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California Attorney General Jerry Brown - a former California Governor, CA Secretary of State, Mayor of Oakland, and President of the Patrick Stewart fan club - announced a settlement with Wal-Mart today in which the retailer was fined $1.4 million and ordered to implement a “get it free” program for California consumers. This after an investigation found that the store overcharged for numerous items at checkout.

Actually, the investigation and settlement announcement was a joint venture with San Diego County District Attorney Bonnie Dumanis, who has a much shorter but waaaaayyyyy more interesting Wikipedia entry than AG Brown. In fact, Dumanis, a Republican, is the first openly gay or lesbian District Attorney in the county, and the first Jewish woman to hold the post. Fancy that.

Anyway, back to the story we’re here to tell. Apparently, Investigators conducting random price-checking across the state found that 164 Wal-Mart Stores in 30 counties had made scanning errors. On average, customers who were overcharged paid an extra $8.40 at checkout.

Christine Gasparac, a spokeswoman for Brown, said state investigators concluded that “these were systemic problems,” not just run-of-the-mill mistakes.

“Systemic problems” might sounds bad to some, but one person’s systemic problems are another person’s financial opportunity. As the LA Times blog puts it - if Wal-Mart’s price scanners are wrong, you can make a quick $3. So the moral to this story - and every blog post I write today will have a moral - is to shop at Wal-Mart, cross your fingers that their registers go insane, and then collect a cool handful of George Washingtons.

Wal-Mart now promises to give back $3 to customers any time a pricing mistake is discovered. If the mispriced item sells for less than $3, you get it free. The refund program begins immediately and will last for four years, but it’s up to shoppers to spot any disparity between what a product is listed for on the shelf and what’s rung up by the price scanner.

The company was also ordered to pay $1.2 million in penalties; $190,621 to reimburse costs to numerous state agencies and prosecutors’ offices; and $50,000 to a consumer-protection prosecution trust fund.

Wal-Mart to pay $3 if price-scanning errors occur [Sacramento Bee]

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According to The Christian Science Monitor: “In Britain, carbon footprinting – used initially to broadly measure environmental impact across a company’s entire operations – is morphing into an eco-labeling tool.” This after a British group reported that 80% of a product’s carbon footprint is laid before the consumer actually drives out and buys or uses it.

Unfortunately, carbon-labeling appears to be a tool Wal-Mart believes the American consumer isn’t ready for.

As for carbon-labeling, Wal-Mart’s senior vice president of sustainability, Matt Kistler, says that he doubted existing methodologies and the Wal-Mart customer’s ability to relate carbon with consumer merchandise. “I’m not sure the consumer will ever make a purchase based on the carbon footprint,” he says, “especially the mass consumer.”

Possible. But I think Mr. Kistler underestimates the public’s knowledge on the issue. Sure, many consumers may not know what exactly a carbon-footprint is, but the majority have probably at least heard the term and know it relates in some way to the environment. Carbon-labeling may not affect the buying habits of the majority, yet even if a small percentage of Wal-Mart shoppers were to see the labels and be moved to research the issue further, that can’t be a bad thing, right?

Those making efforts to examine their carbon footprints often do so without transparency – essential to generating both customer support and supply-chain innovation.

At Wal-Mart, consumer transparency is largely tied in to its corporate press releases, a growing assortment of eco-labeled products, and in-store awareness campaigns. A more robust effort is the company’s “Love, Earth” jewelry, which enables customers to use the Internet to map where the jewelry’s gold and silver were mined and manufactured, including information on how the mines manage cyanide and waste dumps.

Are you ready to go on a carbon diet? [The Christian Science Monitor]

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On October 6, CBS19 in Charlottesville, Virginia, told us how a diabetic woman in Barboursville ended in the hospital after an insulin overdose.  Her insulin level was stabilized, but having lived safely with diabetes for 20 years, she wondered how she overdosed.  The culprit?  Several mislabeled “Reli-On” syringes, purchased from Wal-Mart, had made their way into her box of syringes.  They delivered a near-deadly overdose dose.  When she contacted Wal-Mart, they offered her a replacement box and according to CBS19, Wal-Mart and Reli-On (owned by Covidien Ltd.), both said: “ they were looking into the matter but have not recalled the item.”

Today, a full month later, Covidien finally announced a voluntary recall of over 450,000 mislabeled syringes that were sold exclusively at Wal-Mart and Sam’s Club stores. The Food and Drug Administration said that the syringes have the potential to deliver 2.5 times the normal dosage, in a story from the Associated Press - an amount of insulin that can cause hypoglycemia or even death. The syringes effected were labeled: ReliOn 1cc, 31-gauge, 100 units for use with U-100 insulin.  The FDA said there was only one reported incident and that the syringes were sold from August 1 through October 8. 

