( CNBC.com )
Walmart and its big-box warehouse subsidiary Sam’s Club accused rival retailer BJ’s Wholesale Club in a lawsuit filed Tuesday of stealing technology that powers a popular self-checkout option in the Sam’s Club mobile app.
The suit, filed in federal court, claims Walmart worked for years to develop Scan & Go, a feature that lets Sam’s Club customers ring up purchases on their smartphones while walking through the store, allowing them to avoid a checkout line.
It also notes that Walmart holds multiple patents protecting the intellectual property for the self-checkout feature, which debuted in 2016. Scan & Go has become more popular since the Covid-19 pandemic began in the U.S. in early 2020 as shoppers adopted social distancing and contactless checkout.
Walmart alleges its “innovations were simply taken without permission” by BJ’s, which launched its contactless offering, ExpressPay, in late 2021.
“Express Pay is an apparent copy of Sam’s Club’s Scan & Go, merely changing the in-app colors and changing the name from Scan & Go to Express Pay,” the lawsuit says.
As a result, the suit claims, BJ’s has infringed on Walmart’s patent rights, causing “significant damages and irreparable harm.”
The lawsuit was filed in a U.S. District Court in Orlando, Florida. Walmart and BJ’s both declined to comment on the suit, which was first reported by Bloomberg Law.
The legal action comes as warehouse clubs such as Sam’s Club, BJ’s and Costco have seen sales surge during the Covid pandemic, with Americans stockpiling large quantities of toilet paper and food, cooking more at home, and moving to homes in the suburbs with larger pantries.
Sam’s Club, which has served as a tech incubator for Walmart, has looked to technology as a competitive advantage against other retailers. It touted Scan & Go last month in its first-ever Super Bowl ad, which featured comedian and actor Kevin Hart.
Scan & Go is now available at Walmart locations, as a perk for shoppers who sign up for Walmart+, a subscription-based service that Walmart launched to deepen customer loyalty and better compete with Amazon Prime.
Sam’s Club does not disclose customer data, but Walmart said the retailer’s membership hit a record high in the fourth quarter.
Same-store sales at Sam’s Club grew 10.4% in the fourth quarter of 2021, compared with the year-ago period, excluding fuel.
That rate was nearly double the sales growth of Walmart’s U.S. same-store sales during the same period.
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