Businesses must take advantage of a range of merchant services if they want to thrive in today’s world. This includes SNAP and EBT processing. With EBT processing capabilities, your business can accept SNAP benefits as a form of payment.
To better understand the benefits of accepting these payments in retail, remember that SNAP assists low-income individuals and families by giving them financial assistance towards food. EBT stands for Electronic Benefits Transfer. EBT processing lets retail companies accept government benefits as payment for approved food items.
Key Factors for Accepting SNAP
It is important to keep in mind that a retailer must get a permit if they want to be an authorized SNAP retailer. Even so, going through this process is an excellent way to enhance your business and merchant services by expanding your client reach.
Additionally, you must keep in mind that SNAP benefits come with specific rules. Any retailer that chooses to become a SNAP retailer must follow those rules carefully and do their due diligence. Otherwise, they will face penalties if they knowingly violate the rules of SNAP. These can range from fines, to full disqualification from the program (losing access to the benefits of accepting EBT).
If you are considering merchant services that allow for EBT processing, familiarize yourself with common mistakes so you do not face those penalties.
Mistake #1 – SNAP Trafficking and Fraud
There are several ways that food stamp fraud can take place, and any of these occurring at your retail location risk ruining your ability to accept SNAP benefits. One potential fraud is known as SNAP trafficking. This is when someone exchanges their SNAP benefits for cash. This cash would then be used to buy unapproved items, from legal foods not included, to illegal drugs.
Another type of fraud related to SNAP would be if applicants falsify their income. The goal of this fraud would be to gain eligibility for benefits in the first place, or increase the monthly benefit amount, by providing inaccurate income information.
Finally, retail stores may engage in EBT fraud themselves if they were previously disqualified from the SNAP program and then lie on an application so they can reapply. Avoid problems by never becoming disqualified. If you do, reapply via the proper channels.
The best way to avoid SNAP trafficking and EBT processing fraud is to ensure that you only let consumers use their SNAP benefits to buy approved items. Furthermore, ensure you do not provide cash for the benefits, even in an exchange.
There are also some common mistakes that can occur related to EBT and SNAP merchant services in terms of being allowed to accept EBT payments. Avoid them by always submitting accurate information regarding your business. Ensure that your store actually matches the qualifications of a SNAP retailer and do not lie on the application to make it appear you do meet those qualifications.
Furthermore, never accept SNAP benefits until you have received the proper authorization. Doing so can easily lead to fines and future disqualification from the program.
Mistake #3 – Accepting SNAP Benefits for Unauthorized Items
As previously mentioned, SNAP benefits can only be used for certain items. Retailers must ensure that they do not accept EBT payments for items that are unauthorized. The most common unapproved items include: cigarettes, tobacco, alcohol, expensive non-food items, junk food, toiletries, paper goods, firearms, weapons, and controlled substances.
Do not just make it your policy not to accept EBT processing for these items. Ensure your employees have training on which items are eligible for SNAP benefits. Let employees know that if customers do not separate the items, they must do so themselves.
Mistake #4 – Failing to Renew EBT/SNAP License
Since merchant services for EBT and SNAP benefits require an official authorization, it makes sense that some companies forget to renew their license. This is a significant mistake as you will face penalties if you accept EBT without authorization. Most companies must reauthorize their business every five years, but you can double check whether you have a different renewal time frame. You should receive a letter in the mail when you are due to renew your SNAP authorization.
If you follow all of the associated rules, accepting SNAP benefits can be a significant advantage for your retail store as it will boost business by expanding your customer base.
BankCard Services can assist you with your EBT processing needs. With their assistance, it becomes simple to accept EBT payments, so you can focus on remaining compliant with SNAP and running your business. Contact us today to learn more about how you can get started with EBT processing.
Mickael is an entrepreneur and the Co-founder of Bankcard Services. He is a family man and loves technology, innovation, and soccer.