Arkansas Price Gouging

Price gouging is when a business charges more for goods or services than its regular, everyday selling price. Unethical, unscrupulous businesses engage in price gouging during times of emergency, such as the recent ice storms.

IN Arkansas, state law prohibits businesses from price gouging in the wake of a disaster or state of emergency. The law is an amendment to the Arkansas Deceptive Trade Practices Act, which is enforced by the Attorney General and county prosecutors.

The law prohibits businesses from charging more than 10% above their regular price of the goods or services in the event of an emergency. The scope of the law is very broad and is intended to cover anything that may be needed in the event of a state of emergency. Examples of items and services covered by the law include: food, water, flashlights, batteries, blankets, plywood, nails, hammers, medicine, bandages, lumber, and fuel.

The price gouging law is put into effect whenever a state of emergency is declared by the Governor or the President. It remains in effect for at least 30 days and can be extended another 30 days by the local governing body if necessary to protect the lives, property, or welfare of the citizens.

While the law sets a general 10% cap on prices during an emergency, businesses may legally charge a higher price if they can prove that the higher price is directly attributable to additional costs imposed by the supplier or the result of additional costs for labor or materials used to provide the goods or service. In such a limited situation, the business may charge no more than 10% above the total of the cost to the business plus the markup which would customarily be applied by the business for that good or service in the usual course of business immediately prior to the onset of the state of emergency.

A violation of the Arkansas law is a violation of the Deceptive Trade Practices Act and can result in injunctive relief, restitution to consumers, costs, attorneys' fees, and civil penalties up to $10,000 per violation. A violation is also a Class A misdemeanor, which carries a penalty of one year in jail or a $1,000 fine, or both.