Agriculture Undersecretary for Food, Nutrition and Consumer Services Kevin Concannon recently released a report that examines the trafficking rate in the Supplemental Nutrition Assistance Program (SNAP) and better pinpoints where the vast majority of SNAP trafficking occurs—smaller stores that typically offer minimal access to the healthier foods encouraged by the Dietary Guidelines for Americans. In response, the U.S. Department of Agriculture (USDA) will begin gathering public input on establishing stricter “depth of stock” requirements for SNAP retailers in order to discourage bad actors from entering and abusing the program. This move also supports USDA’s continuing efforts to improve SNAP recipients’ access to healthy foods.
The report indicates that the vast majority of trafficking – the illegal sale of SNAP benefits for cash or other ineligible items – occurs in smaller-sized retailers that typically stock fewer healthy foods. Over the last five fiscal years, the number of retailers authorized to participate in SNAP has grown by over 40 percent; small- and medium-sized retailers account for the vast majority of that growth. The rate of trafficking in larger grocery stores and supermarkets—where 82 percent of all benefits were redeemed—remained low at less than 0.5 percent.
While the overall trafficking rate has remained relatively steady at approximately one cent on the dollar, the report attributes the change in the rate to 1.3 percent primarily to the growth in small- and medium-sized retailers authorized to accept SNAP that may not provide sufficient healthful offerings to recipients. These retailers accounted for 85 percent of all trafficking redemptions. This finding echoes a Government Accountability Office (GAO) report that suggested minimal stocking requirements in SNAP may contribute to corrupt retailers entering the program.
“USDA has a zero tolerance policy on fraud, and we continue to strengthen our anti-fraud tactics to identify and exclude bad actors. 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,” said Concannon. “And while the vast majority of retailers and participants are honest, exploring enhanced retailer requirements reaffirms our commitment to ensuring that everyone plays by the rules.”
In order to begin the process of establishing stricter retailer stocking requirements, USDA will be publishing a Request for Information (RFI) in the Federal Register to solicit feedback from stakeholders and the public.
USDA also finalized a rule that will provide states the option 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. The rule will provide states the opportunity to determine whether the request is legitimate, or requires further investigation.
“Eliminating waste, fraud and abuse is a shared responsibility between the federal government and the states that administer SNAP,” said Concannon. “This new rule better safeguards the taxpayer investment in this critical nutrition program by providing states with additional tools to investigate potentially fraudulent behavior.”
SNAP continues to have one of the lowest fraud rates for Federal programs. Over the past several years, USDA has taken steps to improve SNAP oversight through its SNAP Stewardship Solutions Project. USDA has seen declines in the rate of trafficking from four percent down to about one percent of benefits over the last 15 years. While fraud is rare in SNAP, no amount is acceptable, and it will not be tolerated. USDA continues to crack down on individuals who violate the program and misuse taxpayer dollars by: