State AG's office sees surge in alleged price-gouging complaints

Mark Hicks
The Detroit News

The Michigan Department of Attorney General is calling on Menards to stop alleged price gouging following 18 complaints from consumers about over-marked items sold amid the coronavirus pandemic that has seen a surge in complaints about other alleged gouging.

Attorney General Dana Nessel.

Attorney General Dana Nessel sent the company a cease-and-desist letter Tuesday after investigators from her office found the company "appears to be exploiting public fear about coronavirus disease 2019 (COVID-19) through a systematic effort of raising prices," representatives said in a statement. "Investigators discovered the store last week doubled the price of cleaning products like bleach and significantly raised the price of face masks while tying their purchase to an in-store rebate."

The Attorney General’s Office started receiving complaints about Menards early last week, including one from a customer at the South Haven location who said he was initially charged $4.99 for a gallon of bleach listed as $2.54.

“Big box stores are not immune to the Michigan Consumer Protection Act or the Governor’s Executive Order,”Nessel said in a statement. “Large corporations must also play by the rules, and my office will work diligently to ensure this state’s consumers are treated fairly and not abused by businesses seeking to unlawfully jack prices up to line their pockets with profits at the expense of the public during this time of great need.”

Menards representatives did not immediately respond to a request for comment Tuesday night.

The company has 10 days to respond to the cease-and-desist letter or Nessel's office will further investigate the matter and potentially take legal action.

On Sunday, Gov. Gretchen Whitmer issued an executive order that says no business or person can sell products grossly above the purchase price at which they bought the product.

It also says products cannot be sold or offered at a price more than 20% higher than what was listed as of March 9 "unless the seller can justify the higher price due to an increase in the cost of bringing the product to market," state officials said.

Retailers also may be in violation of the Michigan Consumer Protection Act if they are:

•Charging consumers a price that is grossly in excess of the price at which similar property or services are sold.

•Causing coercion and duress as the result of the time and nature of a sales presentation.

Residents are urged to report concerns to the Consumer Protection Act online or by calling (877) 765-8388.

Due to the high number of complaints related to COVID-19, Nessel extended hours of operation for her Consumer Protection intake team, making phone lines available until 11 p.m. Tuesday. The extended hours will be evaluated on daily and continue if necessary to meet demands. The consumer tip line is generally open between 8:30 a.m. and 4:30 p.m. Monday through Friday, the attorney general's office website said.

As of early Tuesday, the office had received 363 complaints, with nearly 80% of those submitted since 1 p.m. Friday.

Written complaints still are being reviewed and the number for complaints received electronically since Friday was not immediately available.