The push by recipients of the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, to shop online has been hailed by anti-hunger campaigners as a win-win solution to food insecurity. Locally, one household in 10 does not have regular access to healthy and affordable food.
Supermarkets, they say, will provide greater convenience and access to healthier foods while reducing stigma by providing the same customer checkout experiences as non-SNAP consumers.
But trying to keep pace with stores like Walmart and Amazon, which already offer SNAP shopping online, will weigh heavily on the hundreds of less tech-savvy neighborhood convenience stores and bodegas, often one of the only grocery providers in the low-income areas.
The USDA Food and Nutrition Service (FNS), the federal agency that administers SNAP, has run its online shopping pilot program since 2017, starting with seven states. Due to COVID, the pilot was quickly expanded and is now in 48 states. ALDI, Walmart and BJ’s Wholesale Club are among the stores offering the online shopping service in both states.
However, the USDA recognizes that small store owners will face serious technical and financial barriers when trying to meet online shopping approval requirements and may be at a competitive disadvantage because they do not do not have the necessary e-commerce infrastructure.
In May, the USDA FNS reported that three million SNAP households had purchased online that month, up from 35,000 two years earlier.
“I think it’s a good idea. The first people that come to mind are mothers with newborns who could order things and not have to leave the house,” said Obed Borrayes, owner of Esperanza Grocery Store in Camden, New Jersey. , for seven years and is a member of La Asociación de Empresarios Unidos.
“And it’s very important for small businesses to keep advancing with technology and not fall behind,” added La Asociación President Franklin Hernandez, owner of Luz Supermarket in Pennsauken, New Jersey.
To add online capacity, grocers, even those already authorized to accept SNAP for in-store purchases, will need to follow a separate application process. They will also have to make significant changes to their websites.
“Local convenience stores, most of them are not very sophisticated and don’t have the inventory management and control systems that will be needed [for online retailing]“said Michael Fienman, a Philadelphia attorney who specializes in helping small grocery store owners deal with charges of SNAP retailer violations. not even websites,” Fienman said.
Additionally, they will need to contract with a third-party processor to encrypt the Electronic Benefits Transfer (EBT) personal identification number (PIN) – the debit card used by SNAP recipients – as well as to provide secure processing. transactions and certify and test changes to their online shopping site.
That’s a daunting list for the average bodega or convenience store owner. Fienman added that the difficulties are compounded because most relevant information is only available in English.
“It doesn’t seem discriminatory at first glance,” Fienman said, “but when you look at the owner and operators of these stores, many are immigrants and English is their second language. It becomes clear that they don’t lack the ability to read and understand the rules and regulations Often, in my practice, I am in contact with the children of the owners or with their accountants who have the language skills.
“They can’t navigate the system to request to be food stamps [retailer]. They have to pay an accountant to do it,” agreed Somaly Osteen, program manager for the Asian American Chamber of Commerce. Osteen works with Asian traders, many of them from Cambodia, in southeast Philadelphia.
And online shopping would be prone to technical issues that could seriously harm small grocers.
A nationwide issue on Sunday not only left 1.8 million Pennsylvanians locked out of their benefits, but 1,609 local stores unable to accept EBT purchases for hours. “There have been outages before, but usually only for an hour,” said state Rep. Danilo Burgos. “I have never seen such a long outage and the USDA has not contacted anyone.” In 1994, Burgos, a former bodega owner, co-founded the Dominican Grocers Association of Philadelphia. Burgos said some owners are allowing customers to pick up the products and pay after EBT is reinstated.
This summer, the USDA FNS announced a competitive $5 million grant for an organization to help independent retailers and grocers expand their use of online shopping. The winner will be announced in the fall.
SNAP is the nation’s largest public-private partnership, with the government providing about $70 billion a year to 41 million people. Due to the pandemic, the average monthly benefit is now $218, down from $130 per person previously.
Large supermarkets like Walmart redeem $8 of every $10 spent on SNAP.
About 80% of the 250,000 licensed retailers are small stores, many of which must provide EBT services because their customer base relies heavily on SNAP. According to Information Resources Inc., 12% of all food and beverage sales in 2020 (excluding bakery, produce and deli) were SNAP sales, which total $74 billion.
Osteen estimated that EBT expenses, which are limited to the purchase of approved food products such as meat, dairy, vegetables and fruits, represent at least 30% to 40% of a small grocer’s bottom line. . Losing their SNAP customer base would be a fatal economic blow for small stores.
“Without accepting SNAP EBT, I might be able to keep the store running, but the business would be very different. Too many customers rely on EBT,” Hernandez said, adding that when stores lose the ability to accept SNAP EBT, most owners close the business. .
Borrayes explained that SNAP customers would only buy items from a non-EBT-accepting store that they “really, really need and can’t go anywhere else to buy them.” Otherwise, they would go elsewhere.
“A store without EBT, a customer will just walk to the next store that accepts EBT,” Osteen agreed.
“Basically you have to work more hours because EBT is paying a worker,” added Jonathan Hernandez, co-owner of Junior Supermarket in Camden.
USDA’s FNS issues retailer approvals, investigates violations, and enforces penalties. According to the latest statistics, the USDA FNS permanently disqualified nearly 1,600 SNAP retailers in fiscal year 2021 for violations, the majority of which are small businesses.
A year ago, the USDA FNS announced that 28 Philadelphia retailers were suspected of violating the rules, including 11 that sold items not eligible to an undercover officer.
SNAP payment technology has come a long way from the blue and orange paper stamp books that gave the program its original name.
When President Lyndon B. Johnson signed the Food Stamp Act in late August 1964, he made what was a pilot program a permanent part of his plan to fight poverty. “As a permanent program, the food stamp scheme will be one of our most valuable weapons in the war on poverty,” Johnson predicted.
The next payment innovations were the EBT cards which were first tested in Reading, Pennsylvania in 1984 and ushered in the digital age.
Now, the USDA FNS is planning a mobile payment pilot that would allow SNAP participants to use a mobile device to make SNAP purchases.
2022 The Philadelphia Investigator
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