Walmart: Food stamps spree caused by Xerox
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| NEW ORLEANS
Wal-Mart聽Stores Inc and Xerox Corp blamed each other on Monday after聽Louisiana聽food stamp recipients stripped bare the shelves of some聽Walmart聽stores when a computer glitch left their debit cards with no limits.
Managers of聽Walmart聽stores in the small,聽north Louisiana聽towns of聽Springhill聽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,"聽Springhill Police聽Chief聽Will Lynd聽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.聽Louisiana聽was one of 17 states affected by the outage.
Kayla Whiting, a spokeswoman at聽Wal-Mart's Bentonville,聽Arkansas, headquarters, pointed to Xerox as the source of the problem and referred further questions to Xerox.
Xerox corporate spokesman聽Bill McKee聽provided a written company statement saying that Xerox has a "documented process for retailers like聽Wal-Mart聽to follow in response to EBT outages."
But the statement left unclear who would cover the unauthorized spending, and it referred further questions to聽Walmart.
Louisiana聽officials said they had no intention of being left holding the bag. "The outage was the result of failures by our contractor, Xerox," said聽Trey Williams, a spokesman for the聽Louisiana聽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聽Wal-Martmarked "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聽Walmart聽store聽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聽Wal-Mart聽headquarters and was told to accept the cards.
The shoppers "decimated the grocery section of聽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.,聽Walmart聽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聽Chief聽Gary Hobbs聽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聽Walmart聽continued.