Wal-Mart Disaster Profits

Yogyakarta   38 days of exile

My friends at Wal-Mart have been getting rave reviews for how well they have handled Katrina. They ponied up $23,000,000. They had trucks ready to come in as soon as the roadblocks went down. Some of their store managers opened the stores to allow public safety and other folks to reprovision their suppies. Where credit is due, they should get it.

Turns out though that disasters are also good business, especially if you have someone like the Red Cross operating to provide your company — I’m still talking about Wal-Mart here — with monopoly profits and exclusive purchase agreements for those stricken by the disasters.

Seth Weingart couldn’t hang any longer with the disjointed situation between living in one place, commuting for hours, and working in another, so he finally because a workplace casualty of Katrina and Rita. Nonetheless, he filed the following report with me that gives an inside look of why Wal-Mart can perhaps seem like lady bountiful thanks to their buddies at the Red Cross:

    On Monday I went to the Red Cross to sign up for the disaster assistance. We arrived at the office and signed in, and then you are summoned by a volunteer to fill out all the paperwork. They check your ID to make sure you are in fact a resident of an affected area. Then they fill out a bunch of forms, and ask a few questions about needs for housing, medical services, and the status of your displacement, then the volunteer goes to get the disbursement order, including another form to fill out.

    Depending on the size of your family, you receive different levels of assistance. A family of 1 receives $360.00 and a family of 2, receives $665.00….The disbursement order is a voucher to shop tax-free ONLY at Wal-Mart. Except it’s not necessarily tax-free, and from my experience there are numerous complications.

    When you use the voucher the first time, you must go to a specific Wal-Mart store, most likely the closest Wal-Mart to where you are staying. It doesn’t matter if it is a supercenter or not. After using the voucher the remainder of your money is put on a Wal-Mart gift card, which of course can only be used at Wal-Mart of course. No one who works at Wal-Mart knows how to process the Red Cross vouchers so you have to wait in line at customer service until they can find a manager to input all the necessary information.

    After the first use of the voucher, the Wal-Mart employee is supposed to take the voucher, which explains the tax-exempt status. The Red Cross volunteer who processed us specifically told us to make a photocopy of the voucher, so we could continue to shop tax-free with the remainder of the money. When we went to a second Wal-Mart that sold groceries with the gift card and copy of our tax-free voucher, we were told by the employees there that management informed them that you can only shop tax-free the first time. Afterwards you had to pay taxes. We argued with them, because this made absolutely no sense. If we knew that the tax-free only applied once, we would have used up all the money at the first store. There was no resolution because it was too late to contact the Red Cross, and we were so frustrated by the experience, that we just left the store without buying anything.

    Now back to the Red Cross, I asked them if I could get something other than a Wal-Mart voucher, because I…would greatly prefer not to shop there. I was given an ultimatum: either I take the Wal-Mart bucks or I get nothing. Faced with that choice, I reluctantly accepted it, then the volunteer went on about how the money I received was from individual donations, and not money donated by Wal-Mart, as many refugees believed… I doubt the Red Cross tells people that their donations are actually going into Wal-Mart’s pockets though, or that they have worked out a deal with the company to get poor, displaced people into their stores.

    And what to you suppose people are going to buy with their Wal-Mart bucks? Food, clothing, medicine, essentials? It’s hard to say, but the Red Cross advised you to spend your money on these things. Of course the voucher prohibits beneficiaries from purchasing alcohol, tobacco, or firearms, but anything else is fair game. If you’re lucky, maybe you can even find a Wal-Mart with a gas station, so you might purchase something useful to help you get home.

    So Wal-Mart makes a killing off hurricane victims both because in many places they truly don’t have anywhere else to shop, and they are given so-called relief that can only be used [there].

A story from the front! The Red Cross and Wal-Mart — what a team!!! One seems not to know what to do with the money, and the other is all about it.

September 28, 2005

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