Odd Cents - Price Gouging in Barbados

Price Gouging in Barbados: The Selfish, The Bad and The Greedy

Another day, another scandalous case of price gouging in Barbados. It’s sad when ugly instances like this pop up in times of times of need, because it shows that businesses are consumed by greed. Over the last few days, in the aftermath of the eruption of the La Soufriere volcano in St. Vincent and the Grenadines, there were lots of reports of price gouging in Barbados. Businesses were accused of wrongfully raising prices of in demand items and using unfair pricing strategies.

It is a worldwide phenomenon that occurs whenever there is a natural disaster and there is a demand for necessities such as food, water, fuel or personal protective equipment. This current situation is none like Barbadian consumers have seen before and it was pretty difficult to predict. We are dealing with a never-ending COVID-19 pandemic and the effects of a partially unpredictable natural disaster. And yet, some businesses still have time to engage in price gouging.

But what makes me even more upset, is the fact that they can and will get away with it.

What is Price Gouging?

The website of the Office of the Attorney General in the State of California provides a simple definition of price gouging. It says that “price gouging refers to sellers trying to take unfair advantage of consumers during an emergency or disaster by greatly increasing prices for essential consumer goods and services.”

It’s mind-boggling to think that at a time when people need help, they are further disadvantaged by unfair consumer practices. In the United States, many price gouging laws are triggered when natural disasters such as storms, tornadoes and flooding occur. High-ranking government officials have the authority to stop price gouging. In some cases, where it has been ruled that customers pay too much, officials can seek refunds on customers’ behalf. Further, the court system can impose penalties on those who violate the law.

Price gouging is illegal. It is against the law for businesses to charge excessive prices for essential goods and services, especially those that are in demand during a crisis.

However, price gouging laws around the world differ considerably, so it’s important that you are aware of what can be classified as price gouging in your specific area.

What Does Barbados’ Law Say About Price Gouging?

The Fair Trading Commission’s website mentions that price gouging may be against the Fair Competition Act if the specific instance occurs under certain circumstances. Price gouging occurs if:

1. A company operates in a market where there is no real or effective competition (i.e. the company is the dominant firm with little or no competitors)

2. Prices charged are not driven by increased costs (i.e. the company increases its prices because of increased demand, or any other reason not related to cost)

3. A group of suppliers agrees to fix prices (i.e. a group gets together and makes arrangements to coordinate the prices offered for products and services)

The grey area, which could be a loophole for the unscrupulous, is that higher prices driven by higher costs is allowed. This is seen as a necessary practice to ensure that the business remains in operation. A business can easily claim that they raised their prices because it costs more to provide the product or service.

The Fair Competition Act (CAP. 326C), Section 16, Part 3 (d) reads:

“An enterprise abuses a dominant position if it impedes the maintenance or development of effective competition in a market and in particular, but without prejudice to the generality of the foregoing, if it (d) directly or indirectly imposes unfair purchase or selling prices that are excessive, unreasonable, discriminatory or predatory;”

I’m not sure if there are any other consumer protection acts that deal with price gouging, but this is a very vague directive. But at least we know what we’re dealing with. The next step is to learn how to identify price gouging correctly.

How to Identify Price Gouging

In some cases, it is very easy to spot price gouging. One of the biggest red flags that signals price gouging is a ridiculously high price for an item. During the pandemic, we saw inflated prices for things like hand sanitizer, antibacterial wipes, bleach and some foods. In other cases, it’s not that obvious, especially if you’re buying one off items. However, there are some ways to confirm that price gouging is taking place.

1. Compare current prices to older prices. If the increases are more than 20% different in a short span of time, this may be a sign of price gouging
2. Look at prices charged by other retailers for the same item. This is a good indicator that the current retailer is inflating their prices without good reason
3. Be wary of advertising. Some retails may try to pressure you to make a hasty decision by saying that a ridiculously priced product is almost sold out.

Steps to Take if You Suspect Price Gouging in Barbados

If you want to report a suspected case of price gouging in Barbados, there are a few things you should do:

1. Write down the name of the seller or store and the address
2. Note the date and time that you were in the store and saw the item
3. Take a photo of the item on the shelf, the advertisement or whatever lists the product details (e.g. type of product, brand name, size, price etc.)
4. If you already bought the item, save the receipt (if possible, take a photo or scan the receipt)
5. Gather additional evidence (previous receipts for the same item, will assist in the price gouging investigation)

When you gather all of your supporting documents, send your complaint to the Fair Trading Commission. If you have questions about the prices being set by a business, contact the Department of Commerce and Consumer Affairs.

To be honest, I firmly believe that we are victims of price gouging, and that is has been going on without swift action from the authorities. It will take a united effort to stamp it out and get these businesses to stop. If you see something, say something. Keep your bills and compare prices. Take photos of prices and goods that look suspicious. If enough of us bring attention to what’s going on, it will have to change. There have been too many instances of price gouging and it’s time for the authorities to do something.

Price Gouging Resources

For further reading about price gouging and how you can protect yourself, please see the following links:

The Fair Trading Commission (Barbados): Fair Competition Act (Chapter 326C)
The Barbados Advocate: Clamp Down Needed on Price Gouging
The Jamaica Information Service: Big Fine for Price Gouging
United States Public Interest Research Group: How to Identify and Report Price Gouging
Oregon Department of Justice: Price Gouging
Find Law: Price Gouging Laws by State
Which (United Kingdom): Price Gouging: How to Spot it, Report it and Get Your Money Back

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