Is Walmart Price-Gouging Hurricane Victims?

A Walmart insider tells us that the price of cellphone chargers nearly doubled on orders from Walmart HQ in the wake of Hurricane Ike. Before the hurricane, chargers cost from $10-$15, but afterwards, they rose to a uniform $19.

The insider writes:

I work in a Walmart store in KY, and I’m writing in to let you know that my store has raised the prices on all of its cell phone chargers by almost 50%. These price changes were automatically put into effect in our system by Home Office. This, I feel, is in direct response to Hurricane Ike.

Here in KY, we didn’t get the rain, but we did get high winds on Sunday morning, which knocked out power to some 300,000 people here. The next day when we opened, people bought every car charge and battery we had because they were still without any power. Now today all of our car chargers go up nearly 50%. In fact, every charger, car or wall, in our store is a flat $19.00, when car chargers were $10.00 and wall chargers were $15.00 yesterday. This is hardly a coincidence, and it’s so blatently obvious to our customers. I can’t believe Walmart would do something so totally against their own mantra of Save Money, Live Better. This is more like “Raise Prices, Screw Suffering Customers!”

It could be a coincidence, maybe not. Either way, the timing is certainly suspicious.

(Photo: chasingfun)

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  1. nfs says:

    No discount store anymore.

  2. Parting says:

    This article gives me a good idea : buy a car charger ;)

  3. boxjockey68 says:

    Walmart do something that isn’t right?? NO! Aren’t they the store that gives a shit? oh, or are they the store that couldn’t give a shit? oh, or are they the store that still sells shit?

    and she says sarcastically *SIGH* so much to ponder

  4. lincolnparadox says:

    This is why they tell you to plan ahead for emergencies: because Walmart will gouge you if you don’t.

  5. jrlcopy says:

    Price Gouging after a natural disaster or whatever is illegal in Florida, and other states may have the same or similar laws.
    [myfloridalegal.com]

  6. RickScarf says:

    I’m going to go ahead and get on the side that this is a coincidence. Seems that was the only thing affected, so their supplier’s pricing probably changed. There are plenty of other ways to price gouge if you wanted to, and cell chargers really isn’t one of the first that would come to mind.

  7. Anticitizen says:

    It might be intentional. Walmart could be looking to make a killing off those cell phone chargers, so they, of course, mark them up to make a crapload of money, given the massive volume of them being sold after Ike.

    Screwed up? Yes. But Home Office probably isn’t thinking about consumers. They are probably thinking about the potential profits being seen here.

  8. Counterpoint says:

    Economists would say it’s the right thing to do. They only way to handle scarcity is through prices. If it’s expensive, people won’t buy two and then more people end up getting chargers. If it’s cheap (i.e. rent control in NY) people (i.e. Charlie Rangel among many others) buy multiple units even if they don’t really need them, just in case.

    • Coles_Law says:

      @Counterpoint: My thoughts exactly. What Walmart is doing may annoy some, but it ensures a faired distribution of chargers. My blood would boil if someone bought up all of Walmart’s chargers and sold them on the street at a huge markup. Granted, someone could still do that, but the potential profit is less.

    • zeroraveson says:

      @Counterpoint: An economist *may* say it’s the right thing to do, or not, depending on other market factors. It could be that by allowing price gouging and some people being priced out of consumption of a good or service, another substitute service with a higher marginal cost to society would be consumed in its place. In the case of cell phones, people may be forced to substitute to pay phones for 911 emergency calls, causing a delay in emergency medical care rendered, which is turn would cost more to society (both through medical bills and lost productivity of the people who had a longer delay in getting treatment).

      Anyway, an economist trying to question the problem of “should ‘price gouging’ be allowed in the cell phone charger market” would look at many factors, instead of sticking to Intro to Microeconomics dogma. Externalities can really mess with what “ought to be” in the marketplace.

      • XTC46 says:

        @zeroraveson: yay for people reading past their intro to microeconomics book.

      • Trai_Dep says:

        @Counterpoint: An economist would also say that if a family isn’t earning enough, the parents should find alternative revenue sources by having their children turn tricks for five nickels and a Pop-Tart.
        Damn those Liberal do-gooder regulators for interfering with a free market!

