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KARE 11 Investigates: Pandemic Profiteering

KARE 11 investigates case of $10 rolls of toilet paper as Minnesota begins crackdown on businesses and online retailers engaged in “pandemic profiteering.”

SOUTH ST PAUL, Minn. — A garage door slams closed in the Phoenix, AZ suburb of Avondale as a reporter asks, “Do you think it’s fair to sell four rolls of toilet paper for $40?”

The man being asked the question is an eBay seller who goes by the handle ‘cubswon2016.’

KARE 11 Investigates, in partnership with sister station KPNX in Phoenix, tracked down the eBay merchant after a Minnesota man contacted us claiming online price-gouging.

“You think you were the victim of price gouging?” Asked investigative reporter A.J. Lagoe.

“I know I was!” Replied John Stone of South St Paul.

Credit: KARE 11
eBay seller closes door when questioned about $10 rolls of toilet paper

$10 Rolls of Toilet Paper

John Stone says he’d gone to the grocery store and found the toilet paper aisle bare

So, he went on eBay where he saw someone selling what he thought was a four-roll package.

“I thought it’s kind of expensive - $9.75,” John recalls thinking, “But OK, for a pack of toilet paper maybe that’s how much I have to pay now.”

He ordered four, thinking his family would be set for a while in case the COVID-19 crisis dragged on.

However, when he checked his receipt, he noticed he’d been mistaken about what he ordered and paid for.

Credit: KARE 11
John Stone of South St. Paul

“I was getting four single rolls of toilet paper,” John said, “each one costing me $10. And to add insult to injury I looked on my PayPal account and realized I was also being charged an additional $20 for shipping.”

His four rolls of toilet paper had cost him $60.

KARE 11 is working to identify and expose coronavirus related scams and price gouging. It you have an example CLICK HERE.

Authorities Cracking Down

Gov. Tim Walz issued an emergency order last week banning price gouging on food, medicine and other “essential consumer goods and services” in the wake of the COVID-19 crisis.

His action followed a KARE 11 investigation that revealed widespread complaints. Although most states already ban price gouging, KARE 11 reported that Minnesota was one of just 16 states that do not.

Credit: KARE 11
MN and AZ are just two of 16 states without formal price-gouging laws.

Minnesota Attorney General Keith Ellison began cracking down on what he labeled ‘pandemic profiteering.’ Ellison’s office issued a warning letter to Menards about “potential price gouging violations” and entered into an Assurance of Discontinuance with Downtown Smoke Shop, Inc. of Saint Paul, accusing them of price gouging on a number of items including selling toilet paper for $2.99 a roll.

Management for the Downtown Smoke Shop has not returned calls, but a spokesperson for Menards tells KARE 11, “We are studying the Attorney General’s letter and certainly will comply with any directives the Attorney General gives us.”

In addition to targeting businesses physically located in Minnesota, Ellison joined a bipartisan group of 32 attorneys general from across the country in warning Amazon, Facebook, Ebay, Walmart, and Craigslist that they are not exempt from their states’ legal restrictions on price-gouging and urging them to monitor more rigorously price-gouging practices by online sellers that use their services.

In joint letters to those retailers, the attorneys general write, “We want the business community and American consumers to know that we endeavor to balance the twin imperatives of commerce and consumer protection in the marketplace And, while we appreciate reports of the efforts made by platforms and online retailers to crack down on price gouging as the American community faces an unprecedented public health crisis, we are calling on you to do more at a time that requires national unity.”

The letter cites several examples of price-gouging on these marketplace platforms that took place after the World Health Organization’s declaration of a global pandemic on January 30:

  • On Craigslist, a two-liter bottle of hand sanitizer was being sold for $250;
  • On Facebook Marketplace, an eight-ounce bottle of hand sanitizer was being sold for $40;
  • On Amazon, the price of more than half of all hand sanitizers and face masks spiked more than 50 percent.

Attorney General Ellison and the bipartisan coalition recommended the online retailers make three critical changes to put an end to exploitative practices like these:

  • Set policies and enforce restrictions on unconscionable price-gouging during emergencies;
  • Trigger price-gouging protections before an emergency is declared; and
  • Create and maintain a complaint portal where consumers can report price-gouging incidents.

