SNAP Trafficking Charge Letter

Being a retailer in the Supplemental Nutrition Assistance Program (SNAP) means that you can service low income customers. You might be surprised how this can sustain your business.

Selling to snap recipients comes with important legal duties designed to keep fraud out of the government benefits program. These obligations are not just for you. They extend to your managers and all of your staff members. If anyone in your business gets caught committing acts of fraud, the government may mail you a “trafficking Charge Letter.” Responding to it promptly and properly is paramount.

Understanding Your Legal Obligations as SNAP Retailer

Having SNAP recipients carries important legal duties designed to avoid fraud in the food stamp program. These obligations run to you, your management and your employees. If your store gets caught in certain acts of fraud, you may receive a “trafficking Charge Letter.” Responding to it properly is critical.

Who is Responsible for SNAP Compliance

Why Did I Receive a Trafficking Charge Letter?

The Charge Letter shows up when agents of the Food Nutrition Service (FNS) or the state agency find that you have violated snap rules. The FNS often employs undercover purchasers from whom they get Information on which to base their charges. Undercover customers will approach your you are your staff members, pretending to be EBT customers to see if you or your employees break rules. They could either offer to sell their benefits to you or see if you ask to buy them. Some evidence of your violations can derive from EBT recipients who report you or data obtained from EBT records that are analyzed by computers to spot habits and patterns in the transactions.

How FNS Discovers Violations

What Constitutes SNAP Trafficking?

Trafficking can happen in the form of purchasing EBT benefits from your customers. The recipients accept cash from you and, in some cases, they may then buy products that they are not allowed to buy with their EBT card. Trafficking in snap benefits also includes using a recipient’s EBT card to purchase inventory and then reselling those items to other stores or customers. In some trafficking exchanges, a snap beneficiary may offer to sell you their benefits in exchange for firearms, bullets or illicit drugs. Grocers can permanently lose their ability to receive EBT benefits for participating in trafficking.

Types of SNAP Trafficking

CRITICAL: Grocers can permanently lose their ability to receive EBT benefits for participating in trafficking.

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Other SNAP Violations

Apart from trafficking, snap violations can include failing to post prices, charging EBT customers different (usually higher) prices than other customers, segregating EBT customers into specified checkout aisles and accepting EBT payments for nonfood items. Your customers are forbidden