Nothing's too good for a Giant customer. But what about the shareholders?
The company's 4,000 stockholders got quite a surprise yesterday when they received their regular quarterly dividend checks - they were 10 times larger than expected. Instead of 25 cents a share, the checks amounted to $2.50 a share.
For Giant Food and the National Bank of Washington, which disbursed the payments, it all added up to a $10 million mistake.
"Naturally we're upset," said Barry Scher, director of public relations for Giant Food Inc. "But errors happen."
The problem began Thursday at the National Bank of Washington. The staff was rushing to get the checks out on time, and no one spotted the error. Is wasn't until the next morning that they realized something was wrong: They mailed $11 million in dividends instead of $1.1 million.
The bank immediately stopped payment on all the checks and issued new ones to all shareholders.
In addition, notices are being run in today's Washington Post, Washington Star and Baltimore Sun and on local radio stations explaining what happened and asking Giant stockholders to return the checks.
"We have called every bank in the area to let them know and to alert the tellers," said Barbara Smith, an assistant trust officer at National Bank of Washington.
According to Smith, all share-holders should receive their replacement checks by Monday. "We're doing the best we can," she said.
Following a 3-for-2 stock split in May, Giant raised its dividend from 20 to 25 cents a share this quarter. "They knew they had more shares and they knew they were getting an increase," said Giant senior vice president for finance David Sykes, "But they didn't know it would be that much."
Sykes said that he expects the bank to tighten up its controls but he added that, "our relationship goes back too far and is too strong for this to affect it."