Walmart Fined $89,705 For Overcharging Wisconsin Customers

Walmart received an $89,705 fine after the Wisconsin Department of Agriculture, Trade and Consumer Protection found 280 weights and measures violations at nine Walmart stores. The gargantuan retailer failed to subtract the weight of packaging materials, or “tare weight,” when pricing bulk items like coffee, broccoli, and sweet potatoes.

Judy Cardin, section chief for weights and measures with the state, said that in the case of bulk coffee, the weight of the packaging materials was included when the price of the product was determined. The state had tested one-pound bags of Cameron brand coffee beans, which were found to be 3/100ths of a pound over the actual bagged content.

While that doesn’t seem like much, it translated to an overcharge of 21 cents per pound, Cardin said.

“This is something that’s difficult for the consumer to know it’s even going on,” she said. “How would someone know they were being overcharged? This is why weights and measures checks products to make sure consumers are getting what they paid for.”

Cardin said Wal-Mart was fined $25,000 in January 2006 for overcharging for bulk coffee.

Walmart has directed “all of its Wisconsin stores” to follow the law and stop screwing customers. Notice how they don’t mention whether a similar edict was issued to stores in states with similar laws. So much for everyday low prices.

Wal-Mart hit with $89,705 state fine [Manitowoc Herald Times Reporter]
(AP Photo/April L. Brown)

Comments

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  1. Bay State Darren says:

    Wow, that’s like fining one of us $.00001 They’ve taken in enough money to pay that since I began typing this sentence.

  2. chuloallen says:

    @Bay State Darren: times that by a the few million tons of goods they sell per week times the few million people they sell it to.. PER WEEK … just cause its a small amount doesnt mean it doesnt add up..

    Havent u ever watched “Office Space” ?

  3. louisb3 says:

    @chuloallen: Bay State Darren wrote that the big sum of $90,000 is nothing to a magacorp like Walmart, not that the countless tiny overcharges were nothing to the consumer.

  4. BigNutty says:

    I have many issues with WalMart but I doubt that an employee tried to scam anyone. Just a mistake which was found by the department of weights and measures.

    The employee would have nothing to gain by purposely figuring the price wrong as he does not make a percentage of the profits.

  5. Bay State Darren says:

    @louisb3: Thankx for clearing that up. Apparently, I’m all about the pronouns when I post on this site because I always seem to post these follow-up clarifications. Gotta work on that.

    @chuloallen: How dare you insinuate that I’ve never watched Office Space! That’s just not humanly possible if you’ve been under 35 or so at any point since the late ’90s!

  6. edrebber says:

    At a 21 cent per lb over charge walmart had to sell 428,571 lbs to cover the $90,000.

  7. ShadowFalls says:

    @edrebber:

    That isn’t too unlikely if it is a widespread issue. They were just caught in nine of their Wisconsin stores, hard to say how much this goes on in other states.

  8. swalve says:

    @Bay State Darren: No, it’s like fineing us $90,000. Their money is worth just as much as ours is.

  9. Christovir says:

    @swalve I doubt most people would agree with you. A fine of $90,000 is very different if your income is measured in billions of dollars per year, or in $30,000 per year.

  10. GearheadGeek says:

    It actually might be enough to get the attention of the managers of those 9 stores if Wal-Mart accounts for it properly. If they weren’t following Wal-Mart policy, the amount of the fine will come right off the top of the store’s profit, affecting the manager’s bonus. If the store was just barely making the numbers planned by corporate, it might be quite expensive for the manager in fact. Now, if they were following Wal-Mart policy by charging for the packaging as well as the product, it wouldn’t be fair to ding the individual stores (but of course that doesn’t mean corporate wouldn’t do it.)

  11. kpfeif says:

    gearheadgeek – Wal-Mart holds their management that accountable? Wow. It still can’t be as bad as John Menard…the guy will personally fine a manager if their “secret shoppers” stop by and see carts in the lot. Every cart has a dollar amount attached.

  12. JAYEONE says:

    …and that’s strike 78,315 against WalMart…

  13. Buran says:

    @Bay State Darren: I’ve seen it. I just happen to think it’s a really crappy movie. I can see why some people like it but I thought it was rather thin.

