Walmart News

Based on the number of readers writing us from all over the country with almost the exact same complaint, we suspect that a thieving hacker somewhere in New York City is enriching himself at the expense of Walmart MoneyCard holders. Even worse, Walmart appears to have done nothing about this.

Linda P. of Farmington, Missouri, wrote us on Sept. 2 to complain: “[S]ome man in Brooklyn, New York, got my Walmart card number and made a duplicate card through Walmart's system. That man stole every penny I had on my card and Walmart allowed it to happen. He spent MY money that I earned at a Target in Brooklyn, New York [….] When I called Walmart, I explained to them that the money on that card was all I had for another month. I asked them if they could give me a voucher for food, or drinks. They said NO! […] I may lose everything I have and all Walmart has to say is ‘wait until the posted date’? This is unacceptable. Thank you, Walmart, for ‘guaranteeing’ my money.”

Kelly L. of Canton, Ohio, posted a similar complaint on Sept. 13: “I have had my Walmart money card for almost a year now [….] on 09-09-2013 I woke up to check my account and the balance was $1.41 […] the day before, there were 5 purchases from a Target store in New York [….] I am waiting for [Walmart] to send me a new card so I can get the amount owed to me, then I am closing my account.”

Similar problems

Two Californians reported similar problems on Sept. 15: Paul H. from Downey said “I just got paid Friday and deposited most of my check on my Walmart money card. Bought a few groceries with the card, went home and paid my Sprint bill, all was well. The next day on the way to the park I stopped at the Walmart neighborhood market to pick up some things for the grill, at check out my card was declined [….] I thought I would check my account on my phone. After signing in I saw a balance of zero, I thought, what the hell? I checked my transactions and saw the swipe reload, groceries, Sprint and three charges from Target. [….] Once they saw those New York charges and saw that that same day I was making charges in California they should have stepped up and said we know this is a problem and we will get it resolved. But we'll see what happens; I've got a feeling it's not gonna turn out good for me.”

The same day, Jackie S. of Citrus Heights reported: “I have had a Walmart money card in Sacramento California for the past 7 years [….] this past Friday I used my card at Starbucks early Friday morning; by the time I went to pay for my lunch my whole account was wiped clean. After calling Walmart, they said that somebody in New York, New York used it at a Target when clearly I'm in Sacramento, California; they say I can file a claim but it's going to take probably 45 days to get my 1,500 dollars back.”

Despite the frequent mention of Target, there’s no evidence suggesting that company has anything to do with this scam; it’s simply where the hacker or hackers chose to spend their ill-gotten money (there being no Walmart stores in New York City).

What to do

Walmart has not yet responded to a request for comment. 

If you’re a Walmart MoneyCard holder whose account has been hacked, you should immediately contact Walmart (via email rather than over the phone, so you’ll have an electronic paper trail of your complaints), and also contact your local police department to determine how to file a fraud complaint. 

Crime rates fell across the United States in the 1990s. But in counties where Wal-Mart built stores, the decline was slower, a new study finds. 

"The crime decline was stunted in counties where Wal-Mart expanded in the 1990s," says Scott Wolfe, assistant professor of criminology and criminal justice at the University of South Carolina and lead author of a new study. "If the corporation built a new store, there were 17 additional property crimes and 2 additional violent crimes for every 10,000 persons in a county."

The study, released last month in the British Journal of Criminology, was co-authored with David Pyrooz, assistant professor of criminal justice and criminology at Sam Houston State University.

The study was not intended to criticize Wal-Mart, he says. Instead, it attempted to answer the unexplored question of whether Wal-Mart could equate with either more or less crime.

"There have been dozens of studies on the 'Wal-Mart effect' showing the company impacts numerous outcomes closely related to crime. Our objective was to determine if the Wal-Mart effect extended to understanding crime rates during arguably one of the most pivotal historical periods in the study of crime," Wolfe says.

The "Wal-Mart effect" is a catch phrase for a wide range of effects -- some good, some bad -- when the company opens a new store. It includes the suburbanization of the local shopping experience and lower prices for everyday items, as well as eroding local retailers and driving down local wages.

