Walmart Whistle-Blower Claims Cheating in Race with Amazon | Hacker News Reader

Walmart Whistle-Blower Claims Cheating in Race with Amazon

bloomberg.com

181 pointskyleblarson127 comments

> Huynh claims Walmart ... failed to process customer returns

I've had this exact experience. A car seat I returned was "lost" when I shipped it back. It took me 6 months to get a refund, and it was only because I pinged an exec there and he facilitated the refund.

Front line phone customer support was useless in a Kafka-esque manner. I didn't think it was nefarious, but as much as I want competition for Amazon, the thought of buying from Walmart makes me feel like it's going to be a painful ordeal.

What do you mean by “Kafka-esque” in this context?

Probably this:

"The term "Kafkaesque" is used to describe concepts and situations reminiscent of his work, particularly Der Process (The Trial) and "Die Verwandlung" (The Metamorphosis). Examples include instances in which bureaucracies overpower people, often in a surreal, nightmarish milieu which evokes feelings of senselessness, disorientation, and helplessness."

https://en.wikipedia.org/wiki/Franz_Kafka#"Kafkaesque"

One of The Onion's best skits is a about a very "Kafkaesque" business.

> Business Week rated Franz Kafka International among the worst airports in terms of customer service, calling the employees completely indifferent to traveler's needs. "If there is as problem, fill out complaint form and place it in an envelope addressed to the name of the hospital in which you were born."

https://www.youtube.com/watch?v=gEyFH-a-XoQ

I had immediately thought of the Apache Kafka project, but this makes much more sense. Thanks for the new reading material too :)

I figured that "Apache Kafka-esque" was pretty appropriate here... Walmart is high volume, distributed, and its workers require a Zookeeper <rimshot>.

Ever try to talk to a human at Google when you need support for anything other than AdSense? That would be a good encapsulation.

I've tried one and only one time to speak to someone at Google (not for adsense). At that time I was trying to recover an old email account that had been unused for awhile. I was perfectly ready to just create a new account but still wanted to try to get at an email that I thought might be inside this account.

I was 100% ready to smack into a brick wall of non-responsiveness after I sent an email from a different account to their tech support. What actually happened was a live person called me back from Google and gave me access to the old account on the spot - despite my not remembering much about the account itself (date I opened it, name I registered it under, etc).

That resolution was practically out of the twilight zone...

This Asterix cartoon is excellent at demonstrating the horrors of a Kafka-esque bureaucracy: https://www.youtube.com/watch?v=JtEkUmYecnk

I work for walmart ecommerce. There are some legitimate reasons for their issues. I could talk about them in depth (turns out when you crush the competition with the world's best logistics technology you end up with a whole bunch of systems from the 70s/80s that are hard to update). Walmart was literally using the internet before most companies even knew it was a thing, and unfortunately their internal network reflects that. Another example is inventory management and sales reporting. When these systems were built there was nothing like them in the world to centrally manage inventory and availability and create feedback loops. But in 2018 going to the back office to get a 100 page printout generated by a mainframe once a day hurts more than it helps. It's like we climbed mount everest and got farther than anyone before us before building a camp, and now we're kind of stuck in it and by the way people have found even better routes since then.

But anyways, customers don't care. It's not their problem. I've had orders cancelled for no real reason so I just give up and buy it on amazon. I've had search so bad I can't even find what I'm looking for so I just give up and buy it on amazon.

And I'm somewhat incentivized to want to think the shopping experience is good.

Well, since you're here...

In mid-November, I bought a Christmas gift for my son (a drone) on-line through Wal-mart.

The text on the Wal-mart web-page urged me to purchase now (to guarantee on-time delivery).

The shipment of the drone was fulfilled by a 3rd party.

I got the drone in early December, wrapped it and my son opened it on Xmas day.

Drone didn't work. Out. of. the. box.

I asked for a refund, and Wal-mart customer service told me to pound sand b/c the product came from a 3rd party that had a 30-day return policy (no exceptions).