According to Reuters, Wal-Mart, in a good-faith effort, actually sent out 16,500 letters of warning to consumers that likely resembled this one, that Reli-On posted on their website. Hopefully such action won’t be necessary in the future, if more oversight is used when buying medical supply and quicker recall action is taken when and if an accident occurs . 

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Check out this week’s issue of the Wal-Mart Watch Weekly Update for Elected Officials – a compilation of Wal-Mart news from across the country and beyond.

This week’s issue begins on Wal-Mart and the economy, and whether Wal-Mart sales statistics can be used as a new barometer for the U.S. economy. You’ll also find stories on changes in shopper behavior, now that consumers are faced with less disposable income. And, you’ll find stories on Wal-Mart’s slowed growth, and the switch to smaller store formats by retailers across the country.

In addition to the economy, you’ll find stories related to next week’s election. Barack Obama highlighted the story of a 72-year-old man forced to go back to work for Wal-Mart in his half-hour special this past Wednesday night. Meanwhile, according to Reuters Wal-Mart vows to remain non-partisan in the 2008 election season, while the Financial Times reports on the candidates attempting to woo the so-called “Wal-Mart Moms.” Plus, there are suspicions that Wal-Mart is behind a new grassroots group recently set up to fight the Employee Free Choice Act, as reported in The National Journal.

Also: Find out whether a Wal-Mart case in Montana could lead to changes in that state’s campaign finance law.

And finally, check out our “Stateside” and “Wal-Mart International” sections to find out what’s going on with Wal-Mart around the country and across the globe. A California ballot measure could lead to increased demand for more humane animal products, while citizens in Virginia continue to fight Wal-Mart’s attempt to build near an historic Civil War battlefield.

Wal-Mart Watch Weekly Update for Elected Officials [October 31, 2008]

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The biggest oil company in the world and the biggest retailer in the world are loving life as the economy sinks.

Wal-Mart stock has risen 20% since the start of the fiscal year. Exxon Mobile just posted the largest quarterly earnings in American history- to the tune of 14.83 billion dollars.  The recession has done wonders for both companies; the volatile price of oil, puts Exxon Mobile in the position to capitalize on futures from supply-wary market analysts, while Wal-Mart continues to post double-digit profits because of the high number of price-conscious consumers who are forced to trade down - even if it’s against their will.

Many more-upscale retailers, such as Target, are not doing quite as well during the recession.  BusinessWeek reports that looking at the most recent quarter over the past year, Wal-Mart’s same store sales are up 5% while Target’s are down 0.4% and K-Mart’s are down 5.6%.

But these days are numbered. Wal-Mart knows that the recession won’t last forever. This week, they unveiled plans to focus more on renovating existing stores next year than opening new stores. Wal-Mart realizes that when the economy turns up again, many of its new customers will want to shop elsewhere - and they’re trying to stop it. The question is: will it work?

Wal-Mart Wins Big During Downturn [BusinessWeek]

These are heady times for Wal-Mart (WMT). The Bentonville (Ark.) retailer has been enjoying double-digit profit growth and strong sales as bargain hunters crowd its aisles. Its stock is up about 20% since the start of the year. And shoppers like Sal Garcia of Downey, Calif., are joining the growing ranks of loyal customers. “Look,” says Garcia, 52, putting the last of 10 shopping bags into the trunk of his Lexus, “all that for $54!”

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George Gombossy and the Hartford Courant continue to follow this issue, which has taken a turn in favor of the consumer. Numerous complaints made to the Courant caused both Governor Rell and Attorney General Blumenthal to take notice. The complaints were from consumers charging that major retailers have been violating state law by charging a second sales tax when merchandise paid for with cash is exchanged. Governor Rell ordered the state revenue department investigate the practice, and now AG Blumenthal has sent a letter to Wal-Mart telling the company’s general counsel in an oh-so-kindly way to please knock it off with the double taxation.

“Wal-Mart should refund any consumer who was denied a refund of sales tax on returned goods or charged a sales tax on even exchanges,” Blumenthal wrote to Sam Reeves, Wal-Mart’s division general counsel.

My favorite part of this story so far though has come from our good friend, Wal-Mart spokesman Dan Fogelman, who defended Wal-Mart’s policy.

Spokesman Dan Fogleman said Monday evening that although he has no idea what Connecticut sales tax law is, his company is following it.