3,109 counties 

Wolfe and Pyrooz based the study on 3,109 U.S. counties. They focused on Wal-Mart's expansion in the 1990s, a time of dynamic growth for the company and falling crime rates nationally. During that decade Wal-Mart expanded in 767 of those counties.

The researchers suggest that there may not be a direct cause-and-effect relationship between Wal-Mart's presence and crime rates.

"They are very strategic about where they build stores," Wolfe said. "There is something unique about the counties that Wal-Mart selects."

He said that during the period studied, Wal-Mart tended to expand in counties with higher than average crime rates. These counties were more likely see Wal-Mart build even after accounting for crime-related predicators, such as poverty, unemployment, immigration, population structure and residential turnover.

The researchers speculate that much of this relationship occurred because Wal-Mart finds better success building in communities that are less likely to protest the company's arrival.

"Counties with more social capital — citizens able and willing to speak up about the best interests of the community — tend to have lower crime rates," Pyrooz said. "Counties with more crime may have less social capital and, therefore, less ability to prevent Wal-Mart from building."

Wolfe and Pyrooz say the reason why Wal-Mart lessens a decline in crime is a complex question not easily answered by data typically available. Their findings didn't reveal that Wal-Mart growth corresponded with increases in poverty, economic disadvantage or other factors associated with crime.

"More research is needed to uncover why the Wal-Mart effect extends to crime," Wolfe says. "Does it reduce community social cohesion or simply increase opportunities for theft and other crimes in specific store locations that are great enough to influence county crime rates? These are questions that remain."

In preparation for Walmart's annual stockholder meeting, which is to be held June 6, a group of Walmart employees went on strikelast Friday, demanding better pay and working conditions.

The overall story “Walmart employees allege various forms of mistreatment” has been ongoing for years. As early as 2004, for example, the New York Times reported that night-shift employees were locked in the store overnight and forbidden to leave on pain of firing, even in case of medical emergencies.

The latest chapter in the story unfolded when the sporadic walk-outs started last week. The workers' group Organization United for Respect at Walmart, also known as “OUR Walmart,” is behind the strike.

OUR Walmart's complaints can be broken down into three basic categories: workers' pay is inherently too low; working conditions are often poor; and employee scheduling tends to be erratic and last-minute, making it impossible to try holding a second job or any other activities, since you never know in advance when or if Walmart expects you at work.

Sales slipping, profits off

Walmart for its part takes the position that it cannot afford to offer pay as high as OUR Walmart wants, and that its various workplace conditions — such as its pregnancy policies — meet or exceed legal requirements.

When Masslive.com reported the May 30 protest at a Walmart in Chicopee, Massachusetts, it said: “The company has denied that workers are underpaid or mistreated, and blamed much of the furor on the United Food and Commercial Workers International Union, which has tried to unionize the company’s workers.”

It's not only Walmart that says times are tough. Investors are complaining too.

Last month, John Schwinghamer, a Montreal portfolio manager, said he sold all of his shares of Wal-Mart after a key measure of the company’s profitability fell in consecutive quarters for the first time in at least 20 years. 

“This is a game changer and a warning sign to investors that Wal-Mart is facing challenges in the competitive environment that they may not easily overcome this time,” said Schwinghamer, according to the Wall Street Journal's Moneybeat blog.

Wal-Mart’s earnings per share dropped by 3.5% in the quarter ended April 30, following a 20% drop in the previous quarter, according to S&P Capital IQ. 

Taxpayers' burden

On June 2, the Christian Science Monitor ran a guest column by Robert Reich, former Secretary of Labor under President Clinton, discussing the issue. Reich, who compared the Walmart strikers with civil rights protestors from 50 years ago, summarized the issue as follows:

Although Walmart is no Bull Connor, it’s the poster child for keeping low-wage workers down. America’s largest employer, with 1.4 million workers, refuses to provide most of them with an income they can live on. The vast majority earns under $25,000 a year, with an average hourly wage of about $8.80.

You and I and other taxpayers shell out for these workers’ Medicaid and food stamps because they and their families can’t stay afloat on what Walmart pays. (I’ve often thought Walmart and other big employers should have to pay a tax equal to the public assistance their workers receive because the companies don’t pay them enough to stay out of poverty.)

