Benefits of Being an EBT/SNAP Retailer
A merchant that accepts EBT or SNAP point of sale purchases can help give their customers more options to pay. But beyond the benefit to the customer, there are many benefits to becoming an EBT retailer. You’ll have to be approved and accepted into the U.S. Department of Agriculture’s Food and Nutrition Service (USDA FNS), but once you’re accepted you’ll be able to install EBT and SNAP processing equipment that will enable you to accept food stamps at the point of sale.
It’s the FNS that accepts qualified stores and retailers into the program, and it’s true that you won’t be able to accept EBT payments unless you are admitted into the program following a lengthy approval process. Certain partners, such as the experts here at Velocity Merchant Services, can help you before, during and after the application process, allowing you to focus more on your business rather than the technicalities of the EBT retailer application process.
However, even if you’ve been admitted as an EBT retailer, you must still follow the rules outlined in the program in order to maintain your standing. If you fail to follow the program rules, you will no longer be able to accept SNAP point of sale payments or to conduct any EBT transactions. You might get off with just a warning, but repeat offenders may need to voluntarily withdraw or be disqualified from accepting EBT payments altogether.
EBT and SNAP Point of Sale Benefits
For any customer that has a plastic EBT card to help them pay for groceries and other goods, that can represent another source of revenue for retailers that want to broaden their customer base. Furthermore, you may already have EBT card-carrying participants that shop at your stores, and offering another way to pay can help increase your revenue and allow you to earn more with each transaction.
Just like other types of card transactions where funds are approved and held for an amount of time before being deposited into your account, EBT and SNAP point of sale payments work in much the same way. Simply allow the customer to swipe their EBT card and your EBT and SNAP processing equipment will do the rest, resulting in the money being deposited into your account within two business days. This can help benefit your store while also helping to provide a discreet option to customers that have federal assistance benefits to spend.
What Is the Difference Between EBT and SNAP?
They’re often used interchangeably, but EBT and SNAP are technically not one and the same.
SNAP is an acronym for the government’s Supplemental Nutrition Assistance Program, which is a federal nutrition program that helps participating individuals purchase food. The program used to be called food stamps, which references the little pieces of paper that were used as coupons when purchasing food at qualifying retailers years ago.
EBT stands for Electronic Benefits Transfer and is not a cash assistance program. Instead, funds are loaded on the card — such as SNAP benefits — and the individual can then use their EBT card to purchase goods. The benefit for customers is that they are able to use a card like the majority of buyers that are purchasing items outright. If they happen to be at a store that accepts EBT payments, they can conveniently use their EBT card.
By accepting EBT cards, your business benefits by allowing you to reach a wider range of customers, as well as increasing the ability of your customers to pay you via different payment methods. That can help increase your cash flow while also reducing the wait time during checkout, helping your customers and giving you the ability to serve more clients in a given period of time.
The best part is that as word spreads, you’ll get even more customers that have EBT funds to spend.
EBT and SNAP Store Eligibility Requirements
Businesses that have been approved as an EBT retailer can start to realize the benefits of accepting EBT and SNAP point of sale transactions immediately. However, if you’re not already approved as an EBT retailer, you’ll need to meet certain requirements and apply via the USDA’s FNS program. You’ll also have to apply separately for each business, though chains with more than 10 businesses have a slightly different process. Keep in mind that you can’t take over someone else’s SNAP permit, even if you buy their business, because the permit is required to be in the names of the managers and partners of the business.
One requirement for businesses interested in a SNAP permit is that you’ll have to sell a variety of food staples in four different categories. That includes dairy products; breads, grains and cereals; fruits and vegetables; and meat, fish and poultry. Note that the foods you sell can be fresh, frozen or canned, though you must stock perishable foods in at least two of the four categories.
Alternatively, you can obtain a SNAP permit if at least half or more of your gross retail sales comes from the sale of one or more staple foods in the four main types.
That said, your business may be able to qualify for EBT or SNAP point of sale transactions even without meeting the requirements above if your store is in an area where SNAP consumers have limited access to food. This level of eligibility is known as “need for access.”
Another eligibility consideration includes restaurants that sell at least 50 percent hot or cold foods that are for immediate consumption. However, note that most restaurants are not able to accept EBT or SNAP point of sale transactions.
The final eligibility consideration has to do with multiple businesses at the same location. These are known as co-location businesses and the FNS may treat them as one entity when determining eligibility.
Following the Food Stamp Point of Sale Rules
Once you’ve been accepted as an EBT retailer, you’ll have to continue to meet the needs of the EBT program to remain in good standing. That means only accepting SNAP or EBT payments for eligible food items, as well as not charging any sales tax on EBT-eligible items. Furthermore, snap payments cannot be used to pay credit accounts or former debts, meaning that SNAP payments cannot be used for items that were purchased in the past.
Other rules also exist, and if you’d like a trusted partner to help walk you through it, as well as helping you get a handle on those EBT and SNAP point of sale payments, contact the EBT experts at Velocity Merchant Services. We’ll help you complete that application or help you dial in your EBT and SNAP processing equipment so that you can focus on the bigger picture and grow your business.