The problem I have with purchasing bikes from Wal-Mart and Target is more with the poor and unsafe condition of many bikes on their shelves. I know this from first hand experience. This is not always the fault of the bike, but of the assembler. I know how to make the bike's brakes, etc. safe, but the average BSO purchaser probably won't.

My son received a Target Schwinn for Christmas, a 24" Schwinn Ranger mountain bike. He is a tall 9-year-old and is growing quickly, so it makes sense to wait on purchasing a better bike for him until he has progressed through his growth spurt. He received the bike in surprisingly poor operating condition. The brakes were set up completely wrong and would've failed him if he had to stop quickly. The derailleurs were also set up wrong. Those were easy fixes that made the bike easier and safer to ride. The big problem I found with the bike was a lack of lubrication in the rear wheel. The bearings were dry and noisy, and the DNP freewheel lacked lubrication. The freewheel made a rather loud noise, and I'm not talking about the tick tick sounds, either. I was able to grease and adjust the rear bearings, and used Chain-L to lubricate the DNP freewheel. (There was enough play in the DNP freewheel that the Chain-L easily drained down into the gap of the freewheel, quieting the strange noise nicely.)

With one afternoon of inspection and work, my son's Target Schwinn was made ready for my son's first ride. I would never have put my son on the bike without my insuring it would work for him. My own Schwinn, an LBS one, came ready to ride. It does have better components, but my son doesn't need the better components. He has no trouble riding on 10 mile rides with me. The main difference between the two bikes was that the LBS mechanic knew how to set up my bike, while the Target employee who set up my son's bike should never set up another bike. The same seems to hold true for many dept. store bike displays in my area.