      • Counterpoint says:

        @zeroraveson: You got me there – I should have written “an economist might” not “economists would”.

        Your scenario to back up your point is a little silly, though. This is “gouging” after the hurricane, not before. These people have all survived the 911-inducing events, and are now shopping at Walmart. These chargers will be powering normal phone use, talking to family, etc.

        Besides, if you think a $9 raise in a charger’s price causes much more cost to their cities, shouldn’t you be calling for their electric / phone companies to be giving them at minimum $9 worth of free service?

    • spsaucier says:

      @Counterpoint: Exactly. Prices serve as communication tools to consumers of scarcity.

      It is very likely that if Wal-Mart kept its chargers at the old price, they would have sold out before a new supply could come in. People who are only willing to spend $10-$15 on one would be buying them, so when the run out, there would be a shortage, and those to whom the chargers would be worth $19 or more (perhaps the cellphone is the only thing they have with which to communicate) may not be able to get their hands on one.

      With higher prices, those who place more value on the goods will get them. This is the same as saying that people who need them more are more likely to get them if prices are allowed to fluxuate freely.

      The higher the prices, the faster suppliers will be racing to get goods to consumers because of the higher profit margin, which is good for everyone.

  9. TACP says:

    Sounds like a coincidence to me, IMHO. I was looking for a car charger a few weeks ago, and they were already $19 at the local Walmart. I ended up finding one at Big Lots for $5.

  10. fredmertz says:

    If they sold out of all their chargers, how could they have raised prices on the chargers? Is it possible that the replacement chargers cost Wal-mart more because of the scarcity?

  11. Grrrrrrr, now with two buns made of bacon. says:

    I hardly think that Wal-Mart executives believe there in it to help people “save money and live better.”

    I think the Wal-Mart mantra is more like “Sell cheap Chinese crap at huge profits while making sure your employees can’t get a living wage, unionize or get healthcare.”

    Just about any business will price-gouge at least a little bit if given the opportunity especially if demand suddenly exceeds supply. Hooray for greed…or capitalism..or human nature..or whatever.

  12. BiZarRroBALlmeR says:

    that can’t be right, Wal mart is all about the people.

  13. I guess you haven’t been tracking the price of copper and other metals over the past year.

    Rising energy and fuel prices are wrecking havoc at the manufacturing level.

    One of my part manufacturers (electrical switches) just raised the price of their product by 3%. Not a big deal? Oh yea, actually it is, because the 3% was the 7th price increase this year. Since January the product price is up nearly 22%. The competition is up as much or even more. Unfornately I need these parts to finish a product that I assemble so I am stuck.

    Your cell phone charger might be a cheap little nothing product, except when you factor in shipping costs, the cost of plastics (think oil) and of course the copper coil and power cord.

    Not saying WallyWorld is not capable of price gouging, but given their well documented track record with Hurricane Katrina when they emergency hauled goods into the stricken area … gave tons of products away, allowed their parking lots to be used for public distribution centers for no compensation and held prices firm even when their product costs and distribution costs sharply increased…. I suspect Wally is just passing on the real increases in the product costs. Factory what is happening at the manufacturing level and am willing to bet $ that Wally is behaving properly.

  14. Shadowfire says:

    I’m chalking it up to coincidence, too.

    Another thought – it may have been automated. Often times companies will see X item increasing in sales by a huge factor, and the corporation raises the price to
    1 – protect stock levels (i.e. keep from the shelf becoming empty)
    2 – capitalize on an increase in demand.
    It could have been an automatic deal, and yes they should be keeping an eye on it, but this probably isn’t as devious as the tin foil hat folks in here think.

