Minneapolis-based Target Corporation is being accused of shortchanging its customers across the US by only partially crediting certain manufacturers' coupons at checkout time.
According to this story in the LA Times, some customers are finding that a coupon with a face value of $1.50 are being credited for only $1.02, while this blog at the Minneapolis StarTribune says that others who have redeemed $4.00 worth of coupons saw only $2.54 taken off.
Target, which operates 1,754 stores in 49 states, has known about this problem since August, the LA Times says. The Times also says the company, "couldn't explain why the problem was happening or why it hadn't been resolved."
Couldn't or wouldn't?
The Times quotes a Target spokesperson as saying:
"We are aware that some coupons are not scanning for the full amounts... We are aware of the issue and are diligently working on a fix for that and will implement it as soon as possible."
Target blames the problem on some sort of computer glitch.
Reading through the various published articles on the issue, I gather that the issue arises most often - but not always - when a manufacturer's coupon requires the purchase of multiple items.
In addition, if the use of the coupon results in a price of less than zero, then the credit applied is the difference of the retail price and the coupon credit. So, if the coupon is for 50 cents, and the item costs 39 cents, the credit given is only 11 cents.
What is curious is why this problem all of the sudden showed up in August. It isn't like this is a brand new situation. The LA Times says that multi-item coupons make up about 25% of all manufacturers' coupons.
I suspect there was a computer system upgrade or maintenance fix in late July or early August that wasn't fully tested out.
The amount of money customers have been short-changed, and Target has kept, is likely not trivial, as Target gets reimbursed the face value of coupons its customers redeem.
Given the error is in Target's favor, one might be tempted to speculate that Target was in no hurry to fix the problem. With the national publicity now on the issue, that may now change.
According to the LA Times, Target isn't saying how much money is owed customers, nor has it made any mention of the issue on its web site that I can find. So much for being open and transparent about the problem to its customers.
If any of you have had problems at Target, let me know.
In "related" billing system news, Verizon has agreed in a settlement (see PDF here) with the Federal Communications Commission (FCC) to pay $25 million to the US Treasury for overcharging 15 million of its customers more than $50 million in "mystery fees" dating back to 2007.
Verizon, in this press release, maintains the overcharges were "inadvertent" and that it was refunding the $50 million on its "own initiative and because it is the right thing to do for our customers."
Verizon also apologized and accepted responsibility for the billing error.
Of course, why it took Verizon two years to discover the problem even after numerous customer complaints, wasn't addressed in its press release.
Robert N. Charette is a Contributing Editor to IEEE Spectrum and an acknowledged international authority on information technology and systems risk management. A self-described “risk ecologist,” he is interested in the intersections of business, political, technological, and societal risks. Charette is an award-winning author of multiple books and numerous articles on the subjects of risk management, project and program management, innovation, and entrepreneurship. A Life Senior Member of the IEEE, Charette was a recipient of the IEEE Computer Society’s Golden Core Award in 2008.