Jeffrey Veen

We were hit pretty hard by Gaston and Charley a few weeks back, and although Frances did very little damage everyone in the area is bracing to be hit by Ivan in a couple of days.

I'm really glad you posted this because two days ago I found a flyer in my door stapled to a glossy Home Depot ad. The flyer itself was a "Hurricane Preparations Checklist," which is all well and good, but at the top in big bold letters it reads, "WILL YOU SURVIVE?"

Shameful indeed.

The meekly eager "tailgate parties!" ad immediately below the large hurricane graphic adds to the Simpsonsesque insensitivity...

Are you going to go to the gas station for your plywood? If there's an increase in demand, which obviously there is, then why _not_ play into that? Home Depot is a very respectable company and gives back more than most Fortune 500's. Olympians, Armed forces (A TON) and Habitat for Humanity top their good deads but it doesn't end there. It's a good corperate citizen if you look at the big picture. The "Will you survive" comment looks like a blunder that slipped past the PR dept.

I guess they didn't have to send truckload after truckload of plywood to Florida, and they could have let the shelves be empty. In the long run though, Home Depot stores in Florida will suffer. The surge doesn't outweigh the losses that are incurred after repair work is done. Everyone has to look out for themselves and that's what Home Depot is doing.

Granted Nick, but there are ways and ways of doing things. Personally I think it could've been handled better - are they going to be donating to the people who's homes have been destroyed, who have lost loved ones? What price that? Free delivery??

As a native Floridian, this doesn't infuriate me one bit.

I've lived in South Florida my entire life and have prepared for numerous storms. Hurricanes are no joke. People are told to be ready at all times.

Businesses that market supplies to people preparing for a hurricane are no different from businesses that market supplies to people preparing for a blizzard.

Thanks for the candor, Erin. From the outside, the Home Depot approach feels exploitative. It's hard to describe what went wrong here -- maybe it's the fact that they're using emotions to fuel sales, rather than offering a true hurricane-readiness resource.

I, too, believe Home Depot probaby has the right intentions here. This is likely a case of an over-eager marketing department let loose on the site.

I really don't see anything wrong with the site - It's a sellers/buyers market. I don't see the difference between adaptive path (or any company) advertising on their site and selling their services. True, they are in different industries, however, a market is a market and a product will be a product as long as someone needs it and pays for it.

Also true, the add has a Simpsonesque feel to it (As someone mentioned), but, what doesn't have that feeling...People in extreme danger and bad situation always need things - If they can buy stuff, someone will sell it to them and as it happens, HopeDepot sells stuff people currently need. Unfair? To some maybe, but, our system is set up that way. If it didn't work that way, we wouldn't be able to do what we like to do and make a living of it.

Is there a difference between a Dr. getting paid to perform a life saving operation and HomeDepot selling supplies?

I think it is a good idea: some people may not know how to prepare for a storm of that magnitude and they need all the help they can get - On the contrary, I think it's a great idea (BTW, I'm not in Florida, and feel for everyone down there)...

My 0.0002 cents.

"Is there a difference between a Dr. getting paid to perform a life saving operation and HomeDepot selling supplies?"

The only difference is that a Dr. isn't touting his expertise by instigating panic in people who are already dealing with a fragile situation. I will admit Home Depot has done a great service to people in coastal cities, but so has Lowes, and they've managed to go about it minus the emotional manipulation.

I live in South Florida and I see nothing wrong with Home Depot's home page. Residents here need to know where to go to get important supplies, such as batteries and plywood. Home Depot is one of those places, so it only makes sense they would advertise the fact that they sell them. Where is the exploitation and where is the shame? The shame is on the government for passing anti-price-gouging laws. Those laws can actually hurt the victims by inhibiting the forces of supply and demand and encourage hoarding. Supply, demand, and higher prices are what help move much needed supplies to the areas that need them the most in the quickest fashion.

I don't have an opinion on the Home Depot page, but price gouging is very real after hurricanes or big storms. People are vultures. So-called "contractors" troll the neighborhood for little old ladies hurting for shelter and in need of repairs. We saw it all to often in Houston with tropical storm Allison. Do you really want supply and demand to control when your bottled water will shoot from $1 to $5? Or your gas from $2/gallon to $5/gallon?

I was on a plane to Atlanta last week sitting next to a guy who was on the phone talking about his plans to set up a corporation for general contracting after the hurricanes. He was saying things like "We're gonna eat up that hurricane work!" and "That money just rolls in." I couldn't believe what I was hearing. It was very heartless.

