Another day, another glitch.
Target has reportedly fired hundreds of employees at a distribution center in Chicago after an internal investigation revealed that workers had exploited a glitch in the company’s healthcare loan program.
The fraud apparently cost Target about $1.3 million according to reports.
Employees Took Advantage Of “Glitch” In Targets Medical Loan Benefit
The scheme apparently began in late July and early August 2025 and it involved Target’s medical loan benefit that allowed employees to borrow $3,000 for healthcare expenses, then have the balance erased after repaying just $50.
The program that was exploited was Target’s Healthcare Flexible Spending Account Program. The program gives employees $3,000 to spend on medical costs and pay it back with deductions from each paycheck.
The loophole was reportedly identified by a single employee and quickly spread through the 1.3 million square foot facility at 3501 S Pulaski Road.
The “glitch” that was exploited was a technical error allowing workers to pay back $50 of the loan and have the remaining balance erased from company records Target didn’t find out about the scale of exploitation until it triggered some of their internal controls.
A Ringleader Charged Other Employees To Help Them
Unlike social media glitches that spread rapidly on Tik Tok or Instagram, this glitch spread by word of mouth by a “ringleader”
According to current and former workers who spoke to the news, one employee discovered the glitch and charged other employees fees of between $200 and $300 to help facilitate the fraudulent loans for them.
After Target identified the scheme, they began firing employees. Employees were unsure of how many people were fired, but estimates range from 400 to 700 terminations over a two-week period.
According to a Reddit post on Targets channel, the glitch may have spread outside of Chicago to Savanah and Hampton, however there is no indication that is actually the case yet.
The Empty Warehouse, Now Target Is Rushing To Recruit
Apparently so many employees were fired at the facility that they don’t have enough workers.
In speaking to BlockClubChicago, one employee said the warehouse is not the same.
“It has felt weirdly empty in here,” said a newly hired employee after clocking out of his second shift at the facility. “They’re hiring tons of employees right now. It feels like everyone’s new.”
Last week Target began a substantial hiring push at the warehouse to replace the workers fired, according to reports from employees and the spokesperson for Target.
Employees Deny It Was Fraud
The mass terminations have left some former employees claiming that they were unaware that they were comitting any fraud.
Several workers told WGN news they believed that they were using a legitimate benefit with some showing their paystubs indicating regular FSA payment deductions from their payroll.
“I literally do it every year. Nothing never happened. So now, this year, all of a sudden, this is a fraudulent scheme. It doesn’t make sense to me,” one terminated employee told WGN, displaying documentation of $2,400 in deductions for the year.
