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Who’s to Blame in Walmart, Xerox EBT Fiasco?

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Walmart (NYSE: WMT) and Xerox (NYSE: XRX) are pointing fingers at each other after Xerox’s Electronic Benefits Transfer (EBT) system failed at stores in 17 states last weekend.

A technical glitch – a Xerox backup generator failed – temporarily lifted the spending limit or EBT balance for food stamp recipients. As a result, at two Walmart stores in Louisiana, some EBT recipients were able to snag 8 carts of groceries or more. They literally cleared the shelves at the two locations.

"It was definitely worse than Black Friday. It was worse than anything we had seen in this town," Springhill Police Chief Will Lynd told ABCNews.com, the Gospel Herald reported.

However, it is unclear which company will pick up the tab for the snafu. Kayla Whiting, a spokeswoman at Walmart's Bentonville, Arkansas, headquarters, pointed to Xerox as the source of the problem and referred further questions to the EBT provider, Huffington Post reported.

Xerox executives don’t want to take the blame either. The technology provider has a "documented process for retailers like Walmart to follow in response to EBT outages”, Xerox corporate spokesman Bill McKee told Huffington Post. Walmart opted to continue accepting food stamps during the outage so people could feed their families, spokeswoman Whiting told KSLA-TV, according to The Gospel Herald.

In this case, is it the technology provider or the retailer that should bear the costs? We just don’t understand how Walmart store personnel –once they started seeing cart after cart of groceries being hauled out of the stores – didn’t stop the madness. Corporate certainly could have ordered EBT systems at those stores to be shut down temporarily, and then shoppers could return later that day to purchase their groceries.