Does home-improvement store Mernards use unfair business practices to stiff small lumber suppliers? According to a reader email they do, or at least did 15 years ago.

Here’s how it worked.

Order 75% of their lumber from a larger supplier.
Order 25% of their lumber from a small supplier.

After lumber gets sorted through and the unsaleable pieces are found, Mernards returns them all to the small supplier.

That’s right, the crappy boards from both suppliers get returned to the little guy. Kornkob writes,

But wait, one might thing, all the supplier has to do is say ‘hey–this board don’t have our markings on it’ and refuse to refund on those pieces. However, Menards, having chosen source that was hungry for their business, knows that they can strong arm this supplier into eating the extra costs regardless, since the account is very valuable to them. When the supplier balked, Menards simply chose a different source to take advantage of.

Rinse wash repeat for all manner of sourced product.

Business is a mean business. Full letter inside…

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Kornkob writes:

“15 years ago a friend of mine was a buyer for Menards (a Midwestern version of Lowes/Home Depot). He eventually quit, mostly out of disgust for the business practices. Essentially, Menards would intentionally screw smaller suppliers because they knew they could get away with it. His most concrete example was lumber.

Menards reaches out to a large lumber supplier and orders approximately 75% of the 2 by 4s they will need. They then look for another supplier who is smaller to offer the other 25% of the business to. They try to pick a company that is small enough that the Menards order is a HUGE increase in their sales for the year, making the Menards account a very lucrative thing for the small supplier. This smaller source generally is charging slightly more than the larger supplier.

Fast forward to after the lumber is delivered.

As customers sort through the lumber and discover the broken, damaged, warped, knotty or otherwise unsaleable/usable boards, Menards collects those boards and initiates the process to return these boards as ‘damaged on delivery’ or otherwise unacceptable. Instead of sorting the boards by supplier, they credit the smaller supplier with all the flawed lumber.

But wait, one might thing, all the supplier has to do is say ‘hey–this board don’t have our markings on it’ and refuse to refund on those pieces. However, Menards, having chosen source that was hungry for their business, knows that they can strong arm this supplier into eating the extra costs regardless, since the account is very valuable to them. When the supplier balked, Menards simply chose a different source to take advantage of.

Rinse wash repeat for all manner of sourced product.

Norris eventually couldn’t continue to screw the little guy and quit.

Admittedly this is 15 years ago and since then Lowes and Home Depot have changed the whole playing field for DIY places. Who knows if this is still the way it is done? On the other hand, maybe that’s the way it is done by the bigger guys….only on a global scale. I dunno.”

— BEN POPKEN

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