  14. XTC46 says:

    @kpfeif: all major retails hold their store managers that accountable. Corporate is all about the bottom line, and 90k doesn’t just get swept under the rug. I have seen store managers get fired for having too much theft after taking inventory. When a store is fined, its pure profit getting sucked up. Mangers get their bonuses for hitting profit margin goals and 90k less than a target is a large amount to make up.

  15. swalve says:

    @Christovir: So people should be punished differently depending on their income?

  16. Archipod says:

    @SWALVE:

    In terms of fines it seems like a very logical way to go about things. Fining walmart $90,000 = nothing. If they happened to find out one employee purposely did this and fined them $90,000 = big problem for them.

  17. milw123 says:

    Well, it looks like Wal-Mart will recover that fine real quick. [www.jsonline.com]

  18. catskyfire says:

    I can’t speak for Wisconsin. However, there could be a lot bigger cost than just the fine. I was chatting with someone with a smaller store in Nebraska, and talking about weights and measures (based on the sticker the scale had). If a pre-measured product came up short, they were required to discard all of it. You could go over (that is. 1.1 pounds for the price of a pound), but not under. And if the scales used for pricing and measuring were off, it could get expensive to fix.

    It sounds silly. “Oh, they were getting a whole extra 5 cents…” until you start multiplying it. especially since you aren’t supposed to be charged unfairly. It’s one thing for a place to charge too much and, as a consumer, to agree to pay that much. (See, oh, being willing to spend $4.00 on fancy coffee.) It’s another for it to charge too much when the consumer isn’t aware.

  19. Christovir says:

    @swalve Sometimes, yes. The real issue is should a multi-billion dollar corporation — a company so large it’s budget is larger than many nations’ budget — be served with fines at the same scale as a single individual. If the purpose of a fine is punitive to prevent future violations, then the absolute value must be proportional to the target’s resources, else it will not serve its purpose.

  20. JustAGuy2 says:

    @Christovir:

    There is some precedent for this – Finland (I believe, might be Denmark) scales traffic fines to income, so one guy got a $1MM speeding ticket, or something along those lines. Idea is, evening out the pain.

    Problem with that theory is, the better your life is, the bigger a step down prison would be, so, logically, Bill Gates should get a shorter prison sentence for, say, murder, than a homeless guy living under a bridge, since prison might actually be a step _up_ in the homeless guy’s lifestyle, while being forced to stay at the Kansas City Marriott would be a huge step down for Gates.

  21. Christovir says:

    What we are really touching on here is Prospect Theory, which totally kicks the ass of traditional neoclassical economics. See [en.wikipedia.org]

    Basically, where you are headed (your prospects) are a lot more important than the absolute value of your present state, and the proportional size of your prospects matter a lot more than their absolute size.

  22. dantsea says:

    The final cost is anything but ninety thousand dollars.

    I’m assuming many of you have never worked for large corporations. While $90K is a small drop in a large bucket for a company like Wal-Mart, it’s still a loss that has to be accounted for. Blame must be assigned. Someone is going to get fired or demoted and whatever department held responsible will find that money plus legal and administrative fees taken from their budget.

    Meanwhile, they’re doing a frantic calibration of their equipment in other locations in and out of Wisconsin, praying that they’re a step ahead of the Weights & Measures departments there, where regulators are reading the story and wondering how compliant their local Wal-Marts are. Sometimes they’ll act in time, sometimes they won’t.

    Propery calibrated scales (repaired or new) do not come cheap. Additional fines don’t come cheap. Employees or contractors with the knowledge in scale regulations (and therefore fine avoidance) certainly do not come at bargain prices.

    So that $90,000 fine? Rest well, my fellow cynical commenters, because right now it’s costing Wal-Mart millions to remedy.

  23. DallasDMD says:

    @DanB: Wal Mart wouldn’t have to be spending any extra money at all if they kept their scales working as they should be. Its not as if these laws are oppressive; they’re designed to protect customers and keep the retailers honest.

  24. dantsea says:

    @DallasDMD: The sky is blue when there are no clouds. One should always drive within the speed limit. Are we done stating the obvious now?

    My comment addressed the people who said that 90K isn’t enough. I’m telling them to be satisfied that it’s more than that, and why. That’s all.

  25. mythago says:

    The fine could be either absolute ($X per violation) or punitive (scaled to the wrongdoer’s income), but I’m betting it’s the former. In lawsuits, you can present evidence of the wrongdoer’s income to help a jury decide how much punitive damage should be, but regulatory agencies don’t generally work that way.