I know I'm a drop in the bucket, and I may not always be able to avoid Wal-mart, but I told them I would do my level best to shop elsewhere.

That's when you contact your bank and issue a chargeback.

This. This should be a more common practice for bad customer experience, as long as it's not done for fraudulent reasons.

Just so people understand:

> Holders of credit cards issued in the United States are afforded reversal rights by Regulation Z of the Truth in Lending Act. United States debit card holders are guaranteed reversal rights by Regulation E of the Electronic Fund Transfer Act. Similar rights extend globally, pursuant to the rules established by the corresponding card association or bank network.

https://en.wikipedia.org/wiki/Chargeback

Point being, chargeback isn't a service banks can stop providing if people start using it. It's written into the laws.

I assume if you start abusing it (trying to get things for free) then your bank will drop you as a cardholder.

No only that. I had what i thought legitimate card fraud but the problem was my card wasnt stolen and even worse - the chip was used and transaction was on the card. Eventually they got my money back via chargeback process but i found out later it was family-related fraud. Point being for 90 days my score went 10 ponts down and the credit card record was annotaded with message about this questionable chargeback. they could not believe it was true fraud.

That's unfortunate, and why we should have chip + PIN, not just chip.

I would be concerned about it hurting your credit score.

I should have done this.

Honestly, it never even crossed my mind to ask for a chargeback.

The number of times that I've had issues over the years is pretty small. For example, I think I've had two issues w/ Amazon over the years, and both times, they've fallen all over themselves trying to help. I think one time, they shipped me the wrong item, and they told me to just keep it and they would ship the correct item.

Service difference between the 2 vendors was like day and night.

Yea and amazon can resolve the issue without even having to talk to a human. The only time I have talked to an amazon employee was via email after I requested access to an ec2 instance(which felt weird, I wasn’t sure why it was so “exclusive” that I had to request access. Do they say no?)

Not too late to do a chargeback if they still haven’t refunded you. And will send some sort of signal in walmart’s internal systems. Companies track chargebacks.

Can't they simply point to the policy, which you agreed to, and contest the chargeback? It's not a magic policy to get your money back because you are unhappy.

I've noted that people quickly advise others to issue a chargeback as a resort to "win" against a company that has supposedly "wronged" them, even in cases where the company fulfilled its contractual obligations and no fraud whatsoever was committed. Here's a word of advice: do not issue a chargeback against any company you ever want to do business with in the future.

While this is arguably less a problem with WalMart - issuing a chargeback won't get you banned from their physical stores - a chargeback is especially something be avoided with every vendor where you have an "account" of some sorts, except if you don't care about being banned (permanently).

The examples are numerous. Issuing a chargeback against car rental companies can put you on their DNR (Do Not Rent) list[0]. Issuing a chargeback against Amazon may result in a permanent ban (including loss of access to your Kindle library and even your AWS account)[1]. Issuing a chargeback against Sony for a purchase over PSN may get you banned from PSN[2].

[0] https://www.flyertalk.com/forum/hertz-gold-plus-rewards/1897...

[1] http://bricksetforum.com/discussion/comment/159184/#Comment_...

[2] https://www.reddit.com/r/PS4/comments/2ivsz3/beware_if_you_s...

That's good information to be aware of, but chargebacks should never be the first recourse, and often at the point in time when the consumer is pursuing a chargeback, they likely want nothing more to do with the offending company, anyways.

I would be surprised if Walmart accepted open box drone returns at all. My local electronics store does not. It makes sense too. I've bought two drones and both died quickly due to collisions. Maybe there are drones that are stable and easy to fly, but the product category seems designed to eat money. I lost interest after the second one.

Walmart store certainly accepts open box returns, I've never personally had one, but I know people who've had them.

Walmart accepts open box returns. They also accept returns without a receipt, though I'm sure they impose some limitations on those.

They also accept open pill bottles.

