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USDA To Explore Stricter SNAP Retailer Requirements

Audit finds most SNAP trafficking occurs in smaller size stores

Published on: Aug 16, 2013

More Supplemental Nutrition Assistance benefit trafficking – the illegal sale of SNAP benefits for cash or other ineligible items – is occurring in smaller-sized retailers stocking fewer healthy foods, a USDA audit, released Thursday, found.

The report indicates that not only does more trafficking occur in smaller stores, smaller stores have accounted for a vast majority of the 40% growth in the number of SNAP-authorized stores in the last year.

That presents a fraud concern, according to USDA Undersecretary for Food, Nutrition and Consumer Services Kevin Concannon, because the rate of trafficking in small stores is 1.3%, compared to 0.5% at larger grocers. Smaller retailers also accounted for 85% of all trafficking redemptions.

Audit finds most SNAP trafficking occurs in smaller size stores
Audit finds most SNAP trafficking occurs in smaller size stores

"More than any other factor, we know that the change in the trafficking rate is being driven by the growth in the number of smaller retailers where trafficking occurs at ten times the rate of larger grocery stores and supermarkets," Concannon said.

He explained that in response to the findings, USDA plans to gather public opinion on establishing stricter requirements for stores to stock more items before receiving SNAP certification.  The move will identify and exclude "bad actors" within the SNAP program, he said, while encouraging purchases of healthier foods.

Also Thursday, Concannon announced a final rule that gives states the power to require SNAP recipients to make contact with the state when there have been an excessive number of requests for EBT card replacements in a year.

Requesting excessive replacement cards can indicate that a client is exchanging SNAP cards for cash or other ineligible items, USDA said. The rule will provide states the opportunity to determine whether the request is legitimate, or requires further investigation.

Though the new efforts reflect ways to eliminate fraud and abuse, Concannon said SNAP has one of the lowest fraud rates for Federal programs. USDA reports a decline from about 4% trafficking fraud to 1% over the last 15 years.