Statutes prohibit excessive price increases during declared emergencies, frequently defined as a percentage above pre-emergency prices. Cost increase defenses permit passing through increased supply costs.
Enforcement is typically by attorneys general.
Alternative Names:
Price Gouging|Excessive Pricing Claim
Why it Matters?
Cost increase defenses require documentation contemporaneous with the pricing decision, since a retailer raising prices in response to supplier increases must show the correlation, and reconstructing that justification afterward is substantially weaker. Percentage thresholds vary and several statutes apply to sellers throughout the distribution chain rather than only retailers, which reaches manufacturers and distributors that assumed the rules applied downstream.
Frequently Confused with
Related terms
Frequently asked questions
What does the cost defense require?
Who is covered?
