For many retailers across North Carolina, federal SNAP benefits (Supplemental Nutrition Assistance Program) are a significant source of revenue. These benefits are available to low-income households to assist with nutritional needs. They’re governed and enforced by the U.S. Department of Agriculture (USDA) Food and Nutrition Service.

However, cashiers sometimes skirt the rules when accepting EBT (electronic benefits transfer) transactions. “Trafficking,” fraud and other violations can result in costly consequences. In addition to imposing monetary penalties, the federal government has authority to permanently disqualify you from engaging in EBT transactions, putting an end to SNAP benefits as a form of revenue for your business.

The USDA is actively investigating small retailers – including gas stations, convenience stores, and specialty grocery stores – for SNAP violations. A strong and proactive defense is essential for protecting your business.

At Marcilliat & Mills PLLC, we help businesses defend against investigations and enforcement actions. Our lawyers understand the regulatory minefield that governs SNAP benefits. We will work tirelessly to protect not only your revenues, but your reputation as well.

What Is Food Stamp Trafficking?

The term “trafficking” is quite broad in scope, but in these cases, it refers to certain types of ineligible EBT transactions. The most common type of trafficking violation involves exchanging food stamp benefits for cash or noneligible items rather than eligible food. Employees who accept these transactions can subject their employer to significant consequences.

Under Title 7 of the Code of Federal Regulations, only authorized retailers can exchange “eligible food items” for food stamps. Eligible food does not include:

  • Alcohol
  • Cigarettes and e-cigarettes
  • Pre-prepared convenience foods
  • Household items
  • Cosmetics
  • Pet food
  • Vitamins/medicine

Examples Of SNAP Trafficking

SNAP trafficking can take many forms. The most common violations involve:

  • Exchanging SNAP benefits for cash
  • Providing cash change for an EBT transaction
  • Accepting SNAP benefits for ineligible items
  • Buying retail food items from a customer who has purchased them somewhere else using SNAP benefits

In practice, a fraudulent EBT transaction might look like this: Your cashier swipes a customer’s EBT card for $100 in SNAP benefits and in exchange hands over $50 in cash to the customer from the register.

Ultimately, a series of transactions like this will result in unbalanced accounting and will likely invite the USDA’s attention in the form of a charge letter.

Other Types Of Violations

A word of warning: There are many types of violations under the Supplemental Nutrition Assistance Program.

For example, accepting SNAP benefits without proper authorization can result in significant fines and penalties. Only stores that sell a certain percentage of “staple foods” can qualify for a SNAP permit. Each store location must have its own permit, and permits can’t be transferred between locations or owners.

Benefit transfers must also comply with certain rules. For example, you should never keep EBT card numbers or PIN numbers on file. Nor should you accept EBT payments over the phone. These rules are designed to safeguard debit card numbers and reduce the incidence of identity theft and welfare fraud.

When it comes to benefit transfers, any type of suspicious activity could lead to a trafficking and fraud investigation.

For example, if your store has numerous transactions that involve manually entering the customer’s EBT card number, you’re more likely to get flagged for suspicious activity. Avoid manual entry of card numbers unless the card reader isn’t working, and only do so when the customer is present.

Penalties For Violations

Store owners are ultimately responsible for training their employees on SNAP transactions. Violations typically happen when employees break the rules. Yet it’s still the store owner who gets held responsible – and often at a costly price.

Penalties for violations may include:

  • Referral to law enforcement agencies for criminal prosecution (which could lead to a prison sentence)
  • Disqualification from the SNAP program on a temporary or permanent basis
  • Asset seizure
  • Loss of liquor license, lottery license and other business licenses
  • Disqualification from the WIC program (and other forms of public assistance)
  • Fines and monetary penalties

Learn more about the various penalties that can arise from specific SNAP violations.

Any food stamp trafficking offense or other SNAP violation – even if just one – can lead to disqualification (among other penalties). And repeat or severe violations can lead to permanent disqualification.

Protect Your Business And Your SNAP Eligibility By Enlisting Solid Legal Help

Based in North Carolina, our attorneys at Marcilliat & Mills PLLC handle SNAP violation cases throughout the country. Much of this work can be done exclusively by phone and email, which means that even if your store is located outside North Carolina, you can still get our help.

When it comes to SNAP cases, we help our clients in everything from defense to compliance to federal appeals, both in administrative proceedings and, if necessary, in court. We understand how to develop the right defensive strategies based on the unique facts and circumstances of each case. And we will fight tirelessly to protect your civil rights – and the success of your business – in the face of serious potential penalties.

To learn more about how we can help you, call 919-838-6643. We offer FREE initial consultations.

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