Have you, as a vendor, been accused of food stamp fraud? If you accept SNAP, EBT and/or WIC at your store and receive a SNAP violation letter, you must respond quickly to avoid a suspension or termination your ability to accept EBT. You have invested hard work and money to build up your store, you make an important contribution to your community – do not let it be taken away from you by failing to respond.
However, do be aware that the USDA is not on your side, anything you tell them can be used against you. You need to carefully respond with documents that support the lawful operation of your store. Do not admit wrongdoing. An attorney can assist you in providing the best response to the violation or charging letter.
The violation letter will tell you that you have ten (10) calendar days from the date you receive the letter to respond to the allegations and provide documents. You must respond in some way within those 10 days or lose all rights to continue to accept EBT.
The letter will generally tell you that you will either be disqualified, or that you may qualify to pay a civil money penalty (CMP) in order to continue to accept SNAP benefits.
If the USDA determines that a store has engaged in trafficking (for example exchanging cash for food stamps), the store and any owner may be permanently disqualified from accepting EBT.
If a store has multiple violations, the store may be disqualified from anywhere from six months to permanently.
Where the USDA determines that it was a first or minor violation, or violations are only based on statistical information about the store, a vendor may be able to continue to accept EBT if they pay the CMP. However, these CMP’s can be quite expensive, in the neighborhood of $59,000.
Respond right away! If you are able to immediately respond with documents that support your store’s honest acceptance of EBT benefits, you may be able to continue to accept EBT and WIC without interruption and without paying a penalty.
An attorney can help you communicate with the investigator, obtain documents regarding the investigation that led to the violation letter, and determine the documents that will support your sales.
How does the USDA initially determine what vendors are violating the rules?
The USDA makes use of in store inspections and investigations to determine if the store is carrying the proper items, has an inventory to support sales, or if it has engaged in suspicious activity. They will look at the size of the store, the amount and price of inventory, presence of shopping baskets and compare it to the amount of EBT sales.
The USDA and local law enforcement may also initiate investigations based on reports of suspicious activity. The main source of fraud is when a store provides cash to a customer in exchange for billing on their card.
The USDA often makes these accusations of violations or fraud based solely on unusual patterns of transactions. For example:
A series of EBT transactions ending with the dollar or cents value;
Multiple withdrawals from the same card over a short period of time;
Excessive or large purchases where a store has limited inventory, few shopping carts and limited counter space.
If an investigator comes to your store and identifies themselves, be sure to show them any storage areas with inventory not visible to the public, and show them the USDA training guide that you keep near the cash register, in addition to showing them the goods that are visible to the public.
Be sure your employees are trained and are familiar with the training video and manual. If you suspect that your employees are going around the rules, take action before they cause you to lose everything you have worked for.
As with most papers that come to your door, do not ignore a violation letter, an early response is your best defense. Let us help you when the USDA comes calling!