Pandemic pricing? Cost of a patio heater quadrupled on Amazon

E-commerce surge strains retailers and delivery networks

A patio heater that cost $150 on Amazon back in late 2019 had soared to $699 a year later, one of hundreds of products the online marketplaces sells whose price surged during the coronavirus pandemic, according to a consumer advocacy group.

In an analysis of 750 products sold on the platform, U.S. PIRG Education Fund found that 409 items saw prices jump more than 20% in 2020, while 136 at least doubled in price. 

The spikes largely involved items viewed as necessities during the public health crisis, including surgical gloves, eye goggles, toilet paper and cough syrup. Across 15 product categories examined by U.S. PIRG, the highest price increases ranged from $13.10 to $4,000, with patio heaters showing among the 10 largest price jumps.

In the past year, 61% of patio heaters sold on Amazon increased in price by at least 20%, and 45% at least doubled. The highest jump was $549, from $150 to $699. Other products that saw similar spikes include oral thermometers, disinfection wipes and hand sanitizers. (See U.S. PIRG chart below.)

"Our research throughout the pandemic has revealed massive price spikes on Amazon listings," U.S. PIRG stated.

U.S. PIRG

"It's not meant to imply that this is true in all cases — only to reinforce the point that these price hikes can't always be blamed on heightened demand," Grace Brombach, a consumer watchdog associate and author of the study, told CBS MoneyWatch last week. 

"We believe Amazon has the technology and resources to combat this," Brombach said of the company, which reported record sales of $96 billion in the third quarter of 2020, a period that saw its profits tripling to $6.3 billion from a year earlier.

13,000 suspended accounts

Amazon acknowledges that the pandemic has boosted demand — and plumped up its profits — as millions of Americans stepped up their shopping online. But the company said it has both the automated and the manual means in place to ensure prices are fair to consumers.

"Our systems are designed to meet the best available price amongst our competitors," an Amazon spokesperson told CBS MoneyWatch in an email. "Sellers set their own product prices in our store. We have a long-standing policy against price-gouging, have processes in place to proactively block suspicious offers and monitor our store 24/7 for violations." 

Amazon blocked or removed more than 39 million offers and suspended more than 13,000 accounts for attempted price gouging last year and referred the most egregious offenders to federal and state law enforcement, according to the spokesperson. 

Amazon has worked with more than 40 state attorneys general to prosecute bad actors, and the company supports the idea of creating a federal price-gouging standard, he added.

"Shop around"

Retail analyst Neil Saunders, managing director at GlobalData, faulted U.S. PIRG for focusing exclusively on Amazon in its latest report and not looking more deeply at pricing changes on other big venues for third-party sellers like eBay and Walmart. "You have to look across the whole industry to be fair," he said.

Its report released last week built on earlier findings released in September that found escalating costs on Amazon while "prices on the same product from Walmart, Target and others remain(ed) largely unchanged," the group stated, acknowledging it had not looked at other retailers in its most recent analysis. 

The price of essentials like toilet paper and hand sanitizer did go up, partly due to companies dispensing with offers and deals to discourage volume buying amid product shortages, Saunders explained. "Prices are often determined by supply, demand and underlying cost factors," he said. 

Saunders points out that "no one is forced to buy anything," a sentiment echoed by U.S. PIRG's Brombach, who said: "Our biggest advice to consumers is to shop around."

f

We and our partners use cookies to understand how you use our site, improve your experience and serve you personalized content and advertising. Read about how we use cookies in our cookie policy and how you can control them by clicking Manage Settings. By continuing to use this site, you accept these cookies.