Xerox system failures essentially gave a green light to unlimited spending on food stamp cards at Walmart on Saturday. Store managers at Walmarts in Louisiana called Walmart corporate headquarters on Saturday to report huge throngs of shoppers clearing the shelves as the result of a system outage at Xerox, the company who is contracted to process EBT (electronic benefit transfer of food stamps) transactions for the store, which granted unlimited credit to EBT recipients. It is unclear, even after the chaos died down, who will be responsible for the outrageous overspending. Xerox is arguing that they have documented policies and procedures for benefits processing during the event of a system outage. Walmart executives chose to override those policies to accept the EBT cards for the full value of all purchases. That, to me, leaves Walmart holding the bag. Walmart says the responsibility lies with Xerox, whose fault it was that the system went down in the first place. The outage was a result of a routine test gone wrong. Another bearer of responsibility should be the consumers, whose greedy motives led them to overindulge and live beyond their means for a moment. These customers represent the dictionary definition of dishonesty. Who do you think should be responsible for the overspending? Here's the full article from MSN:
Wal-Mart, Xerox blame each other for food stamps spree
Louisiana food stamp recipients stripped bare the shelves of some Walmart stores when a computer glitch left their debit cards with no limits.
By Kathy Finn of Reuters
Throngs of shoppers flooded Wal-Mart stores in Louisiana on Saturday, buying groceries using electronic benefit cards that contained no credit limits.
NEW ORLEANS — Wal-Mart Stores Inc and Xerox Corp blamed each other on Monday after Louisiana food stamp recipients stripped bare the shelves of some Walmart stores when a computer glitch left their debit cards with no limits.
Managers of Wal-Mart stores in the small, north Louisiana towns of Springhill 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.
Food stamps glitch causes run at Wal-Mart 1 day ago 1:34 Views: 61k 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 Wal-Marts to take advantage.
"Some people had eight or 10 shopping carts full of groceries," Springhill Police Chief Will Lynd 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. Louisiana was one of 17 states affected by the outage.
Kayla Whiting, a spokeswoman at Wal-Mart's Bentonville, Arkansas, headquarters, pointed to Xerox as the source of the problem and referred further questions to Xerox.
Xerox corporate spokesman Bill McKee provided a written company statement saying that Xerox has a "documented process for retailers like Wal-Mart to follow in response to EBT outages."
But the statement left unclear who would cover the unauthorized spending, and it referred further questions to Wal-Mart.
Louisiana officials said they had no intention of being left holding the bag. "The outage was the result of failures by our contractor, Xerox," said Trey Williams, a spokesman for the Louisiana 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 Wal-Mart marked "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 Wal-Mart store 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 Wal-Mart headquarters and was told to accept the cards.
The shoppers "decimated the grocery section of Wal-Mart," 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., Wal-Mart 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 Chief Gary Hobbs 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 Wal-Mart continued.
Related: Wal-Mart turns to 'made in USA'
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My name is Nicholas Emeigh, but everyone calls me Nick, and I prefer it. I'm usually called Nicholas when I'm in trouble. I'm from the Philadelphia area, work in business, and fancy myself as a freelance graphic designer, writer, and artist. I have a passion for art in all its forms including music, but I restrict my singing to the shower and the car for the good of society. If you'd like to know more, just send me an e-mail. I really appreciate you stopping by.