Why wouldn't one always be able to avoid Wal-Mart? Hell, I'm sure I'd have a hard time giving up Amazon (which seems harder to avoid online), but it's really just a habit that would be difficult but not impossible to break entirely. Actually, moreso, because Amazon has worked it's way into so many facets of our lives, where Wal-Mart is far more limited online, and with physical stores, you've always got a choice.

> and with physical stores, you've always got a choice.

"Subject To Availability", as the poet once said.

You always have a choice in New York City or Atlanta. Not in Havre, Montana.

(Unless you skip physical stores and go to online ordering... in which case you're likely right back to Amazon.)

WRT always being able to avoid Wal-Mart, in less populated areas when a Wal-Mart opens if there's any local competition it's generally decimated.

When in the SF bay area I never shop at Wal-Mart. On the SF peninsula you have to go to the south bay or over a bridge just to find one last I checked, there are plenty of options.

But after spending winter in a rural area, it's been quite surprising the number of times I've found myself in a Wal-Mart to buy household goods simply because there's no alternative. And boy does the quality of their products _suck_, it's pretty much a store 80% full of garbage, the stuff is so bad I experience buyer's remorse just looking at it on the shelves.

> in less populated areas when a Wal-Mart opens if there's any local competition it's generally decimated.

Or never really existed to begin with.

I have lived in towns where, before Walmart came in, there was nowhere in town to get certain things. You had to drive over an hour to the next largest town to find a store, and that's hard in bad weather.

You couldn't contact the manufacturer? They probably would have a warranty unless they are a Chinese white label product. There's also credit card benefits that may apply, return protection and extended warranty. Then there's also the aforementioned charge back.

That's pretty bad. A few years ago I ordered a big TV from Newegg around black Friday as a Christmas present. I got it a few weeks before Christmas. When Mom opened it Christmas day the screen was cracked out of the box. I hopped on with Newegg support and they asked why there was a long delay between order and damage. I explained it was a gift we just opened and they apologized then replaced it.

I think the big online retailers have realized that a good return/RMA policy is key to their continued success. If Walmart wants in on this world they will have to figure it out too.

This is the answer for so much in technology.

Do you think the JET Purchase and systems integration will help?

Not really. They seem bright but I don't think their competencies have much overlap with walmart's problems, at least from a technical perspective.

[edit]

I'd like to revise my answer. I answered your question thinking in terms of systems integration. However it's quite possible Mark Lore will be a much more effective CEO than the person he replaced.

> turns out when you crush the competition with the world's best logistics technology you end up with a whole bunch of systems from the 70s/80s that are hard to update.

I hear Walmart makes much use of AS2. A means of transmission that I have had a lot of exposure to over the last few months (and absolutely no exposure to before this). While I think there were definitely some forward looking aspects to AS2, it's relative obscurity outside of very specific verticals and the fact that seemingly every COTS platform that implements it is overpriced and many years or even decades old (and feels like it) has not made my AS2 journey very pleasant to date.

So I just wanted to say: my condolences to you. :P

"But in 2018 going to the back office to get a 100 page printout generated by a mainframe once a day"

HOW?? Is there not an AS/2 to oracle sync. So you can at least get on oracle. Does walmart need one $$$?

https://docs.oracle.com/cd/E55243_01/pt854pbr0/eng/pt/tiba/t...

That said, fuck Oracle.

Well, that's documentation for PeopleSoft, so it's Oracle the company, but not necessarily backed by Oracle the database.

And to paraphrase the old quote, if you're having a problem sending messages between two systems, and you try to solve it by setting up an instance of the PeopleSoft Integration Broker, you now have a larger number of problems.

I am not sure what you describe is sensible reasons for the staleness of the technology.

If you look at the history of what happens to first movers you'll see it's pretty occurrence. Reality has no constraint to be sensible.

> I've had search so bad I can't even find what I'm looking for so I just give up and buy it on amazon.

Hang on, Amazon is the last place I'd go if poor search is something I want to avoid.

> Front line phone customer support was useless in a Kafka-esque manner.

