July 2, 2012

WARNING!

STATE DECLARES A STATE OF EMERGENCY FOR SOUTHERN COUNTIES; WARNS CONSUMERS AND RETAILERS ON POTENTIAL PRICE GOUGING!!

READ THIS FULL MESSAGE FOR DETAILS!

BE ATTENTIVE, FOLLOW THE LAW, AND AVOID FINES!!

Many of you know that thunder storms ravaged much of South Jersey over the weekend, including Atlantic, Salem, and Cumberland Counties.  What you may not know is that these incidents have prompted the state to declare a state of emergency in those counties.  What's more, a watermain break in Monmouth County has also forced the state to declare a state of emergeny in Monmouth county as well. 

When a state of emergency is declared, price gouging laws are automatically triggered to prevent any retailer from setting excessive prices.  The prohibition lasts through the state of emergency and the 30 days following when the emergency offficially ends. 

Although I don't have any first-hand information on what the conditions are on the ground in South Jersey, I have seen reports out of Maryland that residents are waiting online to buy gasoline for over an hour because many stations still dont' have electricity.  If you're experiencing the same conditions at your shop, please let me know!

While we've always had an issue over what constitutes "gouging", it is important to note that the Legislature took action on this matter right after Hurrican Katrina slammed the Gulf States in August 2005 - and they did so for a reason.  Just as I've always said, it's always a handful of dishonest individuals that ruin if for everyone.  You can continue to thank those folks for forcing you to comply with yet another mandate!

However, as you remember from previous Road Warriors and Wildfire Alerts, we notified you about how your establishment could be affected by these prohibitions after Hurricane Irene hit our shores last September.  I'm happy to say that most of you complied with those mandates, however, one operator didn't take our advice.  His settlement and legal fees were almost $50,000 - Not exactly pocket change!

The bottom line is that there’s a statute in place andd we are obligated to follow it.  Keep in mind that, if you are caught doing wrong and are fined, it won’t be nearly as bad as the negative publicity you’ll get from it.

Remember, once either the President or the Governor declares a State of Emergency for any reason the NJ Statute goes in to effect. You can read the entire statute by clicking HERE but I have summarized it for you below.

The State of Emergency declaration triggers the price gouging law (N.J.S.A. 56:8-109).

Specifically, this law makes it an unlawful practice to sell merchandise at what constitutes an excessive price increase during the State of Emergency or within 30 days of the termination of the State of Emergency. An excessive price increase is defined as:

"Excessive price increase" means a price that is excessive as compared to the price at which the consumer good or service was sold or offered for sale by the seller in the usual course of business immediately prior to the state of emergency. A price shall be deemed excessive if:

(1) The price exceeds by more than 10 percent the price at which the good or service was sold or offered for sale by the seller in the usual course of business immediately prior to the state of emergency, unless the price charged by the seller is attributable to additional costs imposed by the seller's supplier or other costs of providing the good or service during the state of emergency;

(2) In those situations where the increase in price is attributable to additional costs imposed by the seller's supplier or additional costs of providing the good or service during the state of emergency, the price represents an increase of more than 10 percent in the amount of markup from cost, compared to the markup customarily applied by the seller in the usual course of business immediately prior to the state of emergency.

A violation of the law is punishable by a fine of up to $10,000 for the first offense and $20,000 for the second and subsequent offenses. Each individual sale of merchandise is considered a separate and distinct event.

You may also take a look at a Courier-Post piece reporting on this today by CLICKING HERE 

If you have any questions, concerns or comments, please reach out to Sal at NJGCA Headquarters at 973-376-0066 or email Sal at sal@njgca.org