Grocers Support Legislation to Permanently Prohibit EBT Processing Fees

Bill would ensure that retailers are responsible only for their own costs

6/15/2023

A new bill introduced in the House would not only protect small retailers from cost-prohibitive processing fees, but also ensure that retailers are responsible only for their own costs as USDA works to update EBT with chip cards and mobile payments.

The National Grocers Association (NGA), the national trade association representing the independent supermarket industry, has cheered the introduction of the Ensuring Fee-Free Benefit Transactions (EBT) Act, a bill championed by Rep. Shontel Brown, D-Ohio, that would prohibit the processing fees on benefit cards given to participants in the Supplemental Nutrition Assistance Program (SNAP).

“Independent community grocers are essential partners in SNAP, providing access to nutritious and affordable foods for American families in need,” said Greg Ferrara, president and CEO of Washington, D.C.-based NGA. “Retailers invest significant capital for the software, equipment and training to provide SNAP benefits for their communities. NGA was pleased to work with Congresswoman Brown on finding a permanent solution to prevent processing fees on SNAP transactions, which could result in limited access to SNAP for beneficiaries and negatively impact the retailers who are indispensable to the program.”

The bill would not only protect small retailers from cost-prohibitive processing fees, but also ensure that retailers are responsible only for their own costs as USDA works to update EBT with chip cards and mobile payments, NGA said. According to the trade organization, this modernization will raise costs for all participating parties, including the federal government, states, EBT processors and retailers, but NGA contended that each party should pay their share of the costs and not pass them down to SNAP retailers.

“We operate stores in many diverse areas that are often deemed as food deserts, and we strive to tailor each store to meet the needs of the various communities,” noted Aaron Saltzman, a fifth-generation grocer at family-owned and operated Dave’s Markets, located in the greater Cleveland, Ohio, area and an NGA member. “We take on large expenses in order to meet the needs of our shoppers, whether they are a SNAP participant or otherwise. Placing additional costs by way of processing fees in the SNAP program onto the retailer would harm our ability to best serve our local communities.”

The wider grocery industry is also backing the bill for the same reasons.

“The EBT Act ensures that processing or other related fees outside of our control, which have never been imposed on retailers or consumers, will be permanently prohibited in the program, and costs associated with a migration to EBT chip cards will also not be imposed on grocers,” observed Jennifer Hatcher, chief public policy officer at Arlington Va.-based FMI – The Food Industry Association. “We are proud to work with Congresswoman Brown and other members of the Agriculture Committee in enacting the EBT Act as part of the Farm Bill reauthorization.”

The 2018 Farm Bill included a provision that banned processing fees on EBT transactions through 2023. NGA is urging Congress to make permanent this prohibition on EBT processing fees, since a ban on the fees is in keeping with the historical standards of the program.