Isn't that just how online retail works these days? Once you find your way through the menu tree, you get to talk to a person who sort of speaks your language, over a bad connection that will probably cut out in a minute or two, and who is paid to deflect. If it matters, you'll try to cause a Twitter storm. Otherwise you'll give up.

Yes. And Amazon isn't that much better. Last night it took me a full 10 minutes to get someone at Amazon on the horn. And you can't call Amazon. You can only request that they call you.

“You can only request that they call you.”

Sounds like exactly why Amazon is much better. They don’t put you on hold, and there’s no IVR menu to suffer through.

The best telephone systems I've been on did two things:

1. Tell you the estimated waiting time so you can decide for yourself if it is worth it,

2. and offer to leave a message to call you back at a time you want instead of waiting.

The live chat is the nirvana you seek. And that goes for pretty much any customer support anywhere in my opinion.

I called chewy.com because I forgot to apply a coupon code on an order that I placed 30 seconds before. They answered the phone, spoke English well, and had no problem applying the coupon code to an existing order for me. Quite nice.

This doesn't surprise me at all. The last time I was actually in a Wal Mart I had an employee yell right at me when I asked to get by their carts in the way. I complained to their corporate, expecting at least a call back. I got nothing. No phone call, no emails, nothing. They really do not care apparently. So I refuse to spend any $ there ever again.

Sam Walton once said "There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else"

But does anyone really think that they still follow this advice? Wal Mart has a well deserved terrible reputation.

Ultimately Amazon will eat them if they don't compete on customer service. Amazon is still being run by their Sam Walton, with Bezos obviously being obsessive about trying to make customers happy (although I wonder more recently if he isn't likely to lose focus, spreading himself & Amazon way too thin). That's of course why even huge companies tend to die and or fade given time, it's nearly impossible to maintain the founder fanaticism that got the business to the top of the mountain in the first place.

Very similar experience. I only ever end up in one when visiting relatives. I'd be surly if I worked there too, and totally understand it. Still makes for a miserable place to go.

And on a purely visceral level, what gets me is that the stores all stink. Seriously don't understand it - I'm guessing it is some cleaning product - but jesus, they all smell terrible.

I ordered a mattress from walmart and got a dining set.

It was more expensive than the mattress I ordered, and we needed one anyway, so I kept it.

Last year my wife ordered two chairs. A week after they were delivered she got an e-mail saying they were lost and replacements would be sent.

I don't know if that's a Wal-Mart problem or the third party or the shipper, but now we have four chairs.

A guy in my office ordered a 60-inch LCD TV. They delivered. Two weeks later another arrived. Customer service wouldn't acknowledge the first, so now he has two.

That's a situation where I feel like saying something could only make things worse.

"Walmart's new AI delights customers with this one weird trick."

I once ordered a notebook from Amazon and ended up getting a phone case (they sent a replacement). Bizarrely, the original notebook arrived the following week, so I ended up with two notebooks and a phone case.

Sufficiently advanced incompetence is indistinguishable from malice.

And sufficiently egregious incompetence is so glaring & obvious that failure to redress its harms is also indistinguishable from malicious neglect

I had the opposite experience... wanted to return an item, they said "keep it" and refunded the money instead.

I had similar with Amazon - returned item was lost, and I was told that I would receive the return when they get the item back. Difference being that it only took one more email, saying that you have proof of postage/tracking number, to get a return and a £10 gift card as an apology.

Not sure why that was was different to begin with though - most returns they process as soon as the item is shipped (i.e. before they get it back).

I don't know anything about this lawsuit, but the reason their growth in this most recent quarter went down so much is very simple:

They raised prices for online orders. Now stuff you buy online is not the same price as you get in the store, I used to buy a lot of stuff from them for delivery, now I don't.

I personally wouldn't mind slower shipment and lower prices. But I guess that's a hard sell in today's world.

Their online growth rate went down so much in the most recent quarter, because they rolled year over year past the acqisition of Jet.com. It's an issue of YoY comparables.