  15. MsFeasance says:

    Price-gouging before, during, and after a hurricane? In other news, water is wet; occasionally falls from the sky, and, when combined with tropical winds, can seriously fuck your shit up.
    An increase of four to nine bucks on cellphone chargers is no big deal. Hell, when Gustave was about to hit, gas prices in Alabama went from the mid $3.70’s to anywhere from $4.20 to $5.25 a gallon unleaded. Because Alabama’s price gouging laws are outdated, gouging happens all the time. In order to invoke state price-gouging laws, prices must rise by more than 25% in a 24-hour period. At the time the law was passed in 1996, this meant an increase of more than 25 cents per gallon in one day. If you start watching two days early, though, you’ll notice a creep-up on gas prices in almost every station in the state: 24% two days before, and another 24% on top of that one day before a natural disaster’s strike, meaning that, if timed correctly, prices can be raised a total of 53% in theory without invoking the law. And that’s just on gasoline. I’m not even sure there IS a price-gouging statute for other necessities–batteries, cell-phone chargers, et cetera.
    Now they practically have to order you to bend over at the pump in order to invoke the price-gouging laws, and even then most of the time there’s no punitive remuneration; they just get a threatening phone call from the AG’s office.

  16. What about prices of car batteries, candles, regular batteries?

    I can see the reason for concern, but just the mention of the price of cell phone chargers going up without any more relative items doesn’t convince me that Walmart is practicing full scale price gouging. Showing one example isn’t a good sample for arguing a point. It’s much like pointing out Barack’s middle name and then claiming him to be Muslim, even though there is only one vague example. Maybe an extreme analogy, but it illustrates my point well. And a $4 to $9 markup isn’t much, could be worse knowing Walmart.

    Not blaming the OP, I just need more evidence before I start pointing fingers at Walmart.

  17. TheUncleBob says:

    First off, the prices went up country-wide. I’m sure the prices of the chargers weren’t raised all over because of this.

    Second, the chargers are still about half what you would pay at the retail stores.

    Third, we’ve just went through a reset in that category (Cell phone accessories) – it’s not uncommon at all for major price changes to occur at this time.

  18. Sempera says:

    Eh, if walmart pays the same amount that Radio Shack used to for chargers when I worked there (which I think they do) they’re making about $10-$12 off the original retail anyway… so it doesn’t matter. Seriously, chargers only cost like $3.

  19. feralparakeet says:

    You can get a charger at a gas station for $10, why go to Wal-Mart?

  20. unpolloloco says:

    I highly doubt this was an intentional increase in price. Most likely, Walmart’s computers saw that its manufacturers were having supply issues and that chargers were flying off the shelves. Therefore, the computer told the stores to raise prices. I doubt there was any human involvement in the decision.

    Furthermore, why raise the prices on just chargers? If Walmart actually wanted to gouge people, it would raise the prices on items like poptarts, water, ice, and the like (stuff they sell in a volume enough to actually make any significant amount of money off if they gouged) instead of just shipping more to hurricane-affected areas.

    • tylermorgan says:

      @unpolloloco: Exactly. I think that is the case here.

      @Sempera: You’re right that there is a huge markup on chargers and cellphone accessories in general. That markup is how retailers cover the cost of selling very low margin items – like the phones themselves.

  21. Adisharr says:

    Don’t even get me started on that redneck shithole store.

    • cmdrsass says:

      @Adisharr: Why, did they fire you?

      Also, I thought price-gouging laws were usually related to essential items like food, fuel, and hardware/tools. It would seem silly to apply those same laws to non-essential consumer electronics.

      • @cmdrsass:

        Yes, the laws cover the necssities. Every State is different, but I believe the list basically consists of fuel, lodging, shelter and supplies to protect or repair shelters, non-prepared and prepared food products, food preparation & storage equipment, ice & water, health care and supplies, public safety, transportation and supporting parts and services as well as services and supplies related to any public uliity including electricity, communication or sanitation.

        Consumer goods in general are not included. Except consumer products, such as a generator… which would be used to provide electricity to your refrigerator for the storage of food …. are included in the anti-gouging laws.

        In addition a state of emergency must be declared by the Governor or other authorized government official for the entire state or specific region. In the absence of a state of emergency, the anti-gouging laws do not apply.

        Because a state of emergency results in several different serious issues, ranging from payment of overtime to state employees to manditory evacuation of hospitals, most states are not prone to declaring a state of emergency just because there might be a thunderstorm a week from Friday or because the weather was a little bumpy last night.

        Consumes will often complain about hardware stores (a classic example) raising the prices of plywood prior to a hurricane… but since the state has not actually declared a state of emergency… the hardware store is free to adjust prices as they see fit due to supply, demand, rushed shipping costs etc.

