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AG Nessel Sends Cease and Desist Letter to Menards For Price-gouging
March 17, 2020
LANSING – The Michigan Department of Attorney General sent a cease and desist letter today to Menards after the Attorney General’s office received 18 complaints from consumers about face masks, bleach and other products being sold at high prices.
Investigators from the Attorney General’s office have found that Menards appears to be exploiting public fear about coronavirus disease 2019 (COVID-19) through a systematic effort of raising prices. 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 began receiving complaints about Menards early last week, including one from a customer at the South Haven location.
“Big box stores are not immune to the Michigan Consumer Protection Act or the Governor’s Executive Order,” Attorney General Dana Nessel said. “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 will have 10 days to respond to the letter or the Attorney General’s office will further investigate the matter and potentially take legal action. Menards and the state could also agree to an assurance of voluntary compliance.
Due to the high number of complaints related to COVID-19, Attorney General Nessel has extended hours of operation for her Consumer Protection intake team, making phonelines available until 11 p.m. today. (Note: The consumer tip line is generally open between 8:30 a.m. and 4:30 p.m. Monday through Friday.)
As of 11 a.m. today, the Attorney General’s office has received a total of 363 complaints, with nearly 80 percent of those being submitted since 1 p.m. Friday. However, written complaints are still being reviewed and the number for complaints received electronically since Friday was not immediately available.
Gov. Gretchen Whitmer issued an executive order Sunday to specifically address price-gouging related to COVID-19. That order, in part, states no business or person can sell products grossly in excess of the purchase price at which they bought the product. It also says products cannot be sold or offered at a price that’s more than 20 percent higher than what it was listed as of March 9, 2020 – unless the seller can justify the higher price due to an increase in the cost of bringing the product to market.
Meanwhile, legislation introduced in the Michigan Senate would create additional tools for investigators to rein in price-gouging. The bipartisan bills would add price-gouging protections during an emergency declaration or market disruption. Nessel recently stated her support for the legislation.
Retailers may be in violation of the Michigan Consumer Protection Act if they are:
- Charging the consumer a price that is grossly in excess of the price at which similar property or services are sold; and
- Causing coercion and duress as the result of the time and nature of a sales presentation.
Michigan residents are urged to report any violation of the Consumer Protection Act online or by calling 877-765-8388.