LC-21 · Consumer
Price spikes where no statute applies
The generator that costs four times as much
In ordinary words
After a storm, a seller triples the price of bottled water or a generator. If the state has not declared an emergency, or has no price-gouging law, the spike can be lawful.
Why people call it a crime
People call it profiteering off a disaster. Economists sometimes call it a signal that brings more supply. The legal answer depends on the state and the declaration.
A scene, not a hypothetical statute
The hurricane is two days out. No declaration yet. The last generators go from $500 to $1,800. In a state that only triggers after a declaration, the sign can be legal on Monday and illegal on Tuesday.
In legal terms
There is no general federal price-gouging statute for ordinary retail goods. Many states ban unconscionable price increases on essentials during a declared emergency — California Penal Code § 396 and New York General Business Law § 396-r are examples. Outside those windows, ordinary price increases are left to the market, antitrust law, and bans on deception.
Price controls are exceptional. Legislatures usually attach them to emergencies rather than to every shortage.
State price-gouging statutes, e.g. Cal. Penal Code § 396; N.Y. Gen. Bus. Law § 396-r.
Where it stops being legal
Raising prices on covered goods during a declared emergency above the statutory threshold, colluding with competitors, or advertising a fake pre-storm price is unlawful.