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Big 8 Food Stores Pilots IBM POS-enabled Smart Cards for EBT Program

El PASO, Texas - Big 8 Food Stores is participating in a one-year pilot that will test the use of new smart cards on IBM point-of-sale systems to conduct electronic benefits transactions for participants in the U. S. Department of Agriculture's Women, Infants, and Children (WIC) Program.

The Electronic Benefits Transfer (EBT) replaces a time-consuming and error-prone paper voucher system that was costly to administer, often uncomfortable for participants to use, and could result in long waits by retailers for reimbursement. WIC participants in the EBT pilot redeem their WIC grocery benefits by inserting their smartcard into a payment terminal attached to an IBM SurePOS* 700 POS system.

"The negative impact was felt everywhere," Mark Bandy, Big 8 Food Stores' c.f.o., told Progressive Grocer. "The voucher system was just intrinsically slower and more cumbersome. The subsequent processing of these vouchers was fairly labor-intensive as well. One can only imagine the work that had to performed by the state to process these vouchers."

The new system automatically debits the recipients' smartcard and credits Big 8 Food Stores for the foods redeemed. No money or paper vouchers change hands, and payment is made electronically to Big 8 typically within three business days, a significant cash flow improvement over the paper voucher system, which typically required several weeks to be processed and paid.

"About 3 percent of our sales are 'WIC-tendered,' but obviously a lot of transactions occur that are only partially WIC-tendered," said Bandy. "I'd venture to guess that 15 percent to 20 percent of our sales are all or at least include WIC activity. The ability to offer a smartcard to WIC program participants is another key step in our pledge to offer quality products at competitive prices and friendly service," said Bandy. "We can now offer our customers a more flexible, convenient, and discreet way to buy WIC menu items than was possible under the voucher system."

The WIC Program is administered by the Texas Department of State Health Services to safeguard the health of low-income women, infants, and children by providing nutritious foods to supplement diets, information on healthy eating, and referrals to health care. The Food and Nutrition Service, an agency of the U.S. Department of Agriculture, has the federal oversight responsibility for the WIC Program.

The pilot, which began June 1, encompasses all grocery retailers who accept WIC in El Paso, including 13 Big 8 stores and 48,000 recipients served through 17 El Paso-area WIC clinics.

Software development to support the new smartcards was executed by IBM Retail Store Solutions and funded by USDA through the Texas Department of State Health Services. Malloy's Cash Register, an IBM Business Partner, developed software to support communications between in-store IBM POS systems and the Texas WIC Program's systems.

"Participation in the SmartCard program is optional only in the sense that participation in the WIC program is optional," said Bandy. "To continue to be an authorized WIC vendor in this county -- which is the site of this pilot project -- one had to be prepared to accommodate the SmartCard.
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