I’m fascinated by this story by Karin Price Mueller, a columnist for The Star-Ledger, about post-Sandy price gouging. Here is the shortened version of the main episode:
But after more than 48 hours without electricity …, my three children and I wanted a change of scenery. We went across town to a friend’s house for a few hours.
Driving home, we saw lights in a local pizzeria.
“Open,” the light in the window beckoned.
Growing a little bored with my culinary creations on the propane-powered grill, we were eager for a change.
I asked the cashier what they were selling.
Generator-powered large pies or thin-crust versions, no toppings. $15 each.
I ordered one, and we waited with another 20 customers, basking in normalcy, warming up from the cold, savoring the delicious smells wafting from the ovens.
When it was ready, I paid cash and we ate.
And it was delicious. Nothing left but crumbs and a grease smudge or two.
Word must have gotten around, because dozens more customers came, bought pizza, and left in the time we were there.
We returned home, bellies full. Satisfied.
So far, nothing out of the ordinary, but the columnist spent the next day writing a story about post-disaster scams and price gouging. Then it hit her–maybe she paid too much for that pizza the night before.
She dug up a take-out menu from the pizza place and determined the normal cost of the pizza she bought was $11.95, and $15 was a lot more than just 10 percent higher than $11.95. She wrote, “in retrospect, I wondered if I was a victim of classic price gouging at the pizza joint.”
She returned to the pizza place, explained her price gouging issue to customers to get their reactions and spoke with the merchant. The consumers were mostly satisfied to get what they could at the price offered. The merchant said his usual suppliers weren’t available so he sought out additional sources, and the new sources were more expensive. He also said he’s giving by-the-slice customers a bigger slice–one-sixth instead of one-eighth–which more than makes up for a price which is more than 10 percent higher.
What fascinates me here is that usually consumer’s reaction of “I’ve been gouged” is an immediate and emotional one. Here the consumer’s experience was one of complete customer satisfaction until, sometime the next day she consults an old take-out menu and discovers the price she was happy paying the day before was actually higher than the price the pizzeria charged prior to the storm. Only then does she think that she might have been gouged.
I wonder whether she filled a formal consumer complaint. After all, she wrote, “Pizza isn’t the most important issue out there, but the law is the law.”
RELATED: The same columnist also wrote, “After Sandy, a debate about what actually constitutes price gouging.” The article contrasts the New Jersey law on price gouging with the views of critics, and quotes College of New Jersey philosopher James Stacey Taylor in defense of allowing merchants to raise prices freely. Next we have views from the NJ Attorney General and a former head of the NJ Division of Consumer Affairs (Notable quote: “there are times when the rules of commerce don’t apply and the rules of humanity take over.”). Taylor recently had an op-ed defending price gouging published at The Star-Ledger.