Wal-Mart environmentalism

By alternet
October 30th, 2008             [back to top]    

Want to understand why so many American workers find it so hard to organize unions in their workplaces? Look no further than Wal-Mart, a researcher for Human Rights Watch says.

Wal-Mart is a case study "of the abysmal workers' rights regime we have here in the United States," said Carol Pier, senior researcher on labor rights and trade for Human Rights Watch, an independent, nongovernmental organization that investigates human rights violations around the world.

In a speech last week at the University of Minnesota, Pier described her two-and-one-half-year study of Wal-Mart's labor-management record, which culminated in a 210-page report, issued in 2007, titled "Discounting Rights: Wal-Mart's Violation of U.S. Workers' Right to Freedom of Association."

The report found that while many American companies use weak U.S. laws to stop workers from organizing, the retail giant stands out for the sheer magnitude and aggressiveness of its anti-union apparatus. Many of its anti-union tactics are lawful in the United States, though they combine to undermine workers' rights. Others run afoul of soft U.S. laws.

"I like to think about it as a 'death by small cuts' strategy," Pier told the audience gathered at the University of Minnesota Law School. "And the effect is devastating."

In the course of her research, Pier interviewed dozens of current and former Wal-Mart "associates" (the term the company uses for its employees) and supervisors in six states and pored through thousands of pages of material from the National Labor Relations Board, the federal agency that enforces U.S. labor law.

Wal-Mart uses a subtle form of union-busting that starts with new employee orientation, where training includes watching an anti-union video, Pier said. The corporation has a 24-hour hotline for managers to report any signs of union organizing activity and a "labor relations team" is quickly dispatched to assess the situation.

Depending on the level of union activity, workers may be subjected to mandatory "captive audience" meetings where they are lectured on the evils of unionism. In some stores, Wal-Mart has crossed the line from subtle to heavy-handed by conducting surveillance on employees, disciplining and firing some.

When those actions are taken – clearly in violation of U.S. labor law – the failings of the system become clear, Pier said. Wal-Mart takes advantage of the exceedingly slow NLRB process to draw out cases for years. When a worker finally wins a case, the company faces no penalty – other than the requirement to reinstate the worker with back pay (minus anything he or she earned in other employment) and to post a notice saying "they won't do it again."

With nearly 1 million employees in the United States, Wal-Mart is the country's largest private employer. Yet none of these workers belongs to a union. Employees at two stores in Quebec, Canada, finally won union representation, but both stores have been closed – the second one earlier this month.

The International Labor Organization has cited the lack of penalties – and the fact that workers can be "permanently replaced" if they strike – as reasons that U.S. labor law fails to meet international human rights standards, Pier said.

The proposed Employee Free Choice Act – supported by Democratic presidential candidate Barack Obama and many Congressional Democrats – would address some of the shortcomings in U.S. labor law by levying fines of up to $20,000 for each violation and permitting workers to choose union representation by signing cards, bypassing the drawn-out NLRB election process during which many employer violations occur.

Still, Pier worries the new law would not be effective without a broader campaign to improve people's knowledge of unions. Companies like Wal-Mart could still continue the kind of early union-busting – such as showing videos during employee orientation – that create a chilling climate for organizing.

"EFCA will help," Pier said of the proposed legislation. "EFCA's necessary. I don't think it's the fix."

Pier's talk was sponsored by The Institute for Global Studies and the University of

Minnesota's Human Rights Program and co-sponsored by the Labor Education Service, publisher of Workday Minnesota.

For more information

Read Pier's report, "Discounting Rights: Wal-Mart's Violation of U.S. Workers' Right to Freedom of Association," http://hrw.org/reports/2007/us0507/.

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Sam's Club to open store to cater to Hispanics

Associated Press
10.28.08                                  [back to top]    

NEW YORK - Executives at Sam's Club, Wal-Mart Stores Inc.'s warehouse club division, told investors Tuesday that the company plans to open a new Mas Club store that sells products imported from Mexico to cater to Hispanic customers.

"Mas" means more in Spanish.

The news - announced on the second day of Wal-Mart (nyse: WMT - news - people )'s annual investors meeting in Bentonville, Ark. - come as Sam's Club is studying different store formats in a bid to expand its business amid a challenging environment.

Doug McMillon, Sam's Club president and chief executive, told investors that membership income is not growing as fast as sales. As a result, executives are focusing on improving offerings while trying to better communicating its value message to members.

Sam's Club officials noted that while food sales have been strong, general merchandise sales remain challenging.