"Walmart's e-commerce sales growth in its U.S. business slowed to 23 percent during the fourth quarter, a sharp decline from 50 percent in the third quarter. It noted last year's results got a big boost from its acquisition of online retailer Jet.com."

http://www.chicagotribune.com/business/ct-biz-walmart-earnin...

insider information, they got their inventory wrong. they ran out of inventory the night of black friday.

> I personally wouldn't mind slower shipment and lower prices.

I think that would be expressed as an option for "combine my shipment with a bunch of others going to my neighborhood until there is a full tractor trailer load, or 30/60/90/120 days elapsed, and pass the savings onto me", because ground shipping is already available and about the slowest available standard shipping. Solving that logistics problem would be a strategic advantage, as it becomes a hairy optimization problem but with big savings over time, and offering this option opens up supply chain planning strategies that are now closed to us.

$7 million doesn't seem material enough to warrant a big conspiracy theory. And purposely mis-categorizing a few items to screw vendors of a little commission? Unlikely. These both seem like genuine issues of fast growth.

They may be genuine issues of fast growth. The problem is that, according to the lawsuit, when they were brought to the company's attention as problems that needed a solution, the person who raised the issue was ignored, and then fired. It might not have been deliberate to begin with, but the cover up in firing this guy is a separate matter, if in fact that's why he was fired.

Exactly. The case is not alleging that Walmart is engaging in a broad conspiracy, despite what the title of the article seems to suggest. It is simply saying that the plantif was terminated when he brought up to management that there were issues with how they were conducting business - "Walmart did not properly address these issues, its failure to do so could have serious long-term implications for its critically important e-commerce business."

>Wal-Mart sacrificed and betrayed its founder’s key principles of integrity and honesty, pushing those core values aside in its rush to win the e-commerce war at all costs.

Markets left to their own accord incentivize dishonesty and manipulation.

Innovation is only one way to compete, and a rare one at that. It’s one to be treasured, not defended on disgraceful terms like that of how both Amazon and Wal-Mart are content to treat their employees.

> Markets left to their own accord incentivize dishonesty and manipulation.

That is not the takeaway from this. The enemy of a corrupt, shady organization is an open and transparent market with lots of consumer options and stock researchers drilling deep into their numbers.

Sounds sensible, but how does one ensure that the "lots of consumer options" part holds? There seem to be quite a few sectors with winner-take-all dynamics (e.g. social networking), and quite a few other sectors that under many conditions tend toward oligopoly or monopoly (e.g. insurance, banking, credit history reporting).

> Markets left to their own accord incentivize dishonesty and manipulation.

Sort of? There's also a strong financial incentive to expose that dishonesty and manipulation - I mean, that's basically why Jim Chanos is famous.

I'm not saying I think the system is perfect as-is (far from it), just that it's maybe not as clear-cut as you're making it sound.

>Markets left to their own accord incentivize dishonesty and manipulation.

Only among the narrow minded & short sighted. Companies that view things like customer service as a cost center rather than customer retention & profit center tend not to experience as much success as their all-else-being-equal competitors. It's a PITA to return something to Walmart Online, refund are slow and sometimes nonexistent, requiring lengthy exchanges and delay. Amazon makes it easy, and is one of the primary reasons I long ago made them my first and, when possible, only stop for shopping online.

> Only among the narrow minded & short sighted.

So only the companies run by poor business managers or otherwise openly traded on stock markets. That makes me feel so much better.

Nah, only the companies run by humans.

You describe incompetence, not dishonesty & manipulation. Glib words are easy, strive for a deeper level of understanding than reflexive misanthropy.

Is the chart mislabeled or is it a forecast/projection? It shows % growth for Q3 and Q4 2018.

It shows declining growth quarter over quarter.

> Note: Fiscal year ends Jan. 31

The chart is fiscal year, not calendar year. Q4 2018 ended a month and a half ago for Walmart.

No, Walmart’s Q4-2017 ended on January 26, 2018. Q4-2018 doesn’t start for several months.

