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Protecting Against USDA SNAP Violation

April 21, 2020

Protecting Against SNAP Violations

Many food retailers accept payments from the Supplemental Nutrition Assistance Programs (SNAP), formerly known as Food Stamps. Just being a participant in this program puts proprietors at risk of getting caught up in non-compliance and losing the eligibility to accept SNAP payments from customers. The SNAP program was established to provide support for needy households in the United States. Families who qualify receive an Electronic Benefit Transfer (EBT) card in the name of a household member that they can use to purchase food and food products at stores that participate in the program.

Retail grocery stores that accept SNAP benefits are subject to routine inspections conducted by undercover United States Department of Agriculture (USDA) inspectors. Any store that is discovered to be in violation of SNAP regulations, such as selling red wine or 1942 don julio, run the risk of disqualification from participating in the program, monetary civil fines, or in some cases, the managers and/or owner could get slapped with criminal charges.

Categories of SNAP Violations

In the course of an inspection, USDA inspectors keep an eye out for a multitude of practices that are classed as SNAP violations. The most common one is trafficking, which can include such fraudulent acts as exchanging SNAP funds for currency or accepting payment for which no goods were sold. Legislation forbids retailers from accepting SNAP benefits from cash. Also, SNAP fraud can take place when an individual gives false information on their application to receive benefits or get more benefits than they are entitled to. Retailer grocery store owners who, after being disqualified in the past, knowingly falsify information on their application to re-enter into the program are also in violation of SNAP rules.

Other noncompliance issues include selling unauthorized products and failure to fulfill certain SNAP requirements. In the event that an investigator discovers a violation, the retailer will receive a charge letter outlining the food nutrition service (FNS) in charge of SNAP regulations. A SNAP charge letter lays out a detailed analysis of the violations, including such information as where and how it occurred. This letter also dictates the prescribed sanctions for the alleged infractions. The ball is now in the store owner’s court to respond to and defend themselves against the charges detailed in the letter.

Legal Implications of SNAP Violations

Indeed, the U.S. government is zealous about combatting SNAP fraud and moves aggressively against retailer store owners who misuse the program. Businesses that sell unauthorized products could be disqualified from the program for six months. That said, if you rack up multiple violations after numerous prior warnings, you could be permanently disqualified from accepting SNAP payments at your store.

The federal government views SNAP trafficking as a grave offense. If they find evidence that you or your employees have engaged in the act of exchanging SNAP benefit funds for cash, this could result in permanent disqualification from the program. The FNS does not take into account whether it was the first infraction or how small an amount of money was involved in the fraud. Permanent disqualification can heavily impact some businesses, costing them to lose hundreds or thousands of dollars per day in revenue.

One of the unfortunate situations that retailers face when they participate in SNAP is that charges can be brought against them even if the violating offenses were perpetrated by the employees or management. It is the store owner who is forced to face charges and suffer punishment even if they were not aware of the actions. For this reason, it is crucial for every participating grocery store owner to take measures to prevent SNAP violations from occurring on their premises.

Wise Ways to Prevent SNAP Violations

One of the most important initiatives that businesses who have been accepted into the SNAP program can take is to establish practices and regulations designed to prevent front line staff members (especially cashiers) and store managers from committing acts of SNAP fraud. Here are some smart steps to take:

• Train Your Employees

Your staff should be sensitized about the SNAP benefit program and the transactions and acts that are classed as violations against the applicable laws. Wise business owners implement a written training program to help their staff to prepare for the different situations that they may encounter and how to handle them. The program should be thorough and interactive so that employees can ask questions and lock in the information. Create an environment that encourages workers to openly consult with their management when they are faced with an unfamilar circumstance or don’t know how to handle particular SNAP transactions.

• Establish Formal Guidelines

Store workers have the tendency to ignore or even forget instructions that are presented informally. When it comes to handling SNAP benefits, the best practice is to create formal, written guidelines and impress upon every worker the importance of adhering to them. To implement this, you can include the guidelines in their employment contract. Detail the categories products that qualify for SNAP program, actions that should never be taken, and the implications of violating SNAP laws within the company. As soon as an employee signs the agreement, and they are made aware of the gravity of these rules, it will be easier for them to recognize and refrain from acts that could be classed as SNAP fraud.

• Track Your Transactions

The methods you use in your business to track general transactions and specifically SNAP sales can help you pinpoint and curb violations long before inspectors show up from the USDA. Employ a point of sale system that utilizes the latest technological features and can identify all the transactions and the items purchased. The POS system should also be capable of flagging items that don’t qualify for EBT purchase. With such a system in place, retailers can troubleshoot problems effectively and verify that their business remains in compliance with SNAP regulations.

Replying to a SNAP Charge Letter

Proprietors can take all these wise precautions to protect their business, but they may nevertheless find themselves facing SNAP violation charges after a USDA inspection. In such a case, the company usually has 10 (ten) days to respond to the charges, after which the sanctions outlined in the letter will come into effect. If the store owner responds to the accusations in time, the USDA may issue a second letter in the event that they want to maintain that the violations indeed occurred. The second letter outlines the decision to disqualify or suspend the business from the program.

The best approach is for retailers to consult with legal counsel immediately after receiving an initial violation letter. An attorney can take over the administrative appeal process, compile evidence (where necessary), and assume responsibility for all communications with the USDA. If the USDA insists on moving forward with the charges in the second letter, the attorney can then file a judicial appeal so that a judge can try the case. Enlisting the services of an experienced lawyer places the company in a more enviable position to disapprove the charges against it.

It is the federal government’s desire to diligently safeguard the SNAP program and ensure that it is providing vital assistance to families in America who need it most. In fact, incidences of trafficking have dramatically declined over the last twenty years because companies that violate its laws have been penalized with rather severe sanctions. It is crucial for every retailer to take the prescribed measures to safeguard their business against the legal implications of violating SNAP regulations. Additionally, if after such measures are taken, the retailer gets charged nonetheless in the wake of a USDA investigation, they should seek legal counsel right away.



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