What Is Price Gouging?

Price gouging generally means sharply raising prices on essential goods and services to take unfair advantage of people during an emergency or disaster. In the United States it is regulated mainly by state law, and most state laws apply only after an emergency is declared or during an abnormal market disruption. Each state sets its own test, often a percentage cap compared with pre-emergency prices, and complaints usually go to the state attorney general or consumer protection agency.

What the law says

• A 2006 Federal Trade Commission report stated that there is no federal statute prohibiting price gouging. Price gouging laws are generally state laws, usually triggered by an emergency declaration. FTC, Investigation of Gasoline Price Manipulation and Post-Katrina Gasoline Price Increases (2006)
• The same FTC report noted that states that prohibit price gouging had not adopted a common definition or standard for the practice, so what counts as gouging depends on each state's law. FTC, Investigation of Gasoline Price Manipulation and Post-Katrina Gasoline Price Increases (2006)
• Example (California): Penal Code section 396 bars raising prices on many consumer goods and services by more than 10% after an emergency has been declared; for items a seller began offering only after the emergency, the price may not exceed 50% above the seller's cost. California Attorney General, FAQs on Price Gouging
• California's protections begin when the President, the Governor, or a city or county executive declares an emergency and generally apply for 30 days; for reconstruction and emergency cleanup services they last 180 days, and officials can extend them. California Attorney General, FAQs on Price Gouging
• California's law covers goods and services such as rental housing, hotels and motels, food and drink, emergency and medical supplies, home heating oil, building materials, transportation, storage, gasoline, and repair and reconstruction services. Landlords generally cannot raise rent more than 10%, even if a tenant offers to pay more. California Attorney General, FAQs on Price Gouging
• In California, a seller may not be liable if it can prove a price increase is directly attributable to increases in the cost of labor or materials. Violations can bring up to one year in county jail, a fine of up to $10,000, or both, plus civil penalties of up to $2,500 per violation. California Attorney General, FAQs on Price Gouging
• Example (New York): state law prohibits charging unconscionably excessive prices for essential goods and services during an abnormal market disruption, such as a natural disaster or power failure; a governor's emergency declaration is not required for the law to apply. New York State Attorney General, Price Gouging
• The New York Attorney General says a seller may have price gouged if it raises the price of an essential good or service by more than 10 percent of the price charged right before the disruption, and that businesses controlling over 30 percent of the market can be liable for any price increase. A seller may defend an increase by showing it covered higher costs or preserved its prior profit margin. New York State Attorney General, Price Gouging
• Example (New Jersey): the state's law prohibits excessive price increases during a declared state of emergency and for 30 days after it ends, defining excessive increases as more than 10 percent above the normal pre-emergency price. Civil penalties are up to $10,000 for a first offense and $20,000 for later offenses, with each sale a separate event. New Jersey Office of Attorney General, press release (January 24, 2026)
• The FTC, Justice Department, and CFPB have warned consumers about price gouging on essential goods and services after natural disasters; the FTC chair said the agency works in partnership with state enforcers, and the FTC takes reports of scams and bad business practices at ReportFraud.ftc.gov. FTC, press release (October 2024)

Related

• The Magnuson-Moss Warranty Act: Your Federal Warranty Rights
• What Is a Lemon Law?
• Where to File a Consumer Complaint
• Consumer Protection by state

General legal information, not legal advice. Laws change and local rules can differ; check the linked official source or talk to a lawyer about your situation.