This past summer, Sam's Club began testing a new concept called Sam's Club Business Center in Houston, which caters only to small business owners. McMillon said that at the new format, which does not have such categories as jewelry and pharmacy, business is beating the sales plan. Sam's Club executives also told investors that they are testing a smaller format for both small business and average consumers in Garden City, Kan. This 100,000-square-foot format would allow Sam's Club to move into smaller markets.

Mas Club will sell produce, meats and Hispanic food, drink, spices and candy. It will also have a full-service meat and seafood counter, an event area, a gas station and a cafe that will sell fresh-made tortillas. The store is scheduled to open during the first half of 2009 in Houston. Customers will have to buy separate memberships to Mas Club.

Copyright 2008 Associated Press. All rights reserved.

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Wal-Mart U.S. CEO Says Cutting U.S. Store Openings

Progressive Grocer
Oct 28, 2008                          [back to top]    

Wal-Mart Stores Inc. is throttling back on U.S. store openings and cutting back on overall capital spending, instead seeking to boost sales at existing locations by remodeling stores and improving selection. That was the message at the retailer's yearly analysts' meeting on Monday.

Eduardo Castro-Wright, president and c.e.o. of Wal-Mart U.S., said the division plans to open 191 stores in the current fiscal year, which ends in early 2009; and 142 to 157 stores in fiscal year 2010, compared to 218 U.S. stores in fiscal 2008.

Wal-Mart also plans $5.8 billion to $6.4 billion in capital expenditures this fiscal year for its U.S. division, down from $9.1 billion last year.

In fiscal year 2010, it plans to spend $6.3 billion to $6.8 billion, Castro-Wright said.

Wal-Mart's efforts to manage its balance sheet and capital spending more conservatively in recent years are now paying off with low interest rates in the tight market for short-term corporate credits, the company said. Wal-Mart has borrowed several hundred million dollars in the last several weeks in the commercial paper market as it readies for the holiday season at an interest rate of "substantially less" than 2 percent, Lee Scott, Wal-Mart Stores Inc.'s c.e.o., said.

The giant retailer said it is attracting more higher-income shoppers thanks to the stressed economy. Traffic at stores serving households with incomes above $65,000 has been growing much faster than at the chain as a whole.

Scott stressed that "Christmas will come on Dec. 25" in spite of the economy and said Wal-Mart will have the best prices in the market for the holiday season. He also said that in tough economic times, shoppers want to "treat their families right" when they can, and that this was evident in sales of children's apparel and Halloween costumes

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Blumenthal Targets Wal-Mart On Sales Tax

By George Gombossy,
The Hartford Courant
October 28th, 2008                          [back to top]    

Saying that Wal-Mart is violating state tax laws when requiring customers to pay a second sales tax on exchanges, state Attorney General Richard Blumenthal has instructed the giant company to conduct a review of its practices and take remedial action.

"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.

Blumenthal based his letter on complaints I have received from Wal-Mart customers and have published in both my Watchdog columns and on my blog this month at www.courant.com/ctwatchdog. Blumenthal included in his letter to Reeves a copy of the Oct. 23 Watchdog column.

Wal-Mart has insisted that its policy is to follow state tax laws, but has so far refused to discuss the issue other than making that blanket statement.

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

"This is a complex issue," he said, adding that Connecticut tax officials clarified the law for the company three years ago, and Wal-Mart is following it.

To Blumenthal the issue does not appear complex.

In his letter sent Friday night, Blumenthal told Wal-Mart that only the original sales tax can be charged when a customer exchanges the item for another, even if there is no receipt.

I have received complaints from customers who have shopped at 10 Wal-Mart stores in Connecticut where they were charged a second sales tax when they took merchandise back for an even exchange.

A second tax on the new item was charged even when customers could prove with a credit card statement that they had purchased the item there and could prove they had paid tax on the original item.

I went to the East Windsor store, where I was told that it was the company's policy to require that sales tax be paid again on the new item because Connecticut law demands it.

State Consumer Protection Commissioner Jerry Farrell Jr. is also looking into the issue.

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Wal-Mart Pulls Eggs From Stores In China Over Melamine Scare

Dow Jones Newswires
October 28th, 2008                          [back to top]    

SHANGHAI (AFP)--Wal-Mart Stores Inc. (WMT) is pulling a major brand of eggs from its stores in China as a precaution after the chemical melamine was detected in eggs in Hong Kong, a spokeswoman said Tuesday.

Wal-Mart has begun removing Kekeda brand eggs, produced by Hanwei Group, from its Chinese stores, said Mu Mingming, a spokeswoman at the company's national headquarters in Shenzhen.

"Over the past few days, we pulled this brand of eggs off shelves in all our outlets in China," Mu said.

Wal-Mart, the world's largest retailer, made the decision after Hong Kong authorities announced over the weekend that melamine had been detected in Kekeda eggs.