Reich went on to discuss various lawsuits against the company. Last January, the National Labor Relations Board filed a consolidated complaint against Walmart, citing allegations that in at least 13 states, the company violated the rights of its employes who were engaged in legal acts of employee protest.

An NLRB press release dated January 15 listed the following violations allegedly committed by Walmart:

During two national television news broadcasts and in statements to employees at Walmart stores in California and Texas, Walmart unlawfully threatened employees with reprisal if they engaged in strikes and protests.

At stores in California, Colorado, Florida, Illinois, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, North Carolina, Ohio, Texas and Washington, Walmart unlawfully threatened, disciplined, and/or terminated employees for having engaged in legally protected strikes and protests.

At stores in California, Florida, and Texas, Walmart unlawfully threatened, surveilled, disciplined, and/or terminated employees in anticipation of or in response to employees’ other protected concerted activities.

Not all the protests are taking place at Walmart stores. On June 2, OUR Walmart held another protest and posted photos on its Facebook page under the caption “#Walmartstrikers & #Walmartmoms from around the country march to Walmart Chairman Rob Walton's house in Phoenix, calling for an end to retaliation & bullying.”

If you have a Sam's Club or Walmart credit card (as opposed to pre-paid money card), you'll see a different logo next time you're issued a new plastic rectangle — though whether you'll see changes in your account's financial specifics remains to be seen.

However, stockholders in Walmart or various financial companies have good reason to take interest in the news that, starting this summer, Walmart credit cards will be branded with the MasterCard logo, rather than Discover.

The Wall Street Journal (followed by other business-news sites) announced the changes Friday morning:

Wal-Mart Stores Inc. co-branded credit cards will soon carry MasterCard Inc.'s logo under a deal the retailer struck with General Electric Co.'s banking arm to switch from Discover Financial Services.

As of early Friday afternoon, Walmart stock rose slightly in value, whereas the stock price of every other company involved in the deal actually dropped, which might be bad news for investors.

But what about consumers — if you have a Walmart or Sam's Club card, what if any changes will you see after switching to MasterCard?

That remains uncertain, although it is theoretically possible you'll see a slight improvement (drop) in store prices due to another recent news story involving Walmart and credit cards: at the end of March, Walmart filed a lawsuit in Arkansas (where the company is headquartered) against the VISA company, claiming that the “swipe fees” it charges merchants are too high.

In court documents, Walmart argued that “The anticompetitive conduct of Visa and the banks forced Wal-Mart to raise retail prices paid by its customers and/or reduce retail services provided to its customers as a means of offsetting some of the artificially inflated interchange fees.”

Pay it off

Regardless of what company logo is on your credit card or what stores you patronize as a shopper, it's important to pay off your credit card bill in full every month, lest you pay interest rates high enough to wipe out any presumptive savings from shopping at a cheaper store.

If you can't afford to do this, and have no choice but to carry a balance on the card from month to month, then at least avoid putting further charges on the card until you get it paid off, because you will be charged high interest on every additional purchase you make.

Despite those swipe fees Walmart complained about in court, the fees credit card companies collect from merchants whenever customers use their cards, the bulk of credit card company profits come from interest payments. Don't let their extra profits empty your pocket.

One in four U.S. families are now "unbanked," meaning they don't have a checking or savings account at a bank or credit union. Most are low-income and live in neighborhoods with high poverty rates. They handle their finances by using expensive money transfer services and payday loans.

Did we mention they're likely to be WalMart shoppers? 

Walmart has been targeting this group for some time, with its Walmart Money Card, MoneyCenter and other products. Now it's adding something called  "Walmart-2-Walmart," a domestic money transfer service that will let consumers send money from one Walmart store to another, starting April 24.

Walmart says prices for the new service will be up to 50% less than that charged by competitors.

Clear fees

“Walmart-2-Walmart offers a clear fee structure with just two pricing tiers: customers can transfer up to $50 for $4.50 and up to $900 for $9.50,” said Daniel Eckert, senior vice president of services for Walmart, on a call to investors, analysts and press, Forbes.com reported. 

Besides its other services for unbanked customers, Walmart and American Express operate Bluebird, an alternative to traditional debit and checking accounts. There are no minimum balance requirements or monthly maintenance fees, although there is a $2 fee for those not enrolled in direct deposit.

