October 14, 2013, 2:07 PM
By Andria Cheng
A couple of Wal-Mart Stores Inc. WMT -0.11% in Louisiana drew crowds on Saturday that would make Black Friday pale, but for all the wrong reasons.
Shelves at Wal-Mart’s Springhill and Mansfield stores were picked clean in short order after a Xerox-operated Electronic Benefits Transfer system, which allows beneficiaries to use the card to make certain purchases, went haywire in 17 states.
While many retailers promptly halted use of EBT cards since the outage meant they couldn’t see cardholders’ spending limits, Wal-Mart let cardholders go ahead and buy food and other necessities at the two Louisiana stores and others across the country.
The result: in two hours store shelves were emptied. When spending limits began showing up again around 9 p.m., one woman with only 49 cents on her card, was detained after trying to ring up $700 worth of merchandise, local TV news channel KSLA reported, adding Wal-Mart said it wouldn’t press charges if she left the food.
Wal-Mart spokeswoman Kayla Whaling said what happened in those two stores “was isolated and not representative of what our stores experienced in other states.
“Our field teams and operators were working with stores when this happened,” she said.
Whaling said she doesn’t know who’s paying for the loss, except to say the company is looking into the situation. She declined to specify how much of Wal-Mart’s business is done via EBT cards.
Xerox XRX -0.19% said in an emailed statement there’s an “agreed and documented process for retailers like Walmart to follow in response to EBT outage.” It said as long as that process was followed, Xerox will reimburse Walmart and other retailers up to the dollar amount limit in any given state.
Wal-Mart has the biggest share, or about 20%, of the U.S. EBT and other related spending, estimated consultant Craig Johnson of Customer Growth Partners.
The percentage of U.S. households on food stamps program, or so-called Supplemental Nutrition Assistance Program, has risen to 13.6% last year from 8.6% in 2008, according to USA Today, citing the Census Bureau data.
Walmart U.S., through 4,000 plus stores, generated $275 billion of the retail giant’s total sales last year.
– Andria Cheng