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Wal-Mart cutting U.S. store openings further

By Brad Dorfman
and Nicole Maestri,
Reuters
October 27th, 2008                 [back to top]    

CHICAGO/NEW YORK, Oct 27 (Reuters) - Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research, Stock Buzz) will slow the pace of U.S. store openings and cut back on capital spending, aiming to boost sales by remodeling existing stores and improving its merchandise selection.

The world's largest retailer also said on Monday that it is attracting higher-income shoppers with discounts as the U.S. economy reels from tighter credit, mounting job losses and falling home prices.

Traffic at stores serving households with income above $65,000 has been growing much faster than at the chain as a whole, Wal-Mart U.S. President and Chief Executive Officer Eduardo Castro-Wright said at the retailer's annual analysts' meeting, which was broadcast over the Internet.

"What that means is we are seeing a lot of new customers that did not consider Wal-Mart before, that consider Wal-Mart now," Castro-Wright said.

Wal-Mart is holding its annual two-day analyst meeting in Bentonville, Ark. Its U.S. business is making a comeback after the retailer saturated markets with stores and saw slower growth in recent years.

Cash-strapped shoppers are increasingly heading to its stores for low prices for necessities, such as food and medicine.

Wal-Mart is also benefiting from efforts started in 2006 to slow aggressive expansion plans and focus on improving U.S. sales. After its sales at existing U.S. stores rose 1.4 percent last year -- its lowest annual result in history -- sales have rebounded and gained 2.9 percent through September.

Analysts are watching to see if Wal-Mart can keep its momentum going amid the threat of a global recession. While Castro-Wright provided an update on its U.S. business, Chief Financial Officer Tom Schoewe is expected to outline expansion and capital spending plans for the entire business on Tuesday.

The company's shares closed down 3.4 percent at $49.67

SLOWING NEW U.S. STORES

Wal-Mart's U.S. division plans to open 191 stores in the current fiscal year, which ends in early 2009, and 142 to 157 stores in the next fiscal year, Castro-Wright said. The company opened 218 U.S. stores in fiscal 2008.

Wal-Mart also plans $5.8 billion to $6.4 billion in capital spending this fiscal year for its U.S. division, down from $9.1 billion last year. In fiscal 2010, it plans to spend $6.3 billion to $6.8 billion, Castro-Wright said.

While it reduces overall capital spending, it is putting money toward remodeling stores.

Castro-Wright said the retailer has seen dramatic improvement in its electronics department, where it has done extensive renovations, bringing in name-brands products and expanding space for shoppers to test out video games.

"We're going to increase investment behind remodels so that we can bring all of our fleet up to the same standard as fast as we can," Castro-Wright said.

Joseph Feldman, a retail analyst with Telsey Advisory Group, liked Wal-Mart's decision to shift some capital spending toward remodeling its stores.

"The upgraded store base should generate greater productivity and more satisfied customers due to the more enhanced shopping experience," he said in an email.

Wal-Mart, known for its massive supercenters that combine a full discount store with a grocery store, is also looking at building smaller stores and "fine-tuning" its merchandise.

For instance, it has increased its offering of pet products and beauty care items to draw more frequent trips by shoppers.

"We're becoming a pet care provider, as opposed to a pet food merchant," said John Fleming, its chief merchandising officer.

CONSERVATIVE EFFORTS PAY OFF

To win business in the tough economy, Wal-Mart has been touting its low prices. Wal-Mart Stores Inc CEO Lee Scott, who stressed that "Christmas will come on Dec. 25" despite the economy, said that Wal-Mart will have the best prices in the market for the holiday season.

He said that, in tough economic times, shoppers want to "treat their families right" when they can and that this was evident in sales of children's apparel and Halloween costumes.

Scott also said efforts to manage the company balance sheet and capital spending more conservatively in recent years are now paying off, with low interest rates in the tight market for short-term corporate credit.

In the last several weeks the company has borrowed several hundred million dollars in the commercial paper market as it readies for the holiday season at an interest rate of "substantially less" than 2 percent, Scott said.

The average rate for commercial paper was 1.96 percent in the week ended Oct. 24, down from 2.12 percent a week earlier, the U.S. Federal Reserve said. (Editing by Leslie Gevirtz and Andre Grenon)

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Labor activists, retailer clashing

By STEVE PAINTER,
Arkansas Democrat Gazette
October 26th, 2008                            [back to top]    

Wal-Mart Stores Inc. is sparring with a small laborrights group that says it has documented worker abuse at a garment factory in Bangladesh that helps supply the Bentonville-based retailer’s stores.