Saying one thing and doing another may be common but it's illegal when it involves advertising, as Walmart stores in New York State have learned. 

New York Attorney General Eric T. Schneiderman today announced that Walmart has agreed to settle charges that it advertised a nationwide sale of Coca-Cola soft drinks but charged customers in 117 stores across New York State more than the advertised sale price.

In a statement, Walmart apologized and said it was working to prevent similar incidents in the future. 

"We strive for accuracy, and we are further enhancing our procedures to help ensure proper promotional pricing. We apologize for any inconvenience to our customers. They can rest assured that Walmart is committed to delivering the products they need at everyday low prices," Walmart said.   

In June 2014, Walmart launched a Father’s Day sale, including advertising 12-packs of Coca-Cola products for $3.00. However, when consumers in New York State attempted to purchase the sale items, customers were routinely charged $3.50.

According to Schneiderman, in one Buffalo-area Walmart store a consumer brought the error to the attention of staff and was told that the newspaper circular was a national ad and that it did not apply in New York.

When consumers complained about being charged more than the advertised price, Walmart staff falsely told them that New York has a "Sugar Tax."

One set of rules

“There has to be one set of rules for everyone, no matter how rich or how powerful, and that is why our office must ensure that even the largest corporations cannot advertise one price and then charge a higher one to New Yorkers,” said Attorney General Schneiderman. 

Schneiderman said consumers were routinely overcharged in stores across the state. It was determined that cash registers were programmed to not recognize the advertised sale price. On June 12, 2014, the Attorney General’s Office requested that Walmart immediately adjust prices to the amount advertised and the chain complied.

Big box stores are fine but Walmart would like to have a bigger piece of the online space as well, so the giant retailer is launching a $50-per-year program that will compete with Amazon Prime.

Walmart says deliveries will be made within three days. Prime, priced at $99 per year, promises two-day delivery on most purchases and throws in a lot of extras like free video and music streaming.

Walmart isn't saying much about the program yet -- said to be code-named Tahoe -- and hasn't yet seen fit to post anything about it in its newsroom, which is generally pretty devoid of anything timely, something the big retailer might want to fix if it really wants to become an online player. Getting stuff into the weekly paper won't quite cut it.

Walmart currently offers free shipping on purchases above $50 so its cost-conscious customers may not be too eager to shell out an extra $50 a year when they could just be sure to order $50 worth of goods each time they buy from Walmart.com.

Perhaps taking a page from Google, or maybe just because it doesn't have a clue how to sell it, the new program will initially be offered by invitiation only, according to press reports.

Not too exciting

So far, no one seems too excited about Walmart's prospects.

“Amazon’s Prime program offers a lot of comprehensive benefits that Walmart will not be able to offer anytime soon,” said David Biernbaum, senior marketing and business development consultant at David Biernbaum Associates, in a Forbes report. “[Tahoe] will carry only what Walmart carries, and believe it or not, that selection is fairly limited to mostly commodities, basics and every day pantry items.”

As Biernbaum notes, one of Prime's major strengths is that it includes just about anything. You can find a saxophone reed, ketchup, an obscure auto part or a lawn tractor on Prime, order it with a single click and, in most cases, find it on your doorstep two days later.

Although Amazon doesn't release sales information for Prime, anecdotal evidence indicates that many consumers habitually go first to Prime when they need something and only in rare circumstances go elsewhere to complete the purchase. That's a habit that's going to be hard to break.

Jet.com's dreams

Fledgling online retailer Jet.com is also in the pre-launch phase of its Prime-like shopping service but denies that it has Prime in its sights.

"While a lot of outlets have been quick to make the Amazon connection because it makes for a good headline, Jet isn’t actually trying to directly compete with Amazon or get existing Amazon Prime customers," said Jet publicist John Harrington, who besides his other talents is apparently able to discern the motivations of reporters and editors.

According to the Commerce Department, currently only 8% of retail sales happen online, which leaves a lot of space for Amazon and Jet to co-exist, Harrington said in an email to ConsumerAffairs a few days ago, after we reported on Jet's plans.

