Macy’s Employee Hid $132M-$154M: Shocking Scandal
Imagine working at a retail giant like Macy’s, where the hustle and bustle of the holiday season is in full swing. Customers are rushing through the aisles, and the iconic Herald Square store is decked out for Christmas. Behind the scenes, though, a storm was brewing—one that nobody saw coming. In late 2024, Macy’s dropped a bombshell: a single employee had hidden between $132 million and $154 million in delivery expenses over three years, forcing the company to delay its quarterly earnings report. This wasn’t just a small accounting error; it was a deliberate act that sent shockwaves through the retail world.
As someone who’s spent years diving into corporate scandals and financial missteps, I couldn’t believe the scale of this deception at first. How could one person pull this off under the nose of a company as big as Macy’s? In this article, we’ll unpack the details of this jaw-dropping scandal, explore how it happened, and discuss what it means for Macy’s and the retail industry. We’ll also look at the broader implications of such financial misconduct and how companies can prevent it. Let’s dive in.
What Happened at Macy’s?
In November 2024, Macy’s announced that an employee in its accounting department had intentionally misclassified delivery expenses, concealing a staggering $132 million to $154 million between the fourth quarter of 2021 and November 2, 2024. This wasn’t a case of misplaced decimals or a clerical error—it was a calculated effort to hide costs related to small package deliveries. The discovery forced Macy’s to delay its third-quarter earnings report, originally scheduled for November 26, 2024, as the company scrambled to investigate.
According to reports, the employee, who is no longer with Macy’s, worked in the small package delivery expense accounting department. They manipulated accrual entries—accounting records that recognize expenses before they’re paid—to obscure these costs. Over three years, this added up to a massive sum, though it was only a fraction of the $4.36 billion in delivery expenses Macy’s incurred during that period. The company emphasized that the misconduct didn’t affect cash flow, inventory, or vendor payments, but the damage to its reputation and investor confidence was undeniable.
Macy’s CEO, Tony Spring, addressed the issue, saying, “At Macy’s, Inc., we promote a culture of ethical conduct. While we work diligently to complete the investigation as soon as practicable and ensure this matter is handled appropriately, our colleagues across the company are focused on serving our customers and executing our strategy for a successful holiday season.” But the question remains: how did this go unnoticed for so long?
How Could One Employee Hide Millions?
You might be wondering, as I did, how a single person could hide such a massive amount of money in a company with thousands of employees and sophisticated financial systems. From my experience analyzing corporate fraud, it often comes down to two things: opportunity and weak oversight. Let’s break it down.
Weak Internal Controls
Macy’s is a Fortune 500 company, which makes this scandal even more surprising. Large corporations typically have robust internal controls—checks and balances to prevent errors or fraud. However, posts on platforms like Reddit’s r/Accounting suggest that Macy’s may have had a gap in its oversight. One user speculated that the employee could have been solely responsible for the delivery expense account, providing their own documentation and signing off on its accuracy without anyone double-checking.
In my own experience working with businesses, I’ve seen how easy it is for things to slip through the cracks when one person has too much control over a single account. If Macy’s didn’t have regular balance sheet reviews or independent audits of this specific account, the employee could have manipulated numbers without raising red flags. It’s like letting one person guard the cookie jar and trusting them not to sneak a few.
The Motive Mystery
The bigger question is why. Why would an employee go to such lengths to hide expenses? Some online discussions suggest the employee might have been pressured by management to make financials look better, perhaps to meet Wall Street expectations or secure bonuses. Others speculate more nefarious motives, like setting up shell companies to siphon funds, similar to past corporate scandals.
I’ve seen cases where employees fudge numbers to cover up mistakes, hoping to “fix” them later. But “later” never comes, and the problem snowballs. Without concrete evidence, we can only guess at the motive, but the fact that Macy’s found no other employees involved suggests this was a lone actor—making the scale of the deception even more astonishing.
The Impact on Macy’s
The timing of this scandal couldn’t have been worse. Macy’s was already navigating a tough retail landscape. Preliminary earnings for the third quarter of 2024 showed a 2.4% drop in sales to $4.74 billion, slightly below Wall Street’s expectations of $4.77 billion. The company has been struggling with declining consumer spending, with CEO Tony Spring noting in August that even affluent customers were cutting back.