      • Adisharr says:

        @cmdrsass:

        They didn’t fire me man – I QUIT! I told them y’all can eat cold grits and then stormed out of baby accessories.

    • Nofsdad says:

      @Adisharr: Gladly. But if you don’t want to be asked, why even come here in the first place?

  22. parkerjh says:

    as much distaste that I have for WalMart, I am going to give them a Mulligan on this one. with their distribution systems & computers, they know exactly what they NEED to charge at any given minute (supply & demand simply) They usually are good neighbors during disasters.

    • @parkerjh: I agree.

      Walmart can be bad sometimes, but whining over a $4-$9 nationwide markup? Go to BestBuy and get a cheaper cell phone charger. On the website, they have them $16 without shipping and in-store, I bet they are a bit more. Walmart does worse with the lack of decent full-time benefits and outsourcing, yet a little cell phone charger that someone probably buys maybe once in a few years? Please.

  23. nursetim says:

    Our Governor and Attorney General here in Michigan issued a warning to gas stations last week about price gouging, and encouraged people to call the AG’s office if they were the victim of price gouging. Nowhere in any of these press releases or articles about their warning did I see anything that defined what constituted price gouging. I am tempted to call and try to get some type of criteria for gouging from whatever government drone answers the phone. Heck, I should write to the AG himself to see what happens.

  24. hoffmeister_hoff says:

    I wouldn’t put price gouging past Wal-Mart, but seriously, there’s probably more profitable items to price gouge like water, non-perishable foods or flashlights.

  25. gman863 says:

    I doubt this story is true. Based on my personal experience yesterday, here’s why:

    Yesterday I went to the Wal-Mart in Stafford, TX (SW Houston) to buy a USB cable for my Samsung phone. At the same time, I considered buying a second AC charger, but decided to pass – Wal-Mart’s price was $15 (versus eBay for around $7 including shipping) — not $19 as stated in this story.

    BTW, the store was open and running on generator power (lights and A/C but no meat, dairy, or frozen food). For what it’s worth, Wal-Mart held the line on prices and (gasp!) actually had enough cashiers for fast checkout service. Even though this Wally World was in one of the few parts of the Stafford area still lacking power (and about 4 miles from another Wal-Mart which had power last Monday), it was open, convenient and fairly priced.

    • TheUncleBob says:

      @gman863: The prices have went up (AC Chargers from $15 to $18, Car Chargers from $10 to $18). I’m guessing that your local store isn’t worrying too much about doing prices changes sent from Home Office if they’re running on generator power…

  26. Mr. B says:

    I don’t buy this. Say what you want about Wal-Mart, but when it comes to responding to hurricanes, they are top-notch.

    • ecwis says:

      @Mr. B: I agree. This Consumerist story should be linked to this article: [consumerist.com]

      I think they did pretty well for Gustav too (in the New Orleans area). When I went there to stock up on emergency water, they had plenty and for the normal $3.88 price. And post-Gustav, on my way back from Shreveport, I saw countless Wal-Mart trucks. They have an outstanding distribution system. I really doubt that they would price gouge and I haven’t experienced it in New Orleans.

      • justcatie says:

        @ecwis:

        Those trucks were probably carrying relief supplies. In the last 5 years that we have lived in the southeast, My husband who is a logistics operations manager for WM, routinely sets up hundreds of loads of relief supplies for disasters, his first was Katrina and the lastest Ike.

        WM often responds faster and more effectively than FEMA and state governments, and I highly doubt that they would gouge customers over car chargers when they are sending millions in supplies to these areas. FOR free. From the logistics stand point they loose a lot of money on top of the cost of the supplies they donate, in employee time, driver time, fuel, etc, but I doubt raising the price on car chargers is going to make up for it.

  27. crouton976 says:

    Well, i guess the shirt from t-shirthell dot com rings true… The caption reads “Wal-Mart, Always corporate greed. Always…”

  28. Quatre707 says:

    I could name off about 1,000 things that Wal-Mart has done worse…

    Every day I wish for the members of the Walton family to die, die of shock when their million plus American slaves form a union, and earn proper compensation.

  29. jasonkarns says:

    Price gouging is a myth. The supply was being forced out. The demand was too high. The price will go as high as it needs to until the equilibrium is reached again. If the price is too high, then people will stop buying them and the price will begin to drop. Come on, people. Has no one else ever taken economics 101?

