Did you see those packs of water being sold at a Best Buy store in Houston for as much as $42 per pack? The photos went viral as an example of predatory price-gouging in the wake of Hurricane Harvey. But the company is now apologizing and saying it was all a big misunderstanding. Meanwhile, CNBC doesn’t think that disaster capitalism is such a big deal.
There have been over 550 complaints so far about price gouging on everything from food to gasoline. According to the Texas Attorney General, the price gouging has included hotel prices quadrupling, fuel for as much as $10 per gallon, and cases of water being sold for $99.
But Best Buy was recently singled out on social media when a tweet showed that some packs were being sold at a Houston location for $29 while other cases of water were $42. People were disgusted, to say the least.
“This was a big mistake on the part of a few employees at one store on Friday,” a Best Buy spokesperson told CNBC.
“As a company we are focused on helping, not hurting affected people. We’re sorry and it won’t happen again,” the statement continued.
“Not as an excuse but as an explanation, we don’t typically sell cases of water. The mistake was made when employees priced a case of water using the single-bottle price for each bottle in the case,” the spokesperson from Best Buy concluded.
The penalty for price gouging in Texas is a fine of up to $20,000 per infraction. And if the victim is over the age of 65, the fine is up to $250,000. So while Best Buy contends that it was all an honest mistake, they have a legal responsibility not to price gouge during a disaster. That’s the law in Texas.
But amazingly, a host from CNBC acknowledged that while it might be immoral to overcharge during a crisis, he still wondered if the law should be enforced. CNBC had the Attorney General of Texas, Ken Paxton, on their network this week and asked why businesses shouldn’t be allowed to charge whatever they want, even after a natural disaster.
“Attorney General, clearly all of us would be agreed that it’s a moral issue to try and oversell necessities at a time of crisis. Is it and should it be a legal issue as well?” the CNBC host asked. “Surely it’s up to the seller to sell their product at the price they wish, even if morally clearly at this time they shouldn’t be overcharging for necessities.”
The Attorney General shot back that the law is in place for a reason and that he was going to enforce it.
“Well, clearly the Texas legislature thought differently, because they were the ones who put the penalties in place. It’s up to $20,000 per occurrence and if you do this to somebody 65 and older it’s $250,000 per occurrence,” Texas Attorney General Ken Paxton said.
“So, of course, our legislature, signed by a governor many years ago, clearly didn’t want during natural disasters the necessities to be jacked up in price,” Paxton continued. “So that was a decision that they made and we’re enforcing it.”
It’s incredible that anyone could ask whether selling $100 cases of water is actually good in the middle of this disaster like this, but here we are. Nothing, not even the lives of hundreds of thousands of people, should apparently get in the way of making a buck.
Correction: This post originally misstated one of the prices for the packs of water. I regret the error.