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Electronic Purchases and SNAP

Updated January 27, 2020
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Jennifer Folliard

SDSU Extension Family & Community Health Field Specialist

“SNAP” stands for Supplemental Nutrition Assistance Program, a federal program administered by the United States Department of Agriculture’s Food and Nutrition Services (FNS) in collaboration with state agencies of Social Services or Children and Family Services. The purpose of SNAP is to supplement the income of low- and no-income families and individuals so they are able to obtain nutritious foods. Beneficiaries utilize their SNAP benefits through swiping a SNAP electronic benefit transfer (EBT) card at participating retailer’s point-of-sale (POS) device. Providing SNAP benefits at your farmers market expands the number of customers you are able to reach.

Utilizing SNAP Benefits in a Market-Operated System

Step One: Define and Determine Eligibility

A market-operated SNAP system is the most common way that farmers markets accept SNAP benefits. A farmers market is defined as “two or more farmer-producers that sell their own agriculture products directly to the general public at a fixed location.” In order to provide this service, the farmers market must first confirm eligibility. Eligibility is based on if the market sells eligible food items and meets one of the two criteria: Criterion one states that half or more of total gross retail sales must come from the sale of eligible staple foods such as meat, poultry, fish, bread, cereal, vegetables, fruits, and dairy products. Criterion two states that seven varieties of foods within the four staple food groups categories of 1) meat, poultry, fish 2) bread or cereal 3) vegetables or fruits 4) dairy products must be continuously sold.

Step Two: Apply and Purchase

Once eligibility is confirmed, the market must apply to FNS to become a SNAP retailer. Market organizations that run multiple markets must apply for separate FNS authorizations. The application process includes selecting a responsible official who must provide their Social Security Number, gather relevant information and documents, and complete an online application. The application process takes approximately 45 days. Once approved, the farmers market must establish a bank account and obtain a POS device, which is utilized at a central location on behalf of all its vendors selling SNAP-eligible items. Many POS devices exist, some accepting only SNAP EBT cards and others accepting SNAP EBT, debit, and credit cards. Costs and fees related to the equipment are initial responsibilities of the market, unless vendors are required to contribute through vendor fees or other fees set by the market head.

Step Three: Determine and Understand the Sales System

Administering SNAP sales must be initially determined by the market and can be done one of two ways, through market currency or a receipt system. The market currency system utilizes “tokens” or “scrips”. The customer must charge their EBT card the desired amount prior to shopping and is then provided with a comparable token or script amount that they may spend at desired vendors. The receipt system is different in that it requires the customer to pick desired items for purchase and have the vendor fill out a receipt for the total sale. While the vendor holds the items, the customer must bring the vendor’s receipt to the central POS device where their SNAP EBT card will be swiped for the amount indicated. The customer receives a sales receipt and is then able to obtain their food items. After a market day, tokens, paper scripts, and vendor receipts are returned to the market head for reimbursement. Reimbursement is scheduled and is not immediate; therefore, vendors must wait a week or longer before receiving their reimbursement.

Step Four: Eligible Food Items

SNAP-eligible foods allowed for sale at farmers markets are fruits and vegetables, breads and cereals, meats, fish, and poultry, dairy products, and seeds and plants that produce food. Items such as alcoholic beverages, tobacco, ready-to-eat hot food or food products, vitamins or medication, and other nonfood items are not eligible.

Utilizing SNAP Benefits in a Vendor-Operated System

Step One: Define and Determine Eligibility

A vendor-operated SNAP system is different from a market operated system because it focuses on each vendor independently. This means that each vendor is responsible for understanding and complying with SNAP regulations. In order for an individual vendor to provide this service, they must first confirm eligibility. Eligibility is based on if the market sells eligible food items and meets one of two criteria: Criterion one states that half or more of total gross retail sales must come from the sale of eligible staple foods such as meat, poultry, fish, bread, cereal, vegetables, fruits, and dairy products. Criterion two states that seven varieties of foods within the four staple food groups categories of 1) meat, poultry, fish 2) bread or cereal 3) vegetables or fruits 4) dairy products must be continuously sold.

Step Two: Apply and Purchase

Once eligibility is confirmed, the vendor must independently apply to the FNS as a “direct marketing farmer”. According to the USDA FNS, direct marketing farmers sell their products directly to the general public. The application process includes identification of the responsible official with a Social Security Number, gathering relevant information and documents, and completing an online application. The application process takes approximately 45 days. Once approved, each vendor is responsible for establishing a bank account and obtaining their own POS device to accept SNAP benefits. Each vendor is also responsible for relevant equipment costs and fees.

Step Three: Determine and Understand the Sales System

SNAP beneficiaries will provide the vendor with their SNAP EBT card, which will be swiped at the vendors personal POS device. This process will transfer funds from the customers SNAP account directly to the vendor’s bank account that is tied to the POS device. Once the transaction is complete, the vendor will provide the customer will receipt.

Step Four: Eligible Food Items

SNAP-eligible foods allowed for sale are fruits and vegetables, breads and cereals, meats, fish, and poultry, dairy products, and seeds and plants that produce food. Items such as alcoholic beverages, tobacco, ready-to-eat hot food or food products, vitamins or medication, and other nonfood items are not eligible.

References:

  1. Legal Considerations for Implementing SNAP/EBT, Center for Agriculture & Food Systems.

Related Topics

Farmers Market Operation