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Jeff Kagan: Big Mistake Walmart, Sam’s Club Are Making

Walmart and Sam's Club are making a mistake with several new customer un-friendly moves which punish good customers to battle the shoplifting problem. This will hurt them in a competitive market.
Equities columnist Jeff Kagan is a telecom, technology and wireless analyst and consultant. He covers 5G, AI, IoT, the metaverse, autonomous driving, healthcare, telehealth, pay TV and more. Follow him at and on Twitter @jeffkagan and LinkedIn.
Equities columnist Jeff Kagan is a telecom, technology and wireless analyst and consultant. He covers 5G, AI, IoT, the metaverse, autonomous driving, healthcare, telehealth, pay TV and more. Follow him at and on Twitter @jeffkagan and LinkedIn.

Image: Walmart Inc.

Attention Walmart shoppers. Walmart is no longer accepting returns of grocery items. I can’t believe it either. But when I tried to return a simple can of soup bought yesterday, with my receipt in hand, I was denied. They said they no longer take back grocery items except for perishables, which makes no sense at all, especially in a competitive market.

Yet this is what the customer service clerk and her customer service manager both told me. Imagine that. No, I don’t know whether this is nationwide yet, but apparently it is starting to happen.

Add this to the fact that Walmart [WMT] now has someone at their doors checking your receipt against what you have in your bags, and you can see the customer un-friendly behavior they are starting to use against their customers.

If Walmart, Sam’s Club have shoplifting problem, don’t punish good customers

Perhaps they have a problem with shoplifting. If so, they should find a way to deal with the shoplifters and not punish and insult every honest customer they have.

Walmart and Sam’s Club are both owned by the same corporation, and both are spinning out of control with many new anti-consumer rules. While they have grown into successful businesses over decades, both now seem to be shooting themselves in the foot and damaging their brand.

They are suddenly making some serious mistakes with these short-sighted actions, are insulting the customer and treating them with disrespect.

Brand value takes years to build and seconds to lose

What they forget is, brand value only lasts when you keep improving. It takes years to build a successful brand, but it can be destroyed with a single action.

Neither company seems to realize how they are insulting customers. Neither company seems to care. Yet that’s exactly what they are doing.

Customers say, this takes the joy out of the shopping experience. I hope they realize this and fix the problems before they impact their business and customers find competitors, sending Walmart’s market share down.

Winning companies focus on the customer first

The companies that first focus on making sure the customer is satisfied are the real winners. First, they focus on their workers. Then, happy workers take great care of the customer, who keep them in business. Ultimately, focusing on the worker and the customer ultimately rewards the investor.

This is a winning philosophy. This is not the philosophy at Walmart and Sam’s Club.

Companies who focus on the investor only, especially in a competitive industry, typically suffer long-term. Walmart and Sam’s Club have always focused on the investor first. However, now they now seem to be focusing on the investor only, and the customer is feeling the pinch.

It seems suddenly these two companies are turning up the discomfort dial distracting the customer from the shopping experience. This is the wrong path.

Never treat customers with disrespect or they will shop elsewhere

Even if you have a shoplifting problem, you should never treat your good customers with disrespect. After all, each customer chooses where to shop. You never want to give customers a reason to shop at your competitors, leaving you behind in the dust.

To make matters even worse and more confusing, apparently Walmart no longer has one easy to understand return policy. They gave me a sheet to read which was at the customer service counter.

Now, depending on the item, there are different rules. And in some cases, you cannot return the item at all. This is not simple for the customer. This kind of behavior will only hurt the companies in the long-term.

Yet the customer does not know the new, confusing and conflicting rules. And you cannot even ask the cashiers because they don’t have a clue either.

Walmart and Sam’s Club becoming customer unfriendly

Over the last few decades, Walmart always made it easy to shop there, and that’s why millions of shoppers did just that. So why are they now making shopping there much more difficult?

Customers who get burned with multiple confusing policies will think twice before continuing to shop there.

Sam’s Club is also tightening the reigns on their customers. When leaving the store, they used to force every shopper to show their receipt and compare it to the shopping cart. That was insulting enough. Now, suddenly they are asking their customers to show their membership card just to walk in the door. That’s nuts. Then again, their competitor Costco has always done the same thing.

Customers who no longer use a member card and who use the smartphone app find it difficult and time-consuming stand at the front door and find the app and get to the right page just to be allowed to spend money with them.

This is a friction point that does not sit well with many shoppers.

Why would you make it difficult for me to shop at your store? To spend money at your store?

Competitive retail stores will do anything to win a customer

Remember when good retail stores would do anything to get customers to come to them? And how they would do anything to make the customers happy, even delighted, so they would come back?

That’s still the way the vast majority of competitors do things. That’s who Walmart and Sam’s Club compete against. And that’s why this is a big marketing mistake they are making.

So, whether we are talking about stores like Target [TGT], or online stores like Amazon [AMZN] or grocery stores from coast-to-coast that love to delight the customer and keep them coming back time and time again, both Walmart and Sam’s Club are making a big mistake insulting their customers.

They seem to have lost track of the winning combination to focus on the customer. Either that or they simply do not care about the customer. Focusing on the investor first and in this case, only, is a recipe for long-term loss.

Walmart and Sam’s Club have never been customer focused, but at least shopping there worked. Now they are taking the pleasure of shopping away and turning their stores into places customers no longer want to shop.

Jeff Kagan is an columnist. Kagan is a Wireless Analyst, Telecom Analyst, IoT Analyst, Industry Analyst, Influencer, speaker and consultant. He follows wireless, wire line, telecom, Internet, pay TV, cable TV, IPTV, Cloud, Mobile Pay and communications technology. Email him at [email protected]. His web site is Follow him on Twitter @jeffkagan.


Equities Contributor: Jeff Kagan

Source: Equities News

Stories like Charlie Munger’s inspire me. It shows why you must live life as an optimist.