The hidden expenses, while only 3.5% of Macy’s total delivery costs over three years, cast a shadow over the company’s credibility. Investors reacted swiftly, with Macy’s shares dropping 3-4% in premarket trading after the announcement. For a company already under pressure to restructure—planning to close 150 stores by 2027—this was a public relations nightmare.
On the flip side, some analysts, like Morningstar’s David Swartz, downplayed the financial impact, noting that $50 million a year in hidden expenses is less than 1% of Macy’s annual operating expenses. Still, the scandal raised questions about Macy’s internal controls and whether other issues might be lurking.
Lessons from the Scandal
As someone who’s studied corporate governance, I can’t help but see this as a wake-up call for retailers and businesses everywhere. Here are some key takeaways:
1. Strengthen Internal Controls
This scandal highlights the importance of segregation of duties—ensuring no single employee has unchecked control over financial accounts. Regular audits, independent reviews, and cross-departmental checks could have caught this issue sooner. If I were advising Macy’s, I’d recommend a top-to-bottom review of their accounting processes to prevent a repeat.
2. Foster a Culture of Transparency
Macy’s prides itself on ethical conduct, but a culture of transparency means more than just words. Employees should feel safe reporting discrepancies without fear of retaliation. In my consulting work, I’ve seen companies thrive when they empower staff to speak up about potential issues.
3. Leverage Technology
Modern accounting software can flag unusual patterns in real time. If Macy’s had invested in AI-driven analytics, they might have spotted the erroneous entries before they ballooned to $154 million. Technology isn’t foolproof, but it’s a powerful tool for catching human error—or intentional fraud.
What’s Next for Macy’s?
Macy’s has taken steps to address the issue. The employee was terminated, and an independent forensic investigation is underway to ensure no other irregularities exist. The company plans to release its full third-quarter earnings by December 11, 2024, along with its outlook for the holiday season.
Despite the scandal, Macy’s is pushing forward with its holiday strategy. The company’s other brands, Bloomingdale’s and Bluemercury, showed stronger performance, with net sales up 1.4% and 3.2%, respectively. CEO Tony Spring remains optimistic, noting that November sales were trending better than the third quarter.
Still, the retail giant faces an uphill battle. With plans to shrink to 350 stores—nearly half its pre-pandemic footprint—Macy’s is betting on a leaner, more focused operation. The scandal, while not catastrophic, underscores the need for tighter financial oversight as the company navigates this transformation.
A Personal Reflection
When I first read about this scandal, I was reminded of a time early in my career when I worked with a small business that discovered a bookkeeper had been skimming funds. The amounts were much smaller—thousands, not millions—but the betrayal felt personal. Employees are trusted to act in the company’s best interest, and when that trust is broken, it shakes everyone. I can only imagine the shockwaves at Macy’s, where thousands of employees work hard to keep the brand alive.
What struck me most about this case was the audacity. Hiding $154 million isn’t a small feat—it requires planning, confidence, and a belief you won’t get caught. It’s a stark reminder that no company, no matter how big, is immune to human error or malice.
Why This Matters to You
If you’re a shopper, investor, or just someone who loves a good corporate drama, this story has something for everyone. For customers, it’s a reminder that the stores we love are complex businesses with hidden challenges. For investors, it’s a cautionary tale about the importance of due diligence. And for anyone in finance or retail, it’s a call to action to tighten controls and stay vigilant.
The Macy’s scandal also reflects broader trends in retail. As companies face pressure to cut costs and compete with e-commerce giants like Amazon, some may take shortcuts or overlook red flags. This story is a warning: cutting corners can cost you more than you save.
Conclusion
The Macy’s expense scandal is a wild tale of deception, weak oversight, and corporate resilience. A single employee managed to hide up to $154 million in delivery expenses, delaying a critical earnings report and exposing cracks in Macy’s financial controls. While the company insists the misconduct didn’t affect its cash flow or operations, the reputational hit is real.
As Macy’s moves forward, it’s clear they need to tighten their processes and rebuild trust. For the rest of us, it’s a fascinating glimpse into the world of corporate finance—and a reminder that even the biggest brands can stumble. Whether you’re a Macy’s shopper or just here for the drama, this story is a lesson in accountability, transparency, and the power of one person to make a massive impact—for better or worse.
What do you think about this scandal? Have you ever encountered a financial misstep in your own workplace? Let’s keep the conversation going.