SweatFree Communities says its report “Sweatshop Solutions: Economic Ground Zero in Bangladesh and Wal-Mart’s Responsibility” is based on interviews with more than 90 workers. Those workers, the report states, cite instances of co-workers being kicked or slapped for minor infractions, including one claim that a pregnant woman miscarried after being kicked by a line supervisor.

When Wal-Mart inspects the plant, the report contends, factory managers know ahead of time and workers are coached on what to tell the inspectors.

Wal-Mart said it could not confirm any of the allegations; the company did make an unannounced inspection of the plant in August before the expected release date of the SweatFree report. The company said it offered to work with the labor-rights group in an attempt to verify the allegations and end any potential abuse in exchange for not releasing the report.

SweatFree Communities first contacted Wal-Mart via e-mail June 13 about a report that purported to document worker abuse that dated back several months, the company said.

“It surprised us that Sweat-Free waited nine months to advise us that they conducted interviews which suggested ‘a particularly abusive factory’ and ‘one of the worst in this export industry intensive area,’ as quoted in the report,” Wal-Mart said in a statement e-mailed by Richard Coyle, senior director for international corporate affairs.

Kathryn Ward, a sociology professor at Southern Illinois University at Carbondale who has been studying the lives of Bangladeshi women, including many garment workers, since 2000, said she wasn’t surprised at the working conditions described in the report.

“What they found is a very common thing in Bangladesh,” she said, but added, “Not all the garment factories are what I would call sweatshops.” Despite pay levels that are extremely low by the standards of developed nations — the minimum wage is about $ 24 a month — the garment industry jobs are important to the economy of Bangladesh, Ward said. As the largest buyer of garments in the region, she said, Wal-Mart could set a higher standard for pay and working conditions.

“They could be much more a leader in doing the right thing in Bangladesh,” she said.

At a conference in Beijing on Wednesday, planned long before the report was released, Wal-Mart said it intends to require importers and suppliers of private-label and nonbranded products to identify the name and location of each factory in the supply chain, and that by 2012 it will require suppliers to produce 95 percent of their goods from factories that rate highest on the company’s environmental and social standards. “Make no mistake. We expect from suppliers a firm commitment to meet social and environmental standards,” H. Lee Scott, Wal-Mart’s president and chief executive officer, said at the conference. Suppliers who fail to meet the company’s standards will be barred from future Wal-Mart business, he said.

TWO SIDES ENGAGE Wal-Mart said a company executive first spoke by phone with Bjorn Claeson, executive director of SweatFree Communities, on June 27, and that subsequent discussions led to an Aug. 12 memorandum of understanding between the two parties.

Wal-Mart said it agreed not to order from the factory while it investigated the allegations and corrected any violations of the company’s supplier standards. In return, the company said, Claeson agreed not to release the report until at least Aug. 31.

But by Aug. 20, according to the timeline Wal-Mart supplied, a reporter from Business Week magazine contacted the company seeking comment on a draft of the report.

Wal-Mart said it sent inspectors into the factory unannounced Aug. 14 and interviewed about 30 workers the next day.

Claeson acknowledges releasing the draft to Business Week. But he says the group expects Wal-Mart to abide by the conditions of the memorandum. He said that, based on the group’s inspection of U. S. port import / export records, Wal-Mart’s business accounts for more than 80 percent of production at JMS Garments, the factory in question. “They certainly have the clout and wherewithal to make dramatic improvement in this factory on their own,” Claeson said. The apparel his group tracked arrived at U. S. destinations from the Port of Chittagong, the city where JMS Garments operates in what is known as an export processing zone, according to the report.

THE ALLEGATIONS Claeson works from Bangor, Maine. National organizer Liana Foxvog is in Florence, Mass., and Midwest organizer Victoria Kaplan is in Goshen, Ind. SweatFree Communities ’ board of directors includes members of several other labor-rights groups. Its focus is persuading governing bodies of schools, cities, counties and states not to spend tax money for materials produced under what the organization deems to be sweatshop conditions. For the Bangladesh report, Claeson said his group worked with a nonprofit organization there, founded by a former garment worker, which educates workers about their rights under the laws of Bangladesh.

The group’s name in the report, Garment Research Group, and the names of all workers are pseudonyms to conceal their identities from factory supervisors, he said. Pictures of two Bangladeshi women appear on a page of the report describing the anonymous workers quoted in the report. On the same page, the report says that “the workers in the photograph below do not work at JMS Garments.” Among the abuses that the research group says workers reported: “Today a supervisor kicked an operator for a little delay in work. And the operator lay down on the ground after the supervisor kicked her.” “If any worker talks with other workers, or makes a mistake, or can’t fulfill the target, managers slap the worker’s neck or throw the spool of thread.” “Maybe the worker is looking back to tell her co-worker something. The supervisor will come and slap the worker for talking.” Workers also reported delays in getting paid and being paid for fewer hours than they worked. Work shifts stretch as long as 19 hours a day at a minimum wage that is currently about $ 24 a month, according to the report. Bangladesh’s low wages have attracted businesses, especially to its export processing zones. And Bangladesh has long been the source of reports of abuse in its garment factories, including a series of hidden-camera investigations by the NBC news show Dateline in 2005.

