On March 10, 2020, North Carolina Governor, Roy Cooper declared a state of emergency as part of the response to COVID-19. Under North Carolina law, when a state of emergency is declared, North Carolina’s laws against price gouging go into effect. NCGS § 75-38 states that “Upon a triggering event, it is prohibited and shall be a violation of G.S. 75-1.1 for any person to sell or rent or offer to sell or rent any goods or services which are consumed or used as a direct result of an emergency or which are consumed or used to preserve, protect, or sustain life, health, safety, or economic well-being of persons or their property with the knowledge and intent to charge a price that is unreasonably excessive under the circumstances.” In short, while this state of emergency is in place, merchants / sellers are prohibited from charging unreasonable prices for a broad range of goods. Some specific examples related to COVID-19 would include face masks, hand sanitizer, Lysol, soap, etc. These are just examples and by no means an exhaustive list.
So what is an unreasonable price? The statute tells us: In determining whether a price is unreasonably excessive, it shall be considered whether:
- The price charged by the seller is attributable to additional costs imposed by the seller’s supplier or other costs of providing the good or service during the triggering event.
- The price charged by the seller exceeds the seller’s average price in the preceding 60 days before the triggering event. If the seller did not sell or rent or offer to sell or rent the goods or service in question prior to the time of the triggering event, the price at which the goods or service was generally available in the trade area shall be used as a factor in determining if the seller is charging an unreasonably excessive price.
- The price charged by the seller is attributable to fluctuations in applicable commodity markets; fluctuations in applicable regional, national, or international market trends; or to reasonable expenses and charges for attendant business risk incurred in procuring or selling the goods or services.
During this difficult time with many people earning reduced wages, out of work completely or concerned about their jobs moving forward, maximizing return on the money spent is incredibly important. The North Carolina Attorney General’s office is currently investigating complaints involving price gouging.