Hy-Vee said it has suspended its employee discount program effective this Monday after it noticed that it was being used fraudulently.
The West Des Moines, Iowa-based retailer said it plans to revamp the program during the coming weeks, with the goal to relaunch it by mid-April. The program was originally launched in 2019 with specific guidelines that would allow employees and one member of their household to receive a 10% discount across the store every day.
“Over the past several months, a significant uptick in the number of users utilizing the employee discount who were not living in the same household or living in other cities was identified, in addition to other fraudulent practices and loopholes that were occurring within the program,” Tina Potthoff, senior VP of communications, Hy-Vee, said in a statement provided to SN. “The discrepancies found were significant enough to signal a much broader issue that needed to be addressed immediately.”
In a video that was sent to employees and shown on local media, Georgia Van Gundy, executive VP, chief of staff and chief customer officer at Hy-Vee, said the company had evidence of “multiple employees having multiple families or households in various cities and various states using the discount.”
According to a report on KCCI, the retailer found one example of an employee’s discount being used in five different states within an hour, and also found evidence that items were being bought using the discount and then resold.
The company said that even though the 10% employee discount was suspended, it continues to offer “one of the most competitive and comprehensive benefit packages in the retail industry.”
These include a free Hy-Vee Plus premium membership, which includes free delivery and Express Hy-Vee Aisles Online pickup as well as other free monthly items, exclusive discounts, and other perks, along with tuition assistance, a matching 401(k) savings program and various health benefits.
Scan & Go discontinued
Separately, Hy-Vee also notified users of the company’s Scan & Go mobile app that allowed for self-scanning and checkout that it was discontinuing that service, also effective on Monday.
“While the Scan & Go service was popular with a small segment of our customers, the overall use of the service is not significant enough for us to continue to offer it in our stores,” the statement said.
The Scan & Go mobile app allowed customers to scan item barcodes as they shop and then check out at a mobile kiosk to pay before leaving the store.
Hy-Vee launched the app in 2021 at some location in Des Moines in 2021, and had expanded it to “dozens of locations” as of last August, according to Future Proof Retail, the company that provides the app.
Other grocery retailers that have implemented the app, according to Future Proof Retail, include Big Y in New England and Fairway in New York. In 2020, Associated Wholesale Grocers said it was making the app available to its independent members.