Will new federal regs force bodega owners to shun food stamps?

Elroy Huynh, who manages his family's Hamilton Express Deli in Mantua, said he would continue to accept EBT cards despite having to absorb the cost of a machine for them. Other grocers have different ideas.
Elroy Huynh, who manages his family's Hamilton Express Deli in Mantua, said he would continue to accept EBT cards despite having to absorb the cost of a machine for them. Other grocers have different ideas. (RON TARVER / Staff Photographer)
Posted: October 14, 2014

A little-noticed change in federal law may hurt small neighborhood grocery stores and their low-income customers who use food stamps.

In 2004, food stamps went digital, switching from paper coupons to electronic cards. In large supermarkets, such Electronic Benefit Transfer (EBT) cards are swiped at checkout terminals along with credit and debit cards.

But in around 118,000 bodegas, corner stores, and mom-and-pop markets nationwide, EBT cards have been used in specific EBT machines provided to stores free in a federal-state partnership, according to the U.S. Department of Agriculture, which administers the food-stamp program, known as SNAP.

Now, all that is changing. The states and the federal government will no longer foot the bill for EBT machines, a measure that could save an estimated $154 million over 10 years, according to federal officials.

Beginning as early as this week, stores will be charged around $1,000 or possibly more a year to use EBT equipment, supplies, and related services, according to Xerox Corp., which administers EBT card programs in 19 states, including Pennsylvania and New Jersey.

For small retailers living on razor-thin margins, that could be a great deal of money, antihunger advocates say.

As a result, advocates fear, stores may either raise prices or decide not to accept EBT cards, a problem that would ultimately land on low-income people dependent on SNAP. Most SNAP recipients are children, the disabled, and the elderly.

"If they charge me that much, I don't think it's worth it for us to accept food stamps anymore," said Gino DiMarco, owner of the Roman Pantry, a small grocery and deli in Carneys Point, Salem County.

Vinod Patel, who runs a small store in Camden named Lou's, was unhappy with the change. "It'll be way more than $1,000 a year," he said.

Patel added he would not stop accepting SNAP, because so many customers use it.

But, he added, "I may have to raise the prices" to compensate.

The EBT change was made in the federal farm bill, in which Congress sets spending on SNAP. The bill, which cut $8.6 billion in food stamps from 850,000 U.S. households over the next decade, became law in February.

Though the cut to SNAP was big news, few people noticed what was happening to the EBT machines.

"I'm most upset," said Jessica Bartholow, legislative advocate with the Western Center on Law and Poverty, a Los Angeles legal services nonprofit that helps low-income people.

"A careless policy change without full vetting will cause so many ripples," said Bartholow, an expert on SNAP, "and there will be people trying to get food who won't be able to.

"Congress didn't even hold a hearing to ask how this impacts stores and low-income people. It's abhorrent, disgraceful, and embarrassing."

A staff member of the House Agriculture Committee who did not want to be named called people's ire over the EBT change "baffling," saying it "never drew any objections from anyone until now."

That's because "no one realized how big a problem it would be," said Patricia Baker, senior policy analyst at the Massachusetts Law Reform Institute, a nonprofit working to advance social justice.

"We may end up with people not being able to successfully use their benefits," she added.

In Philadelphia, more than 1,500 small, often family-owned, corner stores face increased charges that are "too costly," which may compel them to stop accepting SNAP, according to a joint statement by the Greater Philadelphia Coalition Against Hunger and the Food Trust.

"The EBT change caught us off-guard," said David Palmer, a coordinator at the Food Trust, a nonprofit that works with corner stores to provide customers with nutritious foods.

Kathy Fisher, policy manager at the coalition, speculated the change may disproportionately affect customers of stores where SNAP business is only 20 percent or less.

At such places, Fisher reasoned, it may make sense for store owners to stop accepting SNAP purchases, because such sales would account for less than the $1,000 annual EBT equipment charges.

That may happen at Pat's Place in Manayunk, where owner Thomas Lees Jr. has perhaps three elderly SNAP customers amid a relatively moneyed college clientele.

"I would feel bad if I had 12 customers with EBT, and I'd try to see if I could pay for it and just break even," he said. "But now, it's just not profitable."

For Elroy Huynh, who manages Hamilton Express Deli, owned by his father, paying for the EBT machine is a kind of duty.

"We'll be losing money," Huynh said, explaining that SNAP purchases accounted for 20 percent to 25 percent of his family's business, in Philadelphia's Mantua neighborhood. "It was a difficult decision, but it's important we stay loyal to our customers on food stamps.

"If we didn't take their business, I don't know where they would go."

Just who prompted the change in the farm bill is a bit of a mystery, experts say.

A USDA official says the idea originated in Congress as a way to save money.

Congressional sources said the change was the USDA's to make SNAP more efficient.

Lack of transparency has been a problem with the decision to stop free EBT services, Bartholow said.

"The reasons for this were known only to a few people in a room we'll never get to be in," she added.

About 46 million Americans use SNAP benefits. In Philadelphia and its four surrounding Pennsylvania counties, 668,141 people receive the benefits; 121,458 receive SNAP in Burlington, Camden, and Gloucester Counties, the latest government figures show.


alubrano@phillynews.com

215-854-4969

@AlfredLubrano

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