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Walmart files show wrong prices charged at 1,600 stores for days

Walmart files show wrong prices charged at 1,600 stores for days

(Bloomberg) — One evening in March — at 8:41 p.m. Chicago time to be exact — internal warnings flashed within Walmart Inc. about a curious thing happening at hundreds of its stores across the US.

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Shoppers scanning certain items at self-checkout stands were seeing the wrong prices. Some prices were lower than listed. Others were higher.

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Unbeknownst to those buying food, clothes, appliances and everything in between on March 19, Walmart had suffered an internal system failure that stopped price data from flowing to the self-checkout stands, according to documents seen by Bloomberg News. In total, the documents show, 1,600 stores were affected, resulting in widespread mispricing that has never before been reported.

Two days after the incident began, technology staff at America’s largest retailer were still trying to fix the issue, according to the documents.

Miami, Hialeah Gardens, Florida, Walmart Supercenter, Self service checkout customer scanning and paying. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images)
Self service checkout customer scanning and paying at Miami, Hialeah Gardens, Florida, Walmart Supercenter, (Jeffrey Greenberg/Universal Images Group via Getty Images) (Jeff Greenberg via Getty Images)

Walmart acknowledged that a breakdown resulted in the company overcharging customers. But it declined to provide key details, including how many people paid too much or too little, how much in total customers were overcharged, which items were mispriced, or how long the problem persisted.

The technical issue was eventually resolved and more than 80% of overcharged customers were reimbursed, Walmart spokesperson Mischa Dunton said in an emailed statement.

Despite Walmart’s efforts to make customers whole, the pricing snafu likely still runs afoul of state and federal consumer protection laws, according to legal experts.

And it wasn’t the only technological problem that has disrupted Walmart’s operations in recent months: The company also suffered cash register and website outages in February and problems that affected photo and vision prescription orders in March. While the cash register incident has been reported on previously, the documents seen by Bloomberg give the fullest picture yet of the range of technical glitches that have recently hit Walmart, a company that prides itself in being at the forefront of cutting-edge retail technologies that put customers first.

Dunton described these as “disparate events” and “anomalies.” She said that it’s “impossible for any company to innovate and introduce new technologies into their system without assuming some level of risk of potential disruption.”

The issues surfaced as Walmart was enjoying a surge in sales within its grocery and e-commerce divisions, both of which the company has hailed as critical growth areas as it competes with Amazon.com Inc.

“Because Walmart is such a large retailer, even a small mistake like this can cause millions and millions of dollars of illegal overcharges."Christopher Peterson, former attorney with the US CFPB

The pricing problems were caused by some product information failing to update in the system that powers self-checkouts in “select stores across the country,” Dunton said. She declined to provide details on what caused the failure itself. But she said Walmart’s traditional checkouts and online store weren’t affected.

If the overcharges are verified, Christopher Peterson, a former attorney with the US Consumer Financial Protection Bureau, said, they would be “clearly illegal under the consumer protection laws of just about every state and the federal government.”

“Because Walmart is such a large retailer, even a small mistake like this can cause millions and millions of dollars of illegal overcharges,” said Peterson, who is now a University of Utah law professor. The company could be exposed to legal or regulatory action despite reimbursing customers, he said.

State and federal authorities are likely to weigh two factors in deciding whether to take action, said Bill Kovacic, a professor at George Washington University Law School and former chairman of the Federal Trade Commission. They’ll want to see Walmart making a “complete, good-faith effort” to reimburse overcharged customers, including by notifying them of the issue, he said. And they’ll expect a “rigorous examination” of the cause of the problem, along with assurances that it won’t happen again.

Walmart didn’t answer questions about the total or average amount in dollars that customers overpaid. Dunton said that, on average, the “potential overcharge” was 1.88% of the “total basket size of the customers who used self-checkout in an affected store.” When asked, she didn’t explain how Walmart calculated those figures.

“Our business is strong, our infrastructure is industry-leading, and we work hard to maintain the trust of the millions of people around the world who rely on us every day,” Dunton said. The company didn’t take any action on the undercharges, she said.

Three weeks before the pricing problems, a separate issue rendered cash registers inoperable at Walmart and Sam’s Club stores across the US after 4,000 network switches “reloaded” or went down, the documents seen by Bloomberg show. Network switches connect computers and help send data back and forth.

Walmart said the downed registers were “swiftly addressed” and caused by “an issue with some of our point-of-sale systems.” There is no indication that these outages affected pricing. The Wall Street Journal previously reported on the register issues at Walmart stores.

Even as Walmart staff were working to fix the registers, the records show, another alert went off within the company: A “multimarket issue” left some customers unable to access the company’s website. Walmart acknowledged that customers outside the US may have had “intermittent” problems accessing the site for more than an hour.

In March, Walmart’s system for photo orders and vision prescriptions were separately disrupted for about an hour, according to the records. This caused delays in processing photographs and left some customers unable to order prescription glasses or contacts. According to the records, the issue involving vision prescriptions had “minimal impact.”

Walmart declined to comment on the disruptions to photo orders and vision prescriptions.

The March mispricing came two months after a federal judge in Florida granted preliminary approval for Walmart to settle a 2022 class-action lawsuit that accused it of overcharging people for bags of citrus fruit and some groceries sold by weight. In court documents, Walmart denied the allegations and said it was agreeing to a $45 million settlement to avoid the cost of further litigation.

In recent years, Target Corp. and Dollar General Corp. have both paid settlements to resolve separate legal actions brought by government officials who accused the retailers of overcharging customers.

In March, Business Insider reported that Walmart’s internal systems had more than a dozen “major incidents” in the last two months. The article didn’t detail the incidents but described them as the type that interfere with business operations and impact revenue.

The term “major incident” is used internally “to ensure the highest attention to issues so they don’t translate into customer or associate pain points,” according to Walmart.

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