News Story

If Only Other Stores Could Have Raised Toilet Paper Prices

Buyer happy with $1.75 per roll from convenience store versus 32 cents and no rolls at big stores

Michigan resident Brandon Borke found his toilet paper.

Toilet paper has become a scarce commodity from coast to coast, with stores sold out and anxiety growing. Borke used his search for the product to illustrate a lesson in how price controls are the wrong prescription for temporary shortages caused by panic-induced spikes in demand.

Borke went on Facebook to describe his search for toilet paper, which took him to six stores, none of which had any for sale. Eventually, his fortunes changed, however.

“I filled up my car at a gas station on my way home. I joked with the cashier, ‘I don’t suppose you have toilet paper?’” Borke wrote. “He calmly replied, ‘Of course we do.’ I was dumbfounded.”

Borke said he wondered how a small gas station still had an incredibly well-stocked section of toilet paper.

Then he saw why: It was priced at $1.75 per roll.

“Here is the crazy thing; as someone who only needed a few rolls, I was happy to pay the high price,” Borke wrote. “In fact, the high price of these rolls of toilet paper discouraging unnecessary hoarding was the only reason there was any for me to buy at all.”

“This IS NOT price gouging,” Borke continued. “This IS an example of market prices. It is one thing to talk about economics and the free market in theory. This. Is. Real. Life.”

Economists call it “the rationing effect of prices.” People tend to buy less of something when it costs more.

Borke posted a picture of the four double rolls of toilet paper he bought for $6.99, or a $1.75 per roll.

Still-circulating advertisements from Menards feature 12 double rolls of toilet paper for just $3.82, or 32 cents per roll. This was the price that held before the pandemic received widespread attention in the U.S. But it meant nothing because for several days, the stores had none of the product at any price.

The ads have since been updated offering the same low price, however, Menards is telling customers: “Unfortunately, the vendor is unable to supply this item at this time. Please check back again in the future.”

If Menards had sought to slow the run on the product by raising prices such as that gas station, it may have run afoul of a campaign by Michigan Attorney General Dana Nessel to seek out and punish what she describes as price gouging. A March 23 announcement from her department reported that she had assigned a team of special agents to gather information on consumer complaints of price gouging.

“Our objective is to make sure business owners are following the laws Michigan has in place to protect consumers, and public awareness of price-gouging can offer valuable support in our efforts to keep companies honest,” Nessel said in a press release. “If that can be accomplished without legal action, then that is a path we will pursue. But if stores continue to disregard the rules and raise their prices beyond justifiable amounts, then we will hold them accountable.”

The attorney general also urges consumers “to purchase what they need, and to not buy in large amounts — or at prices — that are based on fear.”

Also, Gov. Gretchen Whitmer issued a March 22 executive order that states "no business or person can sell products grossly in excess of the purchase price at which they bought the product." The state has ordered 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."

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.