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The Coronavirus Outbreak has Led to Fake Products and Price Gouging on Amazon

Professor of Financial Economics and Part-time Value Investor, Transfin.
Mar 12, 2020 9:09 AM 2 min read

If there’s a calamity, there’ll be people suffering and there’ll also be people exploiting the situation.


Immoral Instincts

The coronavirus outbreak has set off a global panic. People are scrambling to buy large amounts of basic necessities like hand sanitizers, toilet paper rolls and face masks from Amazon, fearing a shortage in the market in the near future.


This panic has led to dubious sellers selling coronavirus related products promising to fight the virus without the required federal certifications for safety standards they claim. Others are selling products labelled deceptively whilst others are hiking prices by many factors.


Back Alley Business

According to a Wall Street Journal investigation, more than 100 safety masks and respirators on Amazon were counterfeit or had unverifiable protection and certification claims.


Some listings sold products that federal authorities had previously warned were counterfeit. Other sellers were marketing pink, latex-free gloves promised to “prevent coronavirus, flu and pneumonia” or fisherman-style hats with plastic face shields that “effectively isolates saliva carrying viruses”. Needless to say, both claims were false.


At the same time, price gouging has become rampant. Prices on Amazon spiked by at least 50% for more than half the listings of surgical masks and hand sanitisers in the weeks after the coronavirus crisis came to the US in late January, according to a study by the consumer advocacy organisation US PIRG Education Fund.


Not a New Deal

You might expect Amazon to be a hot-shot very-posh big-town super-market that adheres to common-sense regulations and rules. But it seems the e-commerce giant has evolved to be akin to a flea market.


In fact, a previous WSJ investigation found that 4,152 items for sale on have been declared unsafe by federal agencies. These items include school products with limit-breaching lead levels and sleeping mats that regulators warn can suffocate infants. Many of them are sold from Amazon warehouses and listed as “Amazon’s Choice”.


But while questionable products being sold on Amazon is not a new phenomenon, this becomes dangerous in the middle of a pandemic. Gullible customers being duped in such cases could very well be cheated of good health in addition to being cheated of their money.


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