THE COMPANY RESPONDS In its statement, Wal-Mart said it promptly investigated the latest allegations and engaged a third party to assist management in future operation of the factory. “We honored our commitments and engaged in confidential discussions as when SweatFree first contacted us. We continue to work with the factory and we pledge to work with other parties who are truly interested in improving work conditions,” the company said.

Wal-Mart said one of the plant’s owners flew to Bentonville on Aug. 21 to meet with the company’s ethical standards team. The next day, the company said, it held a conference call with SweatFree and offered to form a coalition with the group, other retailers, trade associations and apparel companies using the JMS factory to “bring systemic change to the garment industry in Bangladesh.” But the company said it continued to question the accuracy of the SweatFree report, and told the organization it would not create the partnership if the report was published, according to Wal-Mart’s statements. Since SweatFree Communities released the report, Wal-Mart said, the company has been the subject of an e-mail campaign and “form letters have been filling up the e-mail accounts of several of our executives.” WAGE PRESSURES Ward, the sociology professor, said many garment factories in Bangladesh pass inspections. But subcontractors’ factories that Wal-Mart and other apparel buyers are not aware of often evade inspection, she said. Pressure on manufacturers to keep costs low is constant, she said. “The buyers keep pushing the wages down. If they would pay just pennies more a piece, it would make a big difference in the lives of women workers,” she said.

For her research, Ward has visited Bangladesh eight times, most recently last summer. She estimated that 85 percent to 90 percent of the workers are female, and supervisors are mostly male.

Trina Tocco, campaigns coordinator for the International Labor Rights Forum, said the report is further evidence that Wal-Mart has more work to do to weed out abusive workplace practices at supplier plants.

The Washington-based group has made Wal-Mart, including supplier factories in Bangladesh, a focus of its activities since 2004.

“They need to be given a real clear signal that Wal-Mart is serious about the codes of conduct,” she said. In its statement, Wal-Mart said it conducted 14, 400 audits in 9, 175 factories last year and provided training for more than 10, 100 suppliers and factory personnel. The company also pointed out its role in forming an industry coalition to condemn the use of forced child labor in Uzbekistan. On Sept. 30, the company said it instructed buyers to halt purchases from that nation to pressure the government to ban child labor in its cotton fields. Wal-Mart has changed its recent practice of issuing an annual report on ethical sourcing. It says the next such report will be included with the company’s sustainability report at a date yet to be determined. However, the company says it intends to issue an update in the next few days covering an 18-month period beginning in January 2007.

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Wal-Mart has perfected the art of union-busting, researcher says

By Barb Kucera,
Workday Minnesota
October 26th, 2008                            [back to top]   

MINNEAPOLIS - Want to understand why so many American workers find it so hard to organize unions in their workplaces? Look no further than Wal-Mart, a researcher for Human Rights Watch says. Wal-Mart is a case study "of the abysmal workers' rights regime we have here in the United States," said Carol Pier, senior researcher on labor rights and trade for Human Rights Watch, an independent, nongovernmental organization that investigates human rights violations around the world.

In a speech last week at the University of Minnesota, Pier described her two-and-one-half-year study of Wal-Mart's labor-management record, which culminated in a 210-page report, issued in 2007, titled "Discounting Rights: Wal-Mart's Violation of U.S. Workers' Right to Freedom of Association."

The report found that while many American companies use weak U.S. laws to stop workers from organizing, the retail giant stands out for the sheer magnitude and aggressiveness of its anti-union apparatus. Many of its anti-union tactics are lawful in the United States, though they combine to undermine workers' rights. Others run afoul of soft U.S. laws.

"I like to think about it as a 'death by small cuts' strategy," Pier told the audience gathered at the University of Minnesota Law School. "And the effect is devastating."

In the course of her research, Pier interviewed dozens of current and former Wal-Mart "associates" (the term the company uses for its employees) and supervisors in six states and pored through thousands of pages of material from the National Labor Relations Board, the federal agency that enforces U.S. labor law.

Wal-Mart uses a subtle form of union-busting that starts with new employee orientation, where training includes watching an anti-union video, Pier said. The corporation has a 24-hour hotline for managers to report any signs of union organizing activity and a "labor relations team" is quickly dispatched to assess the situation.

