amazon, yet the price for the same case of water in the Northeast was $18.50. Amazon said it doesn't engage in surge pricing, and denied that bottled water prices have changed recently. "We do not engage in surge pricing," a company spokeswoman said in a statement. "Amazon prices do not fluctuate by region or delivery location. Prices on bottled water from Amazon, and third-party sellers that are doing their own fulfillment to customers, have not widely fluctuated in the last month."
Total Retail's Take: Amazon uses a "dynamic pricing" model in which the cost of an item can change throughout the day. For example, items that are in demand receive price tweaks (i.e., prices go up), thanks to Amazon's pricing algorithms. However, considering the devastating aftermath of Hurricane Harvey and the upcoming emergency need for water for those in Irma's path, fluctuating prices "due to demand" looks similar to price gouging for many — i.e., Amazon is taking advantage of the situation. In addition, while Amazon doesn't have direct control over what third-party merchants charge for water, it should put out a statement to sellers disagreeing with the practice of raising prices during this time. You think Amazon would have learned from Best Buy, and the negative press it got for raising prices on bottled water in the aftermath of Hurricane Harvey.