That’s right - despite his cluelessness to the law and the company’s refusal to discuss why the accusations of so many customers are wrong, Fogelman can guarantee Wal-Mart is following state tax law to the tee. I love blanket statements with nothing to back them up.

Blumenthal Targets Wal-Mart on Sales Tax [Hartford Courant]

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The Hartford Courant has been following this story, and apparently the complaints against Wal-Mart have been increasing. Consumers have increasingly suggested that Wal-Mart has to be violating some state law by requiring them to pay tax again on exchanges made without receipts. Actually, according to the Connecticut Revenue Department, additional sales tax cannot be charged if a store has an even exchange policy. In his blog, the Courant’s George Gombossy came to the following determination:

My conclusion is that not only is Wal-Mart violating state laws by charging tax again without receipts, but is letting its employees falsely blame the state.

Gombossy points out that on its website, Wal-Mart says: “You can replace, exchange, or get credit for an item immediately in a store, pending product availability.”

The issue is now with the state’s Consumer Protection Department.

Consumer Protection reviewing Wal-Mart’s double tax policy [Hartford Courant]

Despite complaints from customers of its stores throughout Connecticut, Wal-Mart insists that it’s following state tax laws by requiring them to pay tax again on exchanges made without receipts.

My conclusion is that not only is Wal-Mart violating state laws by charging tax again without receipts, but is letting its employees falsely blame the state. But you be the judge.

The law seems clear:

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Connecticut Governor M. Jodi Rell is ordering the state revenue department to revue possible tax law violations by major retail chains within the state.

According to the Hartford Courant:

Gov. M. Jodi Rell appears to doubt the state revenue services department’s assertion that it is “on top of” complaints from consumers that major retailers in Connecticut are violating state laws by charging a second sales tax when merchandise paid for with cash is exchanged.

This practice has apparently been the subject of many complaints in the Constitution State, where sales tax cannot be charged on an exchange item if a retailer has a policy of permitting exchanges on identical items purchased with cash and without a receipt.

The Courant’s “CT Watchdog” column has been stirring the issue up for a few weeks now - dozens of people have written in to the paper to share their story of double taxation. There seems to be a couple of things going on here. The first question is whether retailers are acting illegally by charging sales tax on identical exchanges where sales tax was paid at the initial point of purchase - this becomes a bigger deal the more expensive the item being exchanged becomes. The second question is where the additional sales tax has been going...has the state revenue department been quick to address complaints related to this practice?

The Governor’s office apparently thinks it has not, so we’ll just have to keep watching to see if penalties end up being levied.

Gov. Rell to order tax department to look into state tax law violations [Hartford Courant]

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An article in today’s Wall Street Journal reports Wal-Mart recently conducted a survey to “test the voting preferences of men and women who are shopping at its stores.” Wal-Mart asked shoppers which candidate they’ll most likely vote for in November, and which issues facing the U.S. today are most important. The move not only gives politicians a look at a sought-after demographic - “Wal-Mart Moms” - it also places Wal-Mart at the heart of American politics.

Not surprisingly, the economy takes center stage for many of Wal-Mart’s shoppers. Like so many people living in the U.S. right now, Wal-Mart’s customers are trying harder than ever to make ends meet. And as the economy gets worse, many people are “trading down” to shop at Wal-Mart, even if they disagree with the retailer’s business practices.

Low wages, poor health care, and job losses are a major part of this picture. Despite Wal-Mart’s recurring suggestions that its low prices are a solution to our economic crisis, the retailer is actually a big part of the problem. By paying its workers so little and failing to provide health coverage for many of its workers, Wal-Mart is making it even harder for many families to stay afloat.

Congress is searching for answers to the economic problems we now face - whether they be emergency bailout measures or more long-term solutions like passing the Employee Free Choice Act. In the mean time, if Wal-Mart really wanted to help its shoppers with the issue they care about most, the company would start improving conditions for the lowest-earning members of its work force. That’s something Wal-Mart Moms on both sides of the political spectrum could support.

‘Wal-Mart Women’ Vote Remains in Play [Wall Street Journal]

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Wal-Mart stockpiles massive amounts of information about its customers. The retailer’s databases are enormous - bigger than the internet - and the information contained on its servers includes everything from which aisles shoppers choose to go down to the time of day chocolate milk sells quickest.