Ellison’s office says to-date, it’s received 500 price gouging complaints.

Minnesotans can report suspected price-gouging to the Attorney General’s Office by filling out the Office’s dedicated online price-gouging complaint form.

On the federal level, U.S. Senator Amy Klobuchar (D-MN) co-authored The Disaster and Emergency Pricing Abuse Prevention Act, a bill that would prohibit the selling, or offering for sale, of essential goods and services at excessive prices during or in anticipation of a natural disaster, pandemic, or state of emergency.

Klobuchar also joined in calling on the Federal Trade Commission (FTC) to take action to protect consumers during the COVID-19 pandemic.

“Although there is no federal law outlawing price gouging,” Klobuchar wrote, “as a general matter, the Federal Trade Commission Act (FTC Act) grants the FTC the power to prevent “unfair or deceptive acts or practices.” Charging outrageously inflated prices for everyday consumer health products in the middle of a global pandemic certainly fits that description. And make no mistake, the price gouging we are seeing has nothing to do with “supply-and-demand” or “price discovery”—it has everything to do with squeezing every last cent out of consumers in a time of desperate need.”

The eBay Seller 

Feeling taken advantage of after realizing he was being charged nearly $10 a roll for toilet paper, John Stone turned to eBay and asked to cancel his purchase.

But John says he was told it was too late, his order had already shipped March 16th.

Frustrated but resigned, John kept checking his mail, watching, more than a week passed, and the toilet paper never arrived.

I’m still waiting,” he said with a sigh.

KARE 11’s investigative team looked into John’s order and found a shipping label was created with the USPS on March 16th, in Avondale, AZ.

Credit: KARE 11
Shipping label printed but toilet paper not shipped

But despite nine days having passed at the time, the toilet paper had not actually been shipped.

KARE 11 tracked the eBay seller, ‘cubswon2016’ back to the address of an Avondale, AZ home and asked a reporter from our sister station in Phoenix to swing by.

When the reporter arrived, a man was standing in the open garage door.

The conversation was brief.

Reporter: “We’re doing a story about people selling goods online like toilet paper for really high prices.”

Seller: “Ok.”

Reporter: “Can we ask you about the sales that you’ve made?”

Seller: “No.”

The garage door then began going down.

Reporter: “Can I just ask you; do you think it’s fair to sell four rolls of toilet paper for $40?”

There was no answer.

Promise of Repayment

When KARE 11 contacted the seller through eBay he did respond and claimed he was the victim of price gouging himself.

He wrote, “I had to pay $200 for 16 rolls of toilet paper…So tried to recover some of the money.”

As for why he had not mailed out the toilet paper he sold, he claimed he didn’t feel right about it.

“So rather than sending it off and forgetting about it,” he wrote, “I’ve been buying a little bit of toilet paper here and there so I can double or triple the order and be helpful rather than hurtful.”

He then promised to cancel the order and refund John his money.

Credit: KARE 11
eBAY seller promises to cancel and refund the $10 a roll toilet paper he sold

More than 48 hours later, John says he has not received the refund or the hi-priced toilet paper.

With his family’s supply dwindling, he’s back hunting for a more reasonably priced alternative.

“We’ve got enough to last the week,” he said.

Related KARE 11 Investigations: 

RELATED: KARE 11 Investigates: SBA loan scam targets MN business owners

RELATED: KARE 11 Investigates: Gov. Walz Bans Price Gouging

RELATED: KARE 11 Investigates: Price gouging legal in Minnesota

RELATED: KARE 11 Investigates: What’s causing the COVID-19 testing delays?

KARE 11’s coverage of the coronavirus is rooted in Facts, not Fear. Visit kare11.com/coronavirus for comprehensive coverage, find out what you need to know about the Midwest specifically, learn more about the symptoms, and keep tabs on the cases around the world here. Have a question? Text it to us at 763-797-7215. And get the latest coronavirus updates sent right to your inbox every morning. Subscribe to the KARE 11 Sunrise newsletter here. Help local families in need: www.kare11.com/give11

The state of Minnesota has set up a hotline for general questions about coronavirus at 651-201-3920 or 1-800-657-3903, available 7 a.m. to 7 p.m.

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