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New Fees, Restrictions On SNAP Would Stifle Efforts To Help Food Insecure

Greg Ferrara

Last updated on August 16th, 2023 at 01:04 pm

The Supplemental Nutrition Assistance Program, commonly known as SNAP, is a public-private program that works as it was designed – to help feed the food insecure. 

And in many rural and urban areas, where independent community grocers often are the only convenient source of fresh groceries and other essential goods, SNAP has been an effective tool to ensure that folks who need help the most get fed.

However, proposals that would make it more difficult and costly for grocery retailers to serve SNAP customers would undermine the positive impact that the program is having on the folks who need it most.

Independent grocers historically operate under tight margins. Like the people in the communities they serve, they too face challenges of high costs of goods and services necessary for doing business, as well as fees for things such as processing credit card transactions.

That’s why NGA worked with U.S. Rep. Shontel Brown (D-Ohio) to introduce the Ensuring Fee-Free Benefit Transactions Act, a bill that would prohibit processing fees on electronic benefit transfer cards used by SNAP participants.

Independent grocers have made significant investments in software, equipment and training to provide SNAP benefits for their communities. That’s why we appreciate Brown’s cooperation in finding a permanent solution to prevent processing fees on SNAP transactions, which could result in limited access to SNAP for beneficiaries and negatively impact the retailers who are indispensable to the program.

Fees on EBT transactions would be cost prohibitive for many community and family-owned grocers that serve urban, rural and high-need areas. In addition to banning SNAP processing fees, this bill would ensure that retailers are responsible only for their own costs as USDA works to modernize EBT with chip cards and mobile payments. 

The modernization will increase costs for all participating parties – including the federal government, states, EBT processors and retailers – but each party must pay its share of the costs.

In the words of Aaron Saltzman, a fifth-generation grocer of family-owned and -operated Dave’s Markets in the greater Cleveland area: “We take on large expenses in order to meet the needs of our shoppers, whether they are a SNAP participant or otherwise. Placing additional costs by way of processing fees in the SNAP program onto the retailer would harm our ability to best serve our local communities.” 

As Congress works toward a new Farm Bill this year, Brown’s legislation would at last make permanent a temporary ban on SNAP processing fees included in the 2018 Farm Bill, which expires this year. 

Congress and the USDA have historically gone out of their way to ensure retailer participation in SNAP was incentivized. From the inception of EBT for SNAP, stores were protected from transaction fees and were provided with government-funded equipment, including installation and operation. 

In the 2014 Farm Bill, retailers chose to streamline the customer experience and integrate EBT payments with others, such as credit or debit. They agreed to cover all the associated costs to ensure the government did not underwrite the cost of commercial activity in stores. But the wording of the 2014 Farm Bill inadvertently left retailers open to new processing fees, a loophole temporarily closed in 2018.

It is critical that these fees are prohibited to ensure that SNAP retailers remain and are able to support their communities.

Meanwhile, additional legislation would imperil privacy for grocers and their customers.

U.S. Rep. Josh Brecheen (R-Oklahoma) and Sen. Marco Rubio (R-Florida) have introduced the “Healthy SNAP Act,” which would turn SNAP into a WIC-like program and require data reporting from retailers. 

Such a requirement would turn grocers into the food police, forcing retailers to disregard their own privacy as well as that of their customers. These changes would add administrative burdens for retailers and frustrations for customers. There’s a pilot for these provisions in the 2024 House Appropriations bill.

Rather than creating any meaningful public health improvements, restricting SNAP choice would end up increasing costs for businesses – as well as the government – and reduce the flexibility that has made SNAP such a successful program. In addition, USDA already receives data from third-party data collecting agencies.

NGA looks forward to working with policymakers and helping them better understand the realities of doing business, SNAP’s successful role in boosting food access to Americans in need and the challenges independent grocers face. 

NGA encourages independent retailers to remind their representatives in Congress how important local grocers are to the health and success of their communities. For more information on how to get involved, visit www.nationalgrocers.org/government-relations/action-center. 

About the author

Greg Ferrara

President and CEO of NGA

Greg Ferrara is the President and CEO of NGA. The National Grocers Association is the trade association representing the U.S. independent community supermarket industry. NGA members include retail and wholesale grocers located in every congressional district across the country, as well as state grocers’ associations, manufacturers and service suppliers.

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