Just like everything; there is a good side and a bad side to price gouging.

HIGHER PRICES CAN INCREASE SUPPLIES FOR VICTIMS
Price gouging can be beneficial. Higher prices cause buyers with less urgent needs to delay purchases of building materials, freeing the material up for sale in disaster areas. In order to bring in more of the much-needed supplies from other geographical areas, it costs potential suppliers more money and time to accomplish this deliverable. These extra costs are passed onto the buyer. This means higher prices can help bring in more supplies faster to those in need. Price gouging provides extra money for suppliers to buy larger shipments of necessities. Wholesalers and distributors can reroute supplies to disaster areas where increased demand covers the added costs and permits a greater profit. To artificially hold down prices, it can further hurt those who are already hurting. Anti-gouging laws can cause sellers not to reroute items to disaster areas and to delay selling near disaster areas.

RISKY WORK IS VALUABLE
There's no such thing as a free lunch. There are extra costs for urgent delivery and extra employees under crisis conditions. When workers rush into dangerous areas to provide supplies, services, or repairs, they often face risks, and they perform hard work and dangerous work. They work long hours, drive long distances, and they might be away from their families for a long time. They might even have damages to their own homes to worry about. For this they will probably get higher pay. This means prices must go up.

INCENTIVES FOR ENTREPRENEURS
Any extra profit someone can gain provides more incentive for them to decide to engage in the effort to bring in the supplies or provide services or repairs. The incentive of profit can motivate an entrepreneur to enter a market he might not otherwise enter to meet the needs of victims, rushing into a risky area to sell much needed supplies or repairs. This is very valuable and can help reduce waiting times for victims. Buyers can choose to pay the higher price or not. Without higher prices, the result is often long waiting times. The profit incentive can quickly bring in more supplies and more contractors.

HOARDING
In times of crisis, some folks purchase more than they need and leave nothing behind but empty shelves. Higher prices can discourage this hoarding. Anti-price-gouging laws can create more shortages.

REALITY
You might like to think that the laws of supply and demand are somehow suspended when disaster strikes. But that would be a silly fantasy. In reality, the immutable laws of supply, demand, and fluctuating prices do not magically disappear. When the supply has been decreased and yet demand is higher than ever, the perceived value is going to go way up. That's what will happen 100% of the time.

MORALITY
Anyone who owns a good can ask any selling price he chooses. Or choose not to sell at all. Laws against price gouging are immoral. Similar price-control schemes have been tried in countries like the Soviet Union, where the results were massive famines and millions of starving and dead citizens.

Great work Hal. I was just making the point that there are vultures out there who take advantage of people who are in shock, charging horrible amounts of money for shoddy work. It is important to be careful and check up on who you are dealing with.

The price gouging laws are in place for very specific reasons. And, as you failed to point out, these laws are only in place when states of emergency are declared by the state. (They're not in place 24/7/365.)

In any other circumstance, when the market is in a normal state, it's entirely fair for businesses to raise their prices. But in the event of a crisis, there is no place for price gouging.

Consider this: A hurricane has destroyed your home, all of your possessions. You maybe have the clothes on your back and a few dollars in your pocket. You're in a state of shock, having just suffered through a traumatic experience. Your first priority is finding the bare essentials to survive -- food, water and shelter.

That's when a fellow citizen -- or should we say entrepreneur --drives down the street and can offer you a can of tuna fish and a bottle of water. His price for both $100.

Based on your entire post against these laws, you should have no problem with what this citizen is doing. You may end up dying from starvation or exposure, but as long as this person is entitled to make a profit, according to you, it's OK.

It's funny -- you talk about how anti-price gouging laws are immoral, but you don't even have the slightest idea of what humanity is.

If an entrepreneur offers you a can of tuna fish and a bottle of water for $100, chances are good that another entrepreneur will offer some food and water for much less than $100. Or neighbors or charitable organizations will offer food and water for practically free.

In the event of a crisis, there is a place for price gouging. It can help to bring supplies in faster to those in need. Currently there are Florida residents waiting in half-mile lines for food, water, generators, and other supplies. With higher prices and the profit motive, suppliers could help bring in more supplies faster to those in need. Price gouging provides extra money for suppliers to buy larger shipments of necessities. Wholesalers and distributors could reroute supplies to disaster areas where increased demand covers the added costs and permits a greater profit. To artificially hold down prices, it can further hurt those who are already hurting.

The market and free pricing systems can help humanity even in times of crisis. Anti-price gouging laws are immoral and can hurt victims. And, esp. cause things like what we're seeing right now with long lines and shortages.