Depending on the level of union activity, workers may be subjected to mandatory "captive audience" meetings where they are lectured on the evils of unionism. In some stores, Wal-Mart has crossed the line from subtle to heavy-handed by conducting surveillance on employees, disciplining and firing some.

When those actions are taken – clearly in violation of U.S. labor law – the failings of the system become clear, Pier said. Wal-Mart takes advantage of the exceedingly slow NLRB process to draw out cases for years. When a worker finally wins a case, the company faces no penalty – other than the requirement to reinstate the worker with back pay (minus anything he or she earned in other employment) and to post a notice saying "they won't do it again."

With nearly 1 million employees in the United States, Wal-Mart is the country's largest private employer. Yet none of these workers belongs to a union. Employees at two stores in Quebec, Canada, finally won union representation, but both stores have been closed – the second one earlier this month.

The International Labor Organization has cited the lack of penalties – and the fact that workers can be "permanently replaced" if they strike – as reasons that U.S. labor law fails to meet international human rights standards, Pier said.

The proposed Employee Free Choice Act – supported by Democratic presidential candidate Barack Obama and many Congressional Democrats – would address some of the shortcomings in U.S. labor law by levying fines of up to $20,000 for each violation and permitting workers to choose union representation by signing cards, bypassing the drawn-out NLRB election process during which many employer violations occur.

Still, Pier worries the new law would not be effective without a broader campaign to improve people's knowledge of unions. Companies like Wal-Mart could still continue the kind of early union-busting – such as showing videos during employee orientation – that create a chilling climate for organizing.

"EFCA will help," Pier said of the proposed legislation. "EFCA's necessary. I don't think it's the fix."

Pier's talk was sponsored by The Institute for Global Studies and the University of Minnesota's Human Rights Program and co-sponsored by the Labor Education Service, publisher of Workday Minnesota.

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WAL-MART INSISTS ON TAXING EXCHANGES

By George Gombossy ,
Hartford Courant
October 23rd, 2008                              [back to top]   

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:

"When a retailer exchanges or replaces taxable merchandise with identical or similar merchandise for no additional consideration because of a defect or because the item is otherwise unsatisfactory to the customer, no additional sales tax is due from the customer regardless of whether the customer is unable to produce the original sales receipt or other verification of the date and place of purchase, and/or the exchange or replacement takes place more than 90 days after the original retail sale," the state Department of Revenue Services states in its 2005 ruling.

The state tax department - which refuses to say whether Wal-Mart is violating its laws - says the critical question is whether a store has an even exchange policy.

"If a retailer allows even exchanges, then sales tax should not be charged on the second item," department spokeswoman Sarah Kaufman wrote me this month when I asked similar questions about Home Depot.

Wal-Mart says on its website: "You can replace, exchange, or get credit for an item immediately in a store, pending product availability."

A Wal-Mart spokeswoman refuses to discuss the issue, despite several requests for clarification about its policy:

"George, I believe I've answered your question already, but I'll gladly do it again. Walmart's policy is to satisfy the customer and follow the law. Thanks again," Ashley Hardie, Wal-Mart spokeswoman, wrote me in an e-mail.

We probably aren't talking about a lot of money here and the second tax goes to the state, but customers who are charged the additional tax are furious.

During the past two weeks I have had written complaints from customers who shopped at Wal-Mart stores in Manchester, Cromwell, East Windsor, Torrington, Norwalk, Willimantic, North Windham, Newington and Southington.

Shirley Cleveland of Newington wrote me that a month ago she purchased a toaster from Wal-Mart in her town, but returned it after learning on a television news program that it was defective and could start a fire.

She returned to the store without a sales slip, but took her charge statement from her credit card account.

"I asked for a credit on my credit card and was refused, they would only give me a gift card and would not credit me the tax I paid. The amount was only under two dollars but it's in someone's pocket not mine," she wrote me.

Another customer, C. William Lee of Wethersfield, said he and his wife were told by a Wal-Mart manager Saturday in the Newington store that there can be no tax refund if cash was used, even though they had a receipt.

I went to the East Windsor Wal-Mart this week and confirmed what others have told me, that employees who work at the return desk say that state law prevents them from returning sales tax on an even exchange without a receipt.

On Friday, a spokesman for Gov. M. Jodi Rell said she believes that consumers shouldn't needlessly pay double taxes and would have the tax department review the issue.

But, since it's the Consumer Protection Department that is supposed to enforce return and exchange laws, the hot potato has been dropped into Consumer Protection Commissioner Jerry Farrell Jr.'s lap, to determine whether stores are properly charging taxes on exchanges.

Based on my dealings with Farrell, I think we will have a fair decision.

