How Wal-Mart Abetted Food-Stamp Thieves

James Greiff is an editor for Bloomberg View. He was Wall Street news team leader at Bloomberg News and senior editor for Bloomberg Markets magazine. He previously reported on banking for the St. Petersburg Times and the Charlotte Observer.
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The images of empty shelves in the food section of a Wal-Mart store in Louisiana confirmed just about everything conservatives like to believe about food-stamp recipients.

What happened? For several hours Saturday a computer error lifted spending limits on the Electronic Benefits Transfer cards that most people on food stamps use to make purchases. Once word of the glitch spread (thank you, mobile phones, text messaging and social media), some customers loaded up and stripped two stores of food. Store employees called headquarters and were told to keep ringing up sales. The error was fixed a few hours later.

A story like this was click bait for sites such as Drudge Report, which on Monday plastered photos of the empty shelves across the top of its site, never mind important developments about negotiations to reopen the government and end the debt-ceiling stalemate.

Yesterday, National Review unloaded, saying the episode demonstrated the moral bankruptcy of those who receive the government benefits. Under the headline, "The Louisiana Heist," Charles C.W. Cooke roared: "This was theft, pure and simple, and its perpetrators should be treated as any other thief would be." And worse, this was taxpayer money that was being pilfered, a greater crime it seems than just regular ol' stealing from another person.

Yes, it might have been a crime, and it shouldn't be too hard to figure out who bought when they shouldn't have and to charge them with wrongdoing if that's what it comes to. The EBT cards, like a debit or credit card, leave an electronic trail of who purchased what.

And yet so much sturm und drang over what looks like -- at most -- an episode of supervised shoplifting. Store employees, who normally try to be vigilant for theft, were told to keep selling as if nothing out of the ordinary was happening. What's more, it wouldn't have taken much for Wal-Mart to stop the freeloaders if it had chosen to do so.

Here's why. Once the computer error was discovered, the Wal-Mart workers had the option of imposing a $50 spending cap that can be invoked in emergencies, a Louisiana Department of Children and Family Services spokesman told ABC News. Under the state's contract with Xerox, which administers the EBT system, retailers are allowed to limit spending to prevent just the kind of run on a store that Wal-Mart experienced in the event of a computer malfunction.

How would this work? Shoppers could spend up to $50, basically an amount that would prevent food-stamp recipients from being inconvenienced by not being able to make any purchases. Amounts above that would trigger the equivalent of a bank overdraft.

But here's the difference: It's the retailer that's potentially on the hook. So rather than taxpayers being fleeced, a notion that inflamed the Drudges and National Reviews of the world, it looks like the store will be stuck with the loss for failing to do something as simple as telling food-stamp shoppers, "Sorry, you've reached your limit today." Wal-Mart has said it made theright call.

This doesn't excuse what the shoppers did any more than it excuses anyone who takes something they don't own. But this is sort of the way the world is. People steal stuff. It's why there are locks on doors that, if you remember to use them, help prevent theft. Being dumb and deciding not to lock the door, which is analogous to what Wal-Mart did, is the opportunity that creates the thief.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
James Greiff at jgreiff@bloomberg.net