    If Walmart was still selling them at $19, then apparently that price was worth it to those who bought them. Otherwise, they’d buy them from competitors.

  30. cordeduroi says:

    The price went up on ONE item in ONE location and everyone throws a massive fit about it?? This is ridiculous. And since when is an increase from $15 to $19 “nearly double”?

    There is obviously a lack of understanding about what ‘price gouging’ is. If Walmart added a blanket 200% price increase to everything in the store in an area that was ravaged by the hurrican… THAT’S price gouging.

    Stop being idiots.

    • PeteyNice says:

      @cordeduroi: Fail. The OP is a Wal-Mart employee who said the change was from corporate and nationwide. They raised the price of a $10 car charger to $19. $10 to $19 is “almost double”. I know blaming the victim is awesome and makes you feel superior, but read the thing first.

      • cordeduroi says:

        @PeteyNice:

        “Fail.” I read it. The article states that the price of one non-essential item increased from a range of $10-$15 to $19. Referencing 4th grade math, that’s an increase of 27% to 90%, or an average of 58% increase. A 58% INCREASE IS NOT ‘ALMOST DOUBLE’!

        Let me know if you need help with any other simple logic.

  31. murphy1701 says:

    I work for a walmart in the northeast and in the electronics department no less and the cell phone charger prices have stayed the same.

  32. vongarr says:

    What they fail to mention is how the Wal-Mart I went to in Houston was giving away boxes of free bananas, the first day they open after the storm. I’m talking about 15-20 bunches in a box. You weren’t limited to a single box either.

    This is probably because they would have rotted in some warehouse. However, to let that happen would have been easier on them than the cost of labor it required to ship them there and put them in the store.

    Just saying.

    BTW, if they wanted to gouge customers, there are things that were needed far more than chargers.

  33. Xandey says:

    As others have mentioned. Wal-Mart’s computers are most likely to blame. They did pioneer fully automated systems that control everything from purchasing to distribution to pricing. Within seconds of your charger getting scanned at the register, another has already been ordered and is either shipping from the local distribution or manufacturer.

    I would say it’s likely that Wal-Mart’s weather model didn’t exactly predict the hurricane to reach this store and hadn’t prestocked it as well. I mean, didn’t Wal-Mart have extra blakets and batteries and all those things immediately after Katrina?

    • sonneillon says:

      @Xandey: When I worked at 7-11 before I moved onto a better paying and less stressful job, they said that they came up with the automated pricing and ordering system.

      I used it, it’s so easy it took 4 hours to train someone to order.

  34. bmoredlj says:

    Nice crosses…reminds me of Evangelion.

  35. Smorgasbord says:

    Each store sets their own price. One man told me he was in a different Wal-Mart and noticed prices were higher on some items he was familiar with at his regular store. He asked the manager why the prices were higher. The manager told him they didn’t have the competition at that store. When Wal-Mart drives away competition, that store’s prices go up.

    When Sam Walton ran the business it was a different kind of business. Remember when they advertised they tried to find American companies to buy from? People I have talked to who lived close to the family said that since Sam died, the company is a different company. He treaded his employees more like family. Now it is all about making MORE MONEY.

    I am a retired truck driver. There is one publication that each year asks truck drivers to rate business they go to. Wal-Mart warehouses were always among the lowest rated.

  36. Mysterry says:

    In all honesty… the more a product is in demand, the more it will be go up in price. We see this all the time.

  37. HogwartsAlum says:

    From the MO Attn. General’s web page:
    “Price gouging
    This refers to artificially inflated prices on necessities after a disaster, natural or otherwise. Missouri has seen price gouging after the Sept. 11 terrorist attacks, Hurricane Katrina in 2005 and other severe storms in the state.

    It’s against Missouri law to take advantage of a desperate situation by drastically increasing prices on merchandise, whether it’s gasoline, kerosene after winter storm, hotel rooms, ice, gas-powered generators and other necessities.”