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Wal-Mart sets new rules for China suppliers

By AUDRA ANG
Associated Press
10.22.08                     [back to top]  

BEIJING - Wal-Mart Stores Inc., the world's largest retailer, said Wednesday it will set new quality standards for its suppliers amid a scare over toxic milk products that have sickened tens of thousands of babies across China.

Meanwhile, the United Nations released a report that recommends China increase oversight of its food safety system and hold businesses accountable for their products.

Mike Duke, vice chairman of Wal-Mart (nyse: WMT - news - people )'s international division, said the company is expecting "greater transparency ... from our supplier partners" beginning next month.

They will be required to "tell us the name and location of every factory they use to make the products we sell," according to Duke's prepared remarks delivered at a company conference in Beijing. "Essentially, we expect you to ask the tough questions, to give us the answers and, if there's a problem, to own the solution."

Wal-Mart will apply the new standards to apparel first and eventually use them on all its products, Duke said. No other details were given.

The measures by Wal-Mart, China's largest foreign retailer, come as confidence in Chinese exports has been shaken after a series of product safety scandals.

Last year, high levels of industrial toxins were found in exports ranging from toothpaste to toys.

China is still reeling from the revelation last month that the chemical melamine, which is used to make plastics and fertilizer, was added to infant formula to artificially boost nitrogen levels and make it seem higher in protein when tested. The deaths of four babies have been linked to the practice and some 54,000 children have been sickened.

Contamination has since turned up in powered and liquid milk, yogurt and other products made with milk. Dozens of countries have pulled Chinese-made goods with dairy ingredients off their shelves to test for melamine.

Health experts say ingesting a small amount poses no danger, but in larger doses, the chemical can cause kidney stones and lead to kidney failure.

Wal-Mart sold Chinese-made cribs which were part of a recall this week by New York-based Delta Enterprises. The 600,000 cribs of various models with spring-loaded safety pegs were manufactured in China and sold between January 2000 and January 2007.

Another 985,000 cribs were recalled because of the potential for missing safety pegs. Those products were manufactured in Taiwan and Indonesia and sold between January 1995 and September 2007.

The recall was instituted after the deaths of two babies.

In its report released Wednesday, the United Nations recommended that China tighten oversight focusing on high-risk areas of the food chain, have an all-encompassing food safety law that would cover the whole industry and hold businesses responsible for the products they sell.

"The national system needs urgent review and revision," U.N. Resident Coordinator in China Khalid Malik said.

Additionally, China needs a unified regulatory agency, the report said, and a place consumers can go for reliable information. The task is currently split between different government agencies, creating uneven enforcement that is further complicated by numerous laws.

In the southern Chinese territory of Macau, government officials said late Tuesday that three more children have developed kidney stones, bringing the total number of sick children to seven.

Ultrasounds confirmed the diagnoses in two 6-year-old girls and an 11 year-old boy, Macau government information officer Elena Au said.

The boy is currently hospitalized but the two girls developed small stones and did not require hospital treatment, Au said.

The girls drank milk made by Chinese dairy Yili Industrial Group Co., whose products have been confirmed to contain melamine.

Au said officials are still investigating what brand of milk the boy drank.

Associated Press writer Henry Sanderson in Beijing contributed to this report.

Copyright 2008 Associated Press. All rights reserved

Federal Safety Regulators to Issue Crib Durability Standards

By Annys Shin,
Washington Post
October 22nd, 2008                         [back to top]  

After two infant deaths triggered the recall of 1.6 million cribs Monday, federal safety regulators are moving to address a longstanding gap in crib safety regulations: durability standards.

The Consumer Product Safety Commission plans to issue new regulations that deal with the hardware problems that have been at the center of five recent crib recalls and contributed to the deaths of at least two other children.

Hardware can become worn down over time, unbeknownst to parents, who often reuse cribs, sell or pass them on -- sometimes without all the parts or instructions. The two deaths -- one in May 2007 and the other in July -- that led to this week's recall by Delta Enterprise of New York City involved used cribs, CPSC spokeswoman Julie Vallese said.

Certain crib parts, such as mattress supports and side rails, are tested to meet durability standards. But the standards need to be more comprehensive and stringent, consumer advocates and federal safety regulators said.

"Voluntary standards for cribs have addressed many safety issues and over the years the agency has seen the number of crib fatalities go down," Vallese said, "but the voluntary standards have failed to address durability issues."

CPSC officials did not say how long it would take to issue a crib durability standard. The agency staff hopes to have a proposal for the commission to review by the end of the month, Vallese said.

Cribs with drop sides are more likely to have hardware problems, the CPSC said. Drop sides can be moved up and down, usually along a track, to make it easier to get a child in and out of a crib. A CPSC analysis of more than 1,000 reports of potential crib failures over the past year found that in many cases the drop-side corners came off the tracks or hardware that is supposed to stop the side from moving failed to work. And the problems can get worse without parents noticing, as a baby pushes or leans against the crib.

