Tuesday, October 15, 2013

Wal-Mart’s Bad Business Policy: Let Looters Loot

Wal-Mart is starting to reevaluate its business:

Wal-Mart Stores Inc is taking a number of steps, from closing poorly performing stores in Brazil and China to opening more smaller U.S. stores than larger ones, as it moves to improve results in the face of difficult conditions worldwide.

The world's largest retailer sees a "tough" and "unpredictable" economy around the world, Chief Executive Officer Mike Duke said, a week after the International Monetary Fund trimmed its outlook for global growth.

Here’s an idea: why don’t you start by not allowing EBT users free reign when the system is clearly broken, like what happened over the weekend.

Yes, I’ve read a lot of bloggers who used the EBT system’s breakdown to point out how bad the moochers are.  But they forget that Corporate Wal-Mart ordered that store to honor the transaction even though the legitimacy of it was flimsy at best.

Sometimes these large corporations made incredibly stupid policy decisions.  Sprint once made their retail salespeople recite a whole paragraph touting the greatness of Sprint to every customer interaction.  Starbucks has a “Say Yes” policy to customer complaints, which allows you get free stuff if you lack any sense of morality.

And now we have Wal-Mart approving the use of broken EBT cards and “shocked” when EBT users decided to literally loot the store.  And nobody blames Wal-Mart for a stupid corporate policy.

The sad thing is, none of the corporate executives are in commission-based pay.  Therefore, they have no incentive to ensure that the company does well, other than avoiding stockholders.  I think this reflects why large corporations are doomed to eventually fail without government intervention: they are too big to operate rationally or with much concern for the company they supposedly run.

And Wal-Mart is no exception.  I have no doubt that they will be undone in a few decades much like K-Mart has all but disappeared.

UPDATE: it seems that Wal-Mart is standing by their bad decision:

Walmart has no regrets about allowing a wild shopping spree at two of its Louisiana stores when an electronic glitch lifted the spending caps on the cards of food stamp recipients.

"We know we made the right choice," Walmart spokesman Kory Lundberg told ABCNews.com today.

The chain has no regrets even though Louisiana's Department of Children and Family Services said food stamp recipients should have been limited to $50 each during the emergency and that Walmart will have to pay the difference.

Lundberg declined to comment about how much the company may have lost or why it did not follow the emergency $50 limit.

In other words, they are probably expecting the government to reimburse them for the amount of money the "lost" when they didn't bother to use the $50 limit.