The Harsh Penalties For Retailers Who Engage In SNAP Trafficking Or Violations

SNAP benefits are an important source of revenue for many retail businesses, including gas stations, convenience stores and specialty grocery stores. These federal food stamp benefits are a type of public assistance administered through the U.S. Department of Agriculture's Food and Nutrition Service. The Supplemental Nutrition Assistance Program provides benefits for low-income households to buy certain eligible food items. SNAP recipients receive an EBT (electronic benefits transfer) card, which they may use to make eligible purchases.

Businesses that are authorized to accept SNAP benefits must comply with detailed rules and regulations. One of the most common violations - food stamp trafficking - occurs when:

  • An employee accepts SNAP benefits in exchange for cash
  • An employee buys an EBT card number and PIN number from a customer
  • An employee provides cash change for SNAP benefits
  • An employee accepts SNAP benefits for ineligible items (such as cigarettes, alcohol, cosmetics or household goods)
  • An employee buys retail food from a customer who purchased it with SNAP benefits

Often, store owners aren't aware of this activity, but they can nonetheless be held accountable. The consequences for such violations can affect the entire business.

Three Main Types Of Civil Penalties

There are three main penalties for SNAP violations enforced by the USDA:

  • Permanent disqualification
  • Temporary disqualification
  • A civil fine

The applicable penalty depends on the type of violation and the number of previous violations. The first intentional program violation (IPV) typically results in a 12- or 24-month suspension from the program, meaning retailers are unable to accept SNAP benefits during that period of time. However, if the violation involved accepting a transfer of public benefits in exchange for alcohol or weapons, the disqualification will likely be permanent. Repeat violations can result in double the suspension time or permanent disqualification.

These penalties revolve around your ability to do business and keep the doors open. Both permanent and temporary disqualification will impact your store's revenue, while a civil fine for a single violation may reach well into the thousands of dollars.

Criminal charges are also a possibility in cases involving intentional violations on a large scale. A conviction can lead to a sentence of up to 20 years in prison and steep criminal fines. In addition, in cases where program benefits are used to purchase controlled substances, serious drug trafficking charges may be tacked on.

Read on for more information about the three most common types of penalties.

Permanent Disqualification

In general, the most damaging civil penalty for SNAP violations is permanent disqualification. Many retailers depend on EBT customers as a significant source of revenue. The inability to accept EBT transactions can put you at a significant disadvantage compared to your competitors. Some retailers even go out of business following permanent disqualification.

Under the Code of Federal Regulations (7 C.F.R. § 278.6), the Food and Nutrition Service of the U.S. Department of Agriculture has the authority to disqualify any retailer from participation in EBT transactions, based on the retailer's failure to comply with the Food Stamp Act of 1977.

What Leads To Permanent Disqualification?

The following are examples of activities that could lead to permanent disqualification - even if you didn't know about it:

  • Your employees repeatedly engaged in EBT trafficking, defined as the buying, selling, stealing, or otherwise exchanging SNAP benefits for cash or ineligible items.
  • Your store sold ineligible items (such as alcohol or cigarettes) and was twice sanctioned in the past for doing the same thing.
  • Your employees exchanged weapons, ammunition or alcohol for SNAP benefits.
  • You knowingly submitted false information on your application for SNAP authorization (which can also lead to a fraud investigation and criminal charges).

Temporary Disqualification

Temporary disqualification can also be extremely damaging to your business, depending on your cash position and the length of the disqualification. Under the Code of Federal Regulations, temporary disqualification can last anywhere from six months to five years. The length of time will depend on the type of violation, the weight of the USDA's evidence against you and the number of prior SNAP violations.

Civil Money Penalty

A civil fine is known as a "civil money penalty" under the Code of Federal Regulations, which authorizes the U.S. Department of Agriculture to enforce the law against food stamp trafficking.

The actual amount of the civil fine depends on how much business your store does in EBT transactions as well as the number and type of SNAP violations alleged against you by the USDA.

Important: If there is any good news here, it's that the USDA's authority to issue a civil fine - instead of disqualification - means you could preserve your future EBT revenue. This outcome depends on whether or not your business had the proper compliance program in effect.

By taking proactive steps to properly train your employees and put a compliance program into place, you can help prevent violations in the first place and protect your business should a violation occur.

Facing An Investigation Or SNAP Violation Charge Letter?

If you've received a charge letter from the USDA, or are under investigation for possible SNAP violations, or have recently been contacted by law enforcement in regard to your EBT transactions, contact Roberts Law Group. Based in North Carolina, we help owners of gas stations, convenience stores, and specialty grocery stores anywhere in the country.

Because SNAP violations involve federal law, we can help you no matter where you are in the United States. Our SNAP defense practice spans the nation.

Our lawyers understand the maze of regulations that govern public benefits under the SNAP program. We will fight for the best possible outcome in your situation. We can also help put proactive compliance measures into place to protect your business down the road.

Get in touch with our attorneys for a FREE consultation. Call 877-880-5753 or reach out online.

North Carolina vs. M.W.
Charge: Charge: Robbery with A Dangerous Weapon (4 Counts), First Degree Burglary, Conspiracy to Commit Robbery with A Dangerous Weapon
Facing: 12 - 17 years in prison
Result: Dismissed

An incarcerated defendant accused our client of participating in the robbery of a group of youth at a party. We were able to raise doubt as to the credibility of this individual. In the end, the prosecutor dismissed these charges, citing a lack of evidence.