Deadline Approaching for SNAP Retailers to Pay EBT Equipment Costs, as Required by the Farm Bill

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Deadline Approaching for SNAP Retailers to Pay EBT Equipment Costs, as Required by the Farm Bill

WASHINGTON, Sept. 17, 2014 – As required by Congress in the Agricultural Act of 2014 (also known as the Farm Bill), retailers already authorized to accept USDA’s Supplemental Nutrition Assistance Program (SNAP) benefits must arrange and pay for their own Electronic Benefit Transfer (EBT) equipment, supplies, and related services. USDA officials are reminding retailers that they must take action by September 21 or risk being unable to accept and process SNAP benefits, or be charged for services by the processing vendor currently used by the state.

“EBT has transformed the way SNAP benefits are issued,” Agriculture Under Secretary Kevin Concannon said. “It has modernized SNAP transactions, saved taxpayer dollars, and improved the process for clients, retailers and state and federal administrators. We have been sending out reminders to retailers for the past six months, and we want to try to get the word out one more time to make sure that all SNAP retailers are aware that they must take action.”

In keeping with the Farm Bill, all SNAP retailers, with a few exceptions, must lease or purchase EBT equipment and services through their chosen service provider no later than the September 21 deadline. Retailers that already have equipment to process credit and debit cards may contact their current processor about adding EBT service to their existing equipment. Retailers who have not taken note of the information previously provided in mailings, via email, and via phone calls regarding this change may be surprised to receive bills from the state’s current EBT service provider or to find that existing equipment has stopped working.

Prior to this legislation, authorized retailers could receive free SNAP EBT equipment from their state. A small number of SNAP-authorized firms are exempt from these new requirements, including military commissaries, group living arrangements, non-profit food buying cooperatives, farmers markets and direct-marketing farmers, but the vast majority of retailers must obtain their own equipment and services by the deadline. More information about exempted retailers and options for non-exempt retailers is available at www.fns.usda.gov/snap/ebt. Retailers who need information about where to obtain EBT equipment and services can refer to the SNAP EBT Third Party Processor List.

Concannon emphasized that the change will not increase food costs for program participants. SNAP regulations continue to stipulate that the retailer costs of EBT equipment and services cannot be transferred to SNAP households. Retailers may not establish a minimum dollar amount for SNAP purchases or charge SNAP customers a fee, commonly called a transaction fee, for using their EBT benefits.

EBT has been used exclusively to distribute and use SNAP benefits since 2004, eliminating the cumbersome and costly process of issuing and redeeming paper food stamps. EBT was also a giant leap forward for the integrity of the program because it creates an electronic record of each transaction, making it easier to identify the illegal use of SNAP benefits known as trafficking.

Since the Farm Bill passed in March, USDA has worked to notify retailers directly through emails, direct mailings, phone calls to affected retailers and announcements on the Food and Nutrition Service’s website. USDA is continuing to work with partners, including the National Grocers Association, Food Marketing Institute, National Association of Convenience Stores and state retailer associations to help ensure that local retailers are able to serve their SNAP customers without interruption. States and their EBT vendors have also had significant communications with affected retailers offering options so that stores may continue to accept SNAP benefits if they choose, and machines will not be turned off without notice. Retailers needing more information should contact the Food and Nutrition Service at RPMDHQ-WEB@fns.usda.gov. SNAP customers looking for authorized retailers in their area can visit the SNAP Retailer Locator.

SNAP - the nation's first line of defense against hunger - helps put food on the table for millions of low income families and individuals every month. As the largest of USDA's 15 nutrition assistance programs, SNAP has never been more critical to the fight against hunger. SNAP is a vital supplement to the monthly food budget of more than 46 million low-income individuals. Nearly half of SNAP participants are children, nine percent are over 60 and more than 40 percent of recipients live in households with earnings.

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