What You Need to Know About Price Gouging on eBay

The coronavirus pandemic has resulted in a surge of demand for protective equipment and personal hygiene items across the world. In response, eBay initiated a zero tolerance policy on price gouging. Read on to learn all about price gouging, restricted items on eBay and how to report listings with inflated prices.

What is price gouging?

Price gouging is the act of increasing the price of goods and services when demand is high and supplies are limited. To be considered price gouging, the goods need to be sold at a significantly higher price, one that is considered to be unreasonable or unfair.

Price gouging is usually a short term occurrence, being most commonly seen after natural disasters of other periods of emergency. It can also be a result of stock shortages.

Usually judged to be unethical and exploitative, price gouging typically affects essential items such as food, clothing, shelter and medicine.

Many countries have laws against price gouging, to ensure access to basic necessities during emergencies. Price gouging laws can also have the dual purpose of preventing unfair business practices.

eBay’s price gouging policy

Price gouging is not allowed on eBay, where it is defined to be any instance when a seller increases the ‘price of items to a level that is much higher than is considered fair or reasonable.’

To prevent unfair pricing behavior, eBay states that:

  • Inflating item prices during or after an emergency situation is not allowed
  • Essential items must be offered at a reasonable price
  • Selling restrictions for commonly price gouged items may be enforced (only approved sellers will be able to create listings)
  • All applicable laws and regulations relating to the sale of items must be followed by sellers

The price gouging policy warns that eBay may end or cancel listings, hide or demote all listings from search results, low seller ratings, implement buying or selling restrictions or even suspend accounts. Any outstanding fees will not be refunded or credited.

eBay’s price gouging policy is intended to ensure that buyers are able to buy essential items at non-inflated rates. It also makes certain that sellers are following government regulations and guidelines.

Overlapping with price gouging, eBay also has a ‘disaster and tragedy’ policy. This bans listings that attempt to profit from human tragedy or suffering.

Banned items on eBay

As per regulatory restrictions across the United States, eBay began to take action against coronavirus related price gouging in early March 2020.

The first items to be affected were:

  • health care masks (including N95/N100 and surgical masks)
  • hand sanitizer/gel
  • disinfecting wipes

New listings featuring these items were blocked and existing ones removed.

Listings that mentioned ‘COVID-19’, ‘coronavirus’, ‘2019nCoV’ (except books) in the title or description were also removed.

In late March, eBay expanded the restricted items list to include:

  • toilet paper
  • baby formula and baby wipes
  • tampons
  • diapers​

These items were to be only permitted for sale by business sellers in a fixed price format.

How eBay regulates price gouging

To monitor listings, eBay uses a rules-based filtering system with algorithms to identify prohibited and restricted items. A team of customer service agents manually check for missed listings, specifically looking for inflated prices and products making false health claims.

Over 500,000 listings were stated to have been removed or blocked by late March. Despite this, many still claimed that eBay was slow to react to listings with inflated prices. Some unscrupulous sellers managed to get around the algorithms with intentionally misspelled words or incorrect category placement.

It was also apparent that many non-essential items were also subject to unusually high prices. Examples include webcams (for work at home use) and fitness equipment (due to gym closures). The sale of these items are, however, not monitored or restricted by eBay, likely due to the lack of regulatory laws for unessential items.

How to report price gouging

In response to the coronavirus pandemic, eBay has recently introduced a price gouging reporting tool. This enables eBay users to flag listings for suspected price gouging behavior for review by the customer service team.

Reporting a listing for price gouging is easy. Simply click the ‘report an item’ button on this help page or report directly from the listing:

  1. On the listing, choose the ‘report item’ option next to the description and shipping options
  2. Select ‘price gouging’ in the Report Category field, on the file a report page
  3. Select ‘price gouging’ as the reason
  4. Click send after selecting an option from the Detailed Reason field

The effectiveness of reporting price gouging behavior on eBay has been debatable. With such a large online marketplace and reduced customer service staff, it is somewhat inevitable that price gouging is still commonly seen on eBay at this time.

Experienced sellers, have you witnessed price gouging on eBay? Share your experience in the comments below

Gemma
Gemma
Gemma is our all things eBay expert. Originally from the UK, she now lives in Canada and travels extensively. You can read about her travels at her blog Off Track Travel.