Wal-Mart, Xerox blame each other for Louisiana shopping gone wild

NEW ORLEANS Mon Oct 14, 2013 8:42pm EDT

The Wal-Mart company logo is seen outside a Wal-Mart Stores Inc company distribution center in Bentonville, Arkansas June 6, 2013. REUTERS/Rick Wilking

The Wal-Mart company logo is seen outside a Wal-Mart Stores Inc company distribution center in Bentonville, Arkansas June 6, 2013.

Credit: Reuters/Rick Wilking

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NEW ORLEANS (Reuters) - Wal-Mart Stores Inc and Xerox Corp blamed each other on Monday after Louisiana food stamp recipients stripped bare the shelves of some Walmart stores when a computer glitch left their debit cards with no limits.

Managers of Walmart stores in the small, north Louisiana towns of Springhill and Mansfield alerted police on Saturday night that throngs of shoppers had flooded into the stores and were buying groceries using electronic benefit cards that contained no credit limits.

EBT cards are debit-type cards issued under the state's food stamp program and coded to show the amount of money available for individuals to spend. Food stamps are a federal government subsidy program for low-income people that is administered by the states.

When word got out Saturday that the EBT cards were showing no limits, card holders rushed to area Walmarts to take advantage.

"Some people had eight or 10 shopping carts full of groceries," Springhill Police Chief Will Lynd said on Monday.

Xerox said on Saturday that its systems that process EBT transactions suffered an outage stemming from routine testing of backup generators that malfunctioned. Louisiana was one of 17 states affected by the outage.

Kayla Whiting, a spokeswoman at Wal-Mart's Bentonville, Arkansas, headquarters, pointed to Xerox as the source of the problem and referred further questions to Xerox.

Xerox corporate spokesman Bill McKee provided a written company statement saying that Xerox has a "documented process for retailers like Wal-Mart to follow in response to EBT outages."

But the statement left unclear who would cover the unauthorized spending, and it referred further questions to Walmart.

Louisiana officials said they had no intention of being left holding the bag. "The outage was the result of failures by our contractor, Xerox," said Trey Williams, a spokesman for the Louisiana Department of Children and Family Services.

He said emergency procedures in place with Xerox allow retailers to call a phone number and receive authorization for purchases any time the EBT system is down. "Some retailers chose not to follow the process," he said. "Those businesses are only being reimbursed for the (maximum) amounts on individual cards," he said.

Williams said that amounts transacted above the cards' available balances were returned to Wal-Mart marked "as insufficient funds."

He could not provide an estimate of the total amount of overspending or say who will cover it in the end. "That's a conversation between Xerox and the retailer," he said.

CARTS FULL OF GROCERIES

Springhill's Lynd arrived at his town's Walmart store at about 7 p.m. local time and found a few hundred shoppers jamming checkout lines with carts filled to overflowing.

Lynd said he told the manager that the store had a right to refuse service, but the manager said she had contacted Wal-Mart headquarters and was told to accept the cards.

The shoppers "decimated the grocery section of Walmart," Lynd said.

The shoppers broke no laws, Lynd said, adding that police intervention was not required to disperse the crowd. At about 9 p.m., Walmart said that the glitch had been fixed and the EBT cards were again showing appropriate spending limits.

"When they heard the announcement, people just left their carts in place and walked out of the store," Lynd said.

Mansfield Assistant Police Chief Gary Hobbs reported a similar scene in his community. He said that several other grocery stores in the area temporarily stopped accepting EBT cards when they became aware of the glitch, but Walmart continued.

(Reporting By Kathy Finn; Editing by Greg McCune and Steve Orlofsky)

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Comments (9)
Mike91163 wrote:
I work for a manufacturing company who’s a small supplier/vendor to Walmart, and I can tell you the following 2 truths will apply here:

#1: WALMART MAKES ALL THE RULES, AND IS NEVER WRONG.

#2: IF WALMART DOES MAKE A MISTAKE, SEE RULE #1.

For example, we have a signed, legal agreement that Walmart will pay our invoices as net 60 days. We’ll receive a check from them somewhere in the 80-90 day range, which is always dated as of the 60-day mark…yet. multiple invoices included in said check will be anywhere from 3% to 20% below the agreed amounts. When you finally get an answer 2-3 weeks later from someone in Bentonville as to why amounts were deducted, we’ll receive such answers as “damaged in transit” (their specified carrier, no less) or “customer returned” (which Walmart will return to us 3-4 months later). It is completely impossible to determine if their claims (read: excuses) are correct.

Working with Walmart is simple: They make all the rules, they can change said rules at their whim, and if you don’t like it, they’ll take their business elsewhere.

Walmart did not become the world’s largest and most profitable retailer by being an honest, fair, and above-board business partner…and if their customers actually knew what a sleazy outfit they are, the public at large would likely shop elsewhere for the overpriced junk they sell.

With regard to the above story, I will guarantee that, at the end of the day, Walmart will get paid in full for the goods they sold; whether it’s Louisiana or Xerox, doesn’t matter-they WILL get paid.

Oct 15, 2013 7:30am EDT  --  Report as abuse
Shame on those shoppers who essentially “looted” Walmart. Sadly, folks who act that way know no shame. In fact, they feel justified. No doubt there are some who are bragging about how they got one over on Walmart. What’s more, is they are likely being congratulated by all their friends who love to bash Walmart. This is our society.

Oct 15, 2013 7:46am EDT  --  Report as abuse
What’s really bad are those shoppers spent OUR money (yes the goverment’s money is provided by us, check your pay stub) and it didn’t matter because they feel entitled. Sad commentary on our society.

Oct 15, 2013 8:15am EDT  --  Report as abuse
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