Some consumer advocates want drop-side cribs retired altogether.

"I'm not sure the drop-side bar provides enough utilitarian benefit to justify what appears to be an increased risk of strangulation and suffocation," said Alan Korn, director of public policy for Safe Kids USA, a Washington group that seeks to prevent accidental childhood injury and death.

Cribs are governed by mandatory and voluntary standards. For example, mandatory standards dictate the amount of space allowed between slats while voluntary standards issued by ASTM International, an independent standards-setting body based in West Conshohocken, Pa., cover the content of warning labels and the height of corner posts.

Consumer advocates have tried unsuccessfully for much of the past decade to get ASTM to develop a more comprehensive durability standard, said Donald Mays, senior director of product safety for Consumers Union.

Underwriters Laboratories, an independent product safety testing and certification organization based in Northbrook, Ill., has developed a "rocking test" in which a crib is shaken tens of thousands of times using weights in order to better simulate real-life use by children who jump and rattle their cribs. Canada has a similar test. But so far, no crib manufacturers have asked UL to test their products using that method, said UL spokesman John Drengenberg.

The Delta recall was the fifth in the past year involving hardware that was broken, missing or failed to function, according to the CPSC. Delta recalled 600,000 cribs made before 2006 and sold between January 2000 and January 2007 because of problems with a spring-loaded peg at the bottom of the legs that can cause the drop side to come off and create a gap into which a child can fall and suffocate. In July, an eight-month-old boy in Tallahassee, Fla., died in a Delta crib. A spring-loaded peg apparently failed and the drop side detached.

Delta recalled another 985,000 cribs made between 1995 and 2005 and one model made in 2007 that used a different type of peg. If the pegs are missing, the drop side can come off, creating a suffocation hazard. In May 2007, an eight-month-old girl from Bryan, Tex., died in a used Delta crib that had been reassembled without the pegs, Vallese said. The cribs were sold at major retailers, including Wal-Mart, Kmart and Target.com, from January 1995 through September 2007.

Hardware problems and detached side rails were also involved in the deaths of at least two children in cribs made by the now-defunct Simplicity of Reading, Pa., which led to a recall of 1 million cribs.

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Wal-Mart pushes global suppliers to new standards

By Kimberly Morrison,
THE MORNING NEWS
October 22nd, 2008                    [back to top] 

Wal-Mart Stores Inc. on Wednesday outlined new rules for its international suppliers -- starting with China -- to adhere to higher environmental and safety standards.

The global responsible sourcing initiative requires Wal-Mart's worldwide supply chain to comply with local environmental laws as well as incorporate some of the retailer's own green initiatives, sets a higher standard for product safety and mandates greater transparency.

The retailer announced in Beijing at a gathering of more than 1,000 suppliers and officials that the company intends to start in January with Chinese manufacturers and suppliers to Wal-Mart stores in the U.S., Canada and the United Kingdom. The program will then expand in phases to include all international suppliers by 2012.

The move follows a wave of product recalls and recurring safety concerns about products made in China, particularly in toys.

"Maintaining the trust of our customers -- today and in the future -- it ties hand-in-hand with improving the quality of our supplier factories and their products," said Lee Scott, Wal-Mart chief executive. "A company that cheats on overtime and on the age of its labor, that dumps its scraps and chemicals in our rivers, that does not pay its taxes or honor its contracts, will ultimately cheat on the quality of its products."

Wal-Mart did not specify its new standards for safety and quality, but said it aims to drive returns of defective merchandise "virtually out of existence" by 2012.

But it is seeking greater transparency in the supply chain, requiring all direct-import, private-label and non-branded product suppliers to provide factory information to Wal-Mart. Within two years, direct suppliers will also be required to source 95 percent of their products from factories that receive top marks in audits for environmental and social practices.

Wal-Mart directly exports about $9 billion from China annually and estimates export volume by third-party suppliers is also around $9 billion, according to the company's Web site.

"With the world's largest population and a robust manufacturing industry, no market presents a greater opportunity for environmental sustainability to take hold than China," said Ed Chan, chief executive of Wal-Mart China.

Wal-Mart plans to improve energy efficiency among its Chinese factories. It has set a goal for the top 200 factories it sources from to achieve a 20 percent improvement in energy efficiency by 2012.

The company plans to cut energy use at its stores, opening a prototype store that requires 40 percent less energy and reducing by 30 percent the amount of energy used at existing stores within two years. It is also cutting water use in half within the same time period.

Other environmental initiatives include bringing more environm