Legal Definitions - profiteering

Profiteering refers to the act of making excessive or unreasonable profits by taking advantage of unusual or exceptional circumstances, particularly when there is a high demand for essential goods or services due to a crisis or emergency.

Here are some examples to illustrate this concept:

• Natural Disaster Exploitation: After a severe hurricane devastates a coastal region, a local hardware store immediately raises the price of plywood from $25 per sheet to $150 per sheet. Residents, desperate to board up their damaged homes and protect against further elements, have no choice but to pay the inflated price.

  This illustrates profiteering because the hardware store is exploiting the unusual circumstance of a natural disaster and the resulting urgent need for building materials to make excessive profits far beyond normal market rates.

• Public Health Emergency: During a widespread viral outbreak, a small online retailer begins selling hand sanitizer and medical-grade face masks, which are suddenly in critical demand, for ten times their usual retail price. The retailer buys up available stock and resells it at exorbitant rates, capitalizing on public fear and the urgent need for protective supplies.

  This demonstrates profiteering as the retailer is taking advantage of the exceptional circumstance of a public health emergency and the resulting scarcity of essential hygiene products to generate excessive profits from a vulnerable population.

• Infrastructure Failure: A major water main breaks, cutting off the water supply to a large urban area for several days. A local convenience store, which normally sells bottled water for $2 per gallon, immediately starts selling it for $15 per gallon, knowing that residents have no other immediate source of potable water.

  This is an example of profiteering because the store is exploiting the unusual circumstance of a critical infrastructure failure and the immediate, essential need for drinking water to achieve excessive profits from a captive market.