Now, the statistics firm ACNeilson (best known for its TV viewership ratings) is taking Wal-Mart’s data and helping the retailer understand its shoppers even better. At a recent conference of Wal-Mart suppliers, Neilson reps broke down how many cartons of eggs, car parts, and bags of dog food Wal-Mart customers buy each year. The study also revealed the average household incomes of Wal-Mart’s shoppers, the average number of trips each shopper makes and how much shoppers spent at the stores, on average. Ultimately, Wal-Mart hopes to use this information to customize store inventories and increase profits.

The study comes at a time when political analysts everywhere are desperately trying to understand Wal-Mart’s core demographic. “Wal-Mart Moms” may be the key to November’s election, some pundits say. Political alignment might not have been on Neilson’s questionnaire, but the study does provide some insight. According to Neilson, the average Wal-Mart shopper is a “pet-loving, pasta-eating, car-driving, gadget-obsessed dieter who either doesn’t care for cheese or buys it elsewhere.” (That part about the cheese may or may not impact the election directly.)

The data in the study doesn’t provide a complete picture of Wal-Mart’s shoppers - and it certainly doesn’t encompass all of the middle-aged women being wooed by politicians - but Wal-Mart is trying harder than ever to win over “the core female head of household” i.e., the “Wal-Mart Mom.” The retailer isn’t alone in catering to this powerful group not alone, and who knows - maybe quality dog food actually is the secret to winning the presidency in November.

Marketing firm looks at Wal-Mart shopper, trends [NW Arkansas Morning News]

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Several stories are out today warning consumers about dangerous dog food and soccer goals that are available at Wal-Mart and other retailers. 

But the biggest story here is the ‘voluntary recall’ of 600,000 more ‘Simplicity’ bassinets available at Wal-Mart and other retailers, in a story from Wall Street Journal.  This, barely three weeks after the U.S. Consumer Product Safety Commission (CPSC) issued a recall of 900,000 similar bassinets that Wal-Mart took its sweet time removing from their website.

The CPSC, in cooperation with the retailers affected by this week’s recall - including Wal-Mart - issued this statement.  I wonder why then, Wal-Mart appears to still be selling several of the models (Camille and Providence) listed as dangerous by the CPSC (and Wal-Mart themselves!) on its website?

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Remember back in June, when the FDA warned consumers about eating certain kinds of tomatoes coming out of Mexico due to potential salmonella contamination? And then expanded that warning to include certain peppers as well?  All vendors of these products, including Wal-Mart were to halt the sale of such items.

Cheryl Grubbs is filing suit against Wal-Mart Stores, Inc, alleging that her husband, Brian Grubbs came close to death after eating several jalapeno peppers that were purchased at a Wal-Mart and tainted with salmonella in an article published today in LawyersandSettlements.com.

[An earlier version of this blog post mentioned that the FDA recall in question occured on June 25, 2008. This was incorrect: we apologize for the mistake.]

Tomato-Pepper Salmonella: Why the Grubbs are Suing Wal-Mart

Dolores, CO: “Truckloads of contaminated jalapenos were turned back at the border before we bought them at Wal-Mart,” says Cheryl Grubbs, “so why did Wal-Mart still have them in their store?” Her husband, Brian Grubbs, almost died from the tomato/pepper salmonella outbreak, and Cheryl is furious because his illness could have been avoided.

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Several stories were published this week regarding Wal-Mart’s newest way to annoy the already frazzled American shopper - the “Smart-Network.” Set to launch in close to 300 stores by the holiday season and chain-wide by 2010, the in-store TV marketing network will include 27,000 screens and feature everything from time-specific advertisements to a series of ‘welcome screens’ to be displayed at store entrances. Stephen Quinn, chief marketing officer of Wal-Mart stores, discussed the new system in a story from Adweek:

“We’ve built a network tailored to the way consumers shop our stores, delivering helpful, custom content closest to the point of decision that helps them shop smarter”

“Smarter” is right: now customers won’t have to make shopping lists, decisions about what products are for them, or even have to open their eyes upon entering a Wal-Mart. All they have to do is listen for the comforting sound of a television screen beckoning them closer and closer to whatever Wal-Mart feels like selling them at that time. The company sank $10 million into R&D for this project, coming off slightly better-than-expected sales numbers for the month of August, and seems to show the company’s faith in the system.

Wal-Mart Smart Net Pushes Point-of-Sale Ads

Trying to reach additional shoppers, Wal-Mart has launched the Wal-Mart Smart Network, which supplies information via in-store TV. The company invested $10 million in the project billed as “shopper-intelligent network at retail.” Powered by Internet Protocol Television, the new net will appear in more than 2,700 stores nationwide.

