Snap Violations 101

By Carmen Vizaino
Partner Wahid Vizcaino LLP.

SNAP (Supplemental Nutrition Assistance Program), also known as Food stamps, are a staple of income for many retail stores.  These stores are generally located in under serviced areas. In most cases, the acceptance of SNAP benefits is part of the store’s business model. The store not only relies on the income from customers purchasing SNAP items, but while shopping, those customers will use their cash to purchase non-SNAP benefit products. 

This is why when served by the Federal government with a complaint of a violation, it is imperative that it is dealt with quickly. There many types of violations which can result in anything from fines, suspension of your privilege to accept SNAP benefits, to permanent disqualification of that privilege and disbarment. They can even lead to criminal liability.  This can be detrimental to a business.   

There are different types of violations for which a store can sanctioned, trafficking of food stamps being one of the most serious.  Careless or unscrupulous employees can have a detrimental effect on your business as the owner can be held vicariously liable for the actions of the employee.

One of the most common violations is using SNAP benefits for something that is not eligible. At times this is obvious, for example if an EBT (Electronic Benefit Transfer) card is used to purchase alcohol or cigarettes. But sometimes it’s not so clear, as with non-eligible food items, such as prepared food or hot food.  Receipts for EBT purchases are strictly scrutinized by the USDA. There are certain things that send up a red flag. A purchase of a rotisserie chicken on an EBT card can put a business in peril.

The violations which are deemed to be most serious by the USDA are what are referred to as IPV (Intentional Program Violations) such as fraud. But understand, just because the retail owner does not believe fraud was involved does not mean the USDA cannot suspect fraud and allege it in the complaint.

The two biggest mistakes by retailers is not properly training their employees and ignoring a letter of violation when it is received. There are many gray areas which can be confusing to employees as to when to accept SNAP benefits from a customer.  Clear training and proof of such a training can help if a retailer is ever served with a violation.  If a retailer is served with a violation it is imperative to deal with these early and attempt to resolve the matter.  If it is not resolved at the first level, the appeal is done to the USDA themselves.  As you can imagine, asking the USDA to overturn a decision previously made by the USDA is not easy.  If the retailer does not prevail at the appellate level within the USDA, the only remedy left is filing a federal law suit against them. 

A federal lawsuit against the USDA is very costly and could result in additional fines and attorney costs.  Many retailers believe that they can sell their business in an attempt to mitigate the financial damages that they are suffering due to a suspension by the USDA. This is not a viable answer. The selling of a business while it is pending a suspension in and of itself is a violation and can result in significant fines. These are complex issues and the federal regulations are vast and can be confusing. Please contact us if you are served with any violation of SNAP benefits or if you wish to set up an employee training session.