Walmart wowed the industry in November by announcing that its Q3 e-commerce sales were up by 50 percent over the prior-year period. But one ex-employee has called the retailer’s practices, as they related to online sales, into question.
In court papers filed Thursday, former director of business development Tri Huynh said Walmart was reporting inflated online sales numbers, and when he raised questions, the big-box retailer let him go, according to Reuters.
Hunyh said the alleged activities were motivated by Walmart’s desire to play in Amazon’s league. According to the ex-employee, the company allowed practices to continue that overcharged vendors that sold on its third-party marketplace for months. The purported padded commissions ultimately made it seem like the company was selling more than it actually was, Hunyh said. Though the sellers were able to recoup the difference, he said, the original commissions were reflected in the company’s sales.
Other concerns, according to Hunyh, included what he said was an underreporting of returns and refunds so they didn’t ding sales numbers. He said that alone boosted top-line e-commerce numbers by $7 million.
Hunyh said Walmart has also used Jet to help create misleading results. He contends that the company would list the same item on both Jet and Walmart’s sites but report the items’ sales with different SKUs.
In his wrongful-termination suit, Huynh said he was fired for escalating his concerns in an attempt by the retailer to protect Walmart’s reputation.
“This litigation is based on allegations by a disgruntled former associate, who was let go as part of an overall restructuring,” Walmart told CNBC. “We take allegations like this seriously and looked into them when they were brought to our attention. The investigation found nothing to suggest that the company acted improperly.”
Walmart and Amazon have been locked in a race for market share as the retail chain attempts to use its might — and a series of acquisitions — to become more dominant in the online space. Using pricing, free shipping and fulfillment options to woo consumers, the two companies have been continuously attempting to outdo each other.
Editor’s Note: This story was reported by FN sister magazine Sourcing Journal. For more, visit sourcingjournal.com.