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The British Department for Environment, Food and Rural Affairs (DEFRA) is considering imposing a mandatory tax on plastic bags used at grocery stores.  Asda, owned by Wal-Mart, has recently opposed this initiative, arguing that it would disproportionately affect its low-income shoppers.

Asda, instead, argues that a better way to curb consumer behavior on this issue is by encouraging the re-use of bags.  Asda’s insinuation – the few cents that added for each grocery bag will do little to change the habits of consumers – is particularly fallacious (and ironic), especially considering that this is a company has engaging in habitual price wars with rival Tesco (not to mention the fact that its parent company is the epitome of the high volume, low return business model).

As “evidence” of the detrimental effects of this sort of tax, Asda looks to Ireland, where a similar tax caused consumption of plastic bags to decrease initially, though it later increased.  But this case-study referenced lends no legitimacy to Asda’s allegations, since it provides no causative relationship between the increased usage of bags and the tax.

Asda also states that this distracts from the more pressing issues of food-waste, but even British Prime Minister Gordon Brown has argued that Asda (as well as other grocers) have had a direct hand in over-consumption because of their price wars.  Were Asda truly concerned with waste, it would not repeatedly launch “buy-one-get-one-free” promotions in an effort to oust its competitors.

The introduction of a universal bag-tax (as opposed to an Asda-exclusive one) has the potential to do more than pay lip-service to the ideals of sustainability.  Unless there is a tangible effect on their pocketbooks, consumers often have little incentive to curb their consumption.  When customers must consider their bag-usage monetarily rather than in the abstract (whether that is five cents or twenty-five cents), they become conscientious of the wastefulness of one bag per candy bar.  Each bag makes a difference, especially when a measure such as this one would be applied to an entire industry and would cause a systematic reduction on waste.  If Asda were truly committed to sustainability, it would applaud DEFRA for this proposal and not stand as an impediment to progress.

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Well, first it was the tomato that was the culprit. Then tomatoes were deemed clean, and safe to eat again. Then, in a twist of culinary fate, a new villain in the salmonella outbreak showed its face - a spicy little number possibly originating at a farm down in Mexico. The jalepeno pepper. And now the tiny pepper has turned its capsaicin-spewing fury on Wal-Mart.

Actually, the complaint at issue was filed on behalf of Delores, Colorado resident Brian Grubbs against Wal-Mart and an unknown supplier, referred to in the complaint as “John Doe”. According to the lawsuit, the Grubbs family purchased jalapeño peppers from the Wal-Mart Supercenter in Cortez, Colorado in late June. Grubbs and his family proceeded to eat them over the next week. According to the Rocky Mountain News:

Samples showed he was positive for salmonella Saintpaul, and later the jalapeño peppers back at his house that he hadn’t yet eaten also tested positive for that strain of salmonella, the suit said.

“Consumers believe that retailers like Wal-Mart know the quality and safety of products they sell,” Marler said. “Retailers benefit from that trust, and must be held accountable for the products they sell.”

Salmonella is, of course, no fun at all - Salmonellosis illnesses from the Saintpaul strain began showing up in Texas and New Mexico in late April, and in early June the CDC linked those illnesses to raw tomatoes and issued consumer warnings. Those warnings were, of course, completely wrong - the list of possible culprits was first widened before eventually being narrowed to raw jalapeno and serrano peppers.

On July 30, the FDA confirmed the presence of salmonella Saintpaul at a farm in Mexico, both in irrigation water and on produce. The investigation is continuing.

Man sickened by jalapeños files first salmonella lawsuit [Rocky Mountain News]

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Conscientious consumers everywhere know it’s hard to sort through all the conflicting messages about where to shop. Multiple factors go in to making a company socially responsible - fair labor standards, ethical sourcing, environmental care, community impact and transparent corporate practices - and it can be hard to take them all into consideration simultaneously.

Co-op America’s newly expanded Responsible Shopper website is designed to cut through that confusion. The site lists news stories, special reports and academic studies about companies’ business practices in hopes of helping shoppers make informed shopping decisions. The site’s profile of Wal-Mart notes several outstanding labor and human rights violations that no responsible shopper would support, and offers low-price alternatives to big box retailers.

Co-op America’s Responsible Shopper >>

Web Site Dishes Up Dirt, Exposes ‘Greenwashing’ [Consumer Affairs]

Worried that your consumer dollars are rewarding bad corporations with problem practices? Concerned about greenwashing? Wish there was an easy way to get the dirt on America’s biggest companies before you buy something? Looking for a way to pressure consumer companies you patronize to get responsible and clean up their acts?

A new Web site, ResponsibleShopper.org, promises to do all that, and then some.

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