    A bunch of hotels around here got nailed by Jay Nixon after the January 2007 ice storm because they price gouged rooms for people who had no power at home. The power was out in some cases (like mine) for two weeks. It was 20 degrees; it just wasn’t possible for a lot of people to stay home if they didn’t have an alternate heat source like a wood stove or even a fireplace. The hotels had to pay great big fines.

    The press release is here:
    [ago.mo.gov]

    I stayed in Branson for nine days. The places there were freaking awesome. They LOWERED prices for storm victims and even the restaurants were giving us discounts. Even with that, however, it was hard on me financially.

  38. incognit000 says:

    Well duh, of course it is. Wal-Mart ALWAYS jacks up their prices during a disaster. I grew up in a part of Alabama that was prone to failures in water supply. Every single time this happened, Wal-Mart would double or triple the cost of bottled water. They know that in times of trouble nobody will notice that they’re being gouged. The only way to combat this is to not shop at Wal-Mart. Other stores may increase their prices a bit when they have to get items shipped in special to meet demand, but only Wal-Mart is willing to double or triple the price of things that they already have in back.

  39. ThaneQue says:

    I live in Baton Rouge, Louisiana and was without power for 7 days after Gustav. After 4 days my local Walmart opened (with power). Limited hours / limited number of customers allowed in at any given time and they were the ONLY store in the area open.

    I needed cat food. They don’t eat MREs. Walmart was nearly out and the only thing left was 4 industrial sized bags of the cheap stuff. A bag that normally goes for < $10 was $21.99.

    I asked a manager why the markup? He laughed and said, “Supply and demand. If you don’t buy it, someone else will.”

    FYI, cats will eat MRE cheese… and then not use the litter box for a day or two.

  40. BrandonAbell says:

    It costs more to ship things into a disaster area. Why should Wally World be expected to eat that cost? Costs for things are on the rise everywhere; those of you down south who complain about high gas prices, take a look at how much we in California have been paying for the past several years compared to you. . .

    Also, raising prices in an emergency also tends to slow down the hoarding process that takes place when opportunists try to buy out the whole stock of something just to turn around and charge whatever they want later on. I’d rather pay a bit more and know that I can go somewhere that I expect to have something in stock and have it *actually be in stock*.

  41. Xmar says:

    I live in Southeast Houston.
    The local walmarts took a few days to open fully, but when they did, they were giving away bottled water. Three cases per family. I haven’t heard of jacked up prices, but I haven’t really looked…

  42. Fist-o™ says:

    John Stossel of 20/20 included “Price Gouging” as a concept that is actually good for the economic state of a disaster area. His findings, based on economic study, that, for instance, batteries are suddenly, extremely hard to come by after a hurricane. A merchant quadruples the price of batteries. Soon, the price of batteries is through the roof.

    Under basic economic principles, when demand increases, price will increase; and if the demand does not adjust, the supply will adjust. That means that more batteries will be shipped to the area; eventually driving the price back down, and (the most important part) getting batteries to the area.

    Your thoughts?

  43. jonny4 says:

    I can tell you I live in North Houston and I believe a lot of the Businesses around here are gouging. Wal-mart here is selling crappy brand 3500 watt generators for close to 500 and you can find name brand 3500 watt generators at Lowes for 399.99 and Home Depot for 349.99. This isn’t all a lot of the mom and pop restaurants are not selling the combo meals, which cost less but have more food and most places aren’t running there usual lunch specials stating lack of amounts of food. I went to a local chain called Taco Cabana Yesterday and they flat refused to sell and Fajita Platters stating lack of enough meat but you could order the more expensive Fajita Tacos and order as many as you want. The restaurants know a lot of us don’t have power and can’t go anywhere else. Even Applebee’s is in on it not serving there all you can eat special only regular menu item’s. Even the movie theater’s aren’t honoring there usual weekly specials for us in Houston but if your from Houston and are in San Antonio one chain is giving free tickets to movie’s before 5. There is a local Movie chain called Movie Tavern and on Tuesday’s usually run 5 dollar tickets and half price Pizza and 1.25 Pint’s but no during the disaster no siree. I have to say at least some retailer’s are being great my local Best-buy is running on a generator and they are offering free charging areas for cell phones, laptops and mp3 players. Of course Starbucks is my shining beacon of light I have spent my last 6 days here doing college course work, surfing the net, checking e-mail among other many things.