"The e-commerce space is going to be growing rapidly over the coming years and Jet’s aim is not about competing with Amazon, but rather about offering current or future shoppers an option that’s focused on getting them the lowest possible price," he said.

"Feel free to reach out if you’re in need of anything for a future story!" Harrington exclaimed. We took him up on that and asked if we could get an inside look at Jet.com's beta site so we could report on it more fully.

That wasn't in the cards, though. Saying the site was still in "a pretty early beta," Harrington declined, although Re/code and other tech-focused publications have been allowed inside, perhaps reflecting Jet's faith that the key to successful retailing is technology, rather than those pesky consumers. 

Walmart is helping change the way food animals are trated across the retail industry. 

Walmart is asking meat producers, egg suppliers and others to use antibiotics only when needed for disease prevention or treatment, not to fatten their animals, a common industry practice.

It is also trying to halt pig gestation crates and any other type of housing that doesn’t give an animal enough room to move. Walmart is also requesting that dehorning and castration be done with painkillers.

Activists are applauding Walmart touting its guidelines and saying it could become the blueprint of the food industry. McDonald’s Corp., Nestlé and Starbucks Corp., have already pledged to reduce or eliminate the use of gestation crates for pregnant sows and otherwise improve animal treatment.

Consumer demand

Much of the Walmart's motivation is no doubt simple market economics. Shoppers are more aware of their health than ever before and it’s no longer just the food pyramid. People want to know where their food comes from, what the animals are fed and how they are treated. Consumers are pushing for more transparency when it comes to how things are grown.

Walmart said its own research showed 77 percent of its shoppers said they will increase their trust and 66 percent will increase their likelihood to shop at a retailer that improves the treatment of livestock.

Activists have been loud and clear about abuses that have gone on in the farms that supply food to Walmart and other large companies.

According to Kathleen McLaughlin, senior vice president of Walmart’s sustainability division, Walmart is now asking for suppliers to give them annual reports on antibiotic use and animal welfare and post them on their own websites.

The World Organization for Animal Health outlined Five Freedoms that it wanted to see for animal health. Walmart has adopted those and they include freedom from pain and injury, and freedom to express normal behavior.

Wayne Pacelle, president and CEO of The Humane Society of the United States, says he is thrilled that Walmart has taken a stand and said he feels that the impact is a “game-changing progress and signals to agribusiness that the era of confining farm animals is ending.”

Walmart's guidelines also to their sister company, Sam’s Club.

Before long, paying for shipping when you order something online will be unthinkable.

During the holiday shopping season, nearly all retailers waive shipping charges for purchases over a certain amount. Amazon.com's Prime account, which costs $99 per year, provides free two-day shipping all year round.

Walmart, which countered Prime with its own two-day shipping program for half the cost, has now upped the ante, saying it will provide free two-day shipping on more than two million items with no membership fee.

If the item you purchase is not among the two million covered by the new program, Walmart says it will provide free shipping if the order totals $35, down from $50. Items shipped for pick-up at stores have no price threshold.

Fighting back against Amazon

As Amazon has continued to dominate the online retail space, Walmart has fought hard to maintain its position as the nation's largest retailer. In August it acquired Jet.com, another online retailer, to shore up it's ecommerce offerings.

Jet.com was co-founded by Marc Lore, who sold his previous company – Diapers.com – to Amazon in 2010. Jet.com officially launched in 2015, promising consumers lower prices in exchange for longer delivery times.

Lore is now president and CEO of Walmart U.S. eCommerce, and he says the new free two-day shipping program gives Walmart a powerful weapon.

“Two-day free shipping is the first of many moves we will be making to enhance the customer experience and accelerate growth,” he said.

What's covered

The free two-day shipping will cover items like household products, including diapers, pet products, and food. It will also cover cleaning supplies, grooming products, and top-selling toys and electronics.

Walmart said some consumers who had signed up and paid the $49 for the Shipping Pass service would get refunds.

For consumers, it may be the clearest signal yet that the day is fast approaching when they will never be asked to pay for shipping. At least, that's where Lore thinks things are going.

“In today's world of e-commerce, two-day free shipping is table stakes," he said on a conference call with analysts and reporters. "It no longer makes sense to charge for it.”