Fiscal year is numbered to match the calendar year it ends in. Walmart's FY2018 is already done and they've reported earnings.

http://s2.q4cdn.com/056532643/files/doc_financials/2018/q4/Q...

http://stock.walmart.com/investors/financial-information/qua...

It is typical to label the fiscal year by the date of the end of the period. This distinction doesn't matter when your fiscal year is Jan - Dec, but comes up in this case

If your fiscal year goes from Feb 1 2017 - Jan 21 2018, then that is commonly referred to as FY 2018

> “Wal-Mart sacrificed and betrayed its founder’s key principles of integrity and honesty, pushing those core values aside in its rush to win the e-commerce war at all costs,”

...Integrity? Honesty? This is the same Wal-Mart with the gender discrimination law suit in 2012 and that destroyed Rubbermaid prior to 2004, right?

There should not be anyway to "cheat" Amazon - as Amazon is the 2nd largest company in the world, anything you can do to outwin them should be allowed.

What a ridiculous statement. Especially when what Walmart is accused of doing doesn't "outwin" but instead consisted of lies and fraud against their 3rd party sellers and investors. Ethics & laws aren't relative to market share. Can a slow runner knife the guy in 1st place, because "anything should be allowed" against the current winners?

In this case, it was cheating to beat Amazon by duping customers and investors. Hurting people innocent to the situation is not okay, even if it is in a try to topple a behemoth.

Ohh yeah... The classic "let's screw our customers and lie to our shareholders so we can outwin f-ing Amazon because it's Amazon"

You realize the victims in that case is not Amazon, but customers and investors. Amazon still makes the same sales as before, it's just that your personal 401k is worth a little less now, and people who buy from Walmart get screwed.

I'd say most online shoppers are not the kind of people who would buy from Walmart, and most people who shop at Walmart are not the kind of people who will shop online.

Walmart is one of the largest ecommerce businesses in the world...

Or so they "say"...

80%+ of American adults are now routinely shopping online. [1]

Which is another way of saying that the majority of Walmart's customers are online shoppers.

[1] http://www.pewinternet.org/2016/12/19/online-shopping-and-e-...

I guess you'd be wrong. "Online shoppers" is most people these days, and Walmart is one of the strongest retail brands around. They don't even have to be that good to compete in online retail. I think you're likely the victim of a very specific perception bubble.

Ehhhh... try it, you'll be surprised.

I default to Amazon, but if I don't see what I want in my price range I try Walmart as well. This is probably playing into some stereotypes, but when I needed some thermals for going hunting this last year I first tried Amazon and Cabelas, but their prices were around $10/shirt. Walmart had them for less than $2/shirt. Free 2 day shipping, too!

Generally though—and perhaps to your point—buying from Walmart, whether in person or online, always feels lower quality than Amazon. I don't quite know why, but it does.

In-store pickup with Walmart is one of the worst experiences I've had shopping.

I think there are a lot more different kinds of people in the world than you do

In most places that Walmart operates, there are no "Walmart people" and "not Walmart people". There are just people who have to do some shopping, and almost everyone will go to Walmart if it's the convenient place to get what they need.

I've only found a segmentation to be a thing in some parts of California, where governments and municipalities work hard to keep Walmarts few and far between, and relegated to undesirable locations.

The segmentation occurs on most of the West Coast, people will either go to their local Kroger brand (Fred Meyer, QFC), Target or the local supermarket chain, considering Walmart as a last ditch store to get the item they want.

Another oddity is Texas, where HEB and Lowes Foods controls the majority of the grocery market, with Walmart, Kroger and Safeway (branded as Randall's) being higher priced also rans.

https://www.cnbc.com/2017/04/12/nearly-every-american-spent-...

About 95% of people in America went to walmart or walmart online. So I don't think your statement can be true.

Dunno. I once built websites for an e-commerce company where the products started at around $2k, and went up to as much as $30k with all the add-ons.

75% of the visitors were 55+ on iPads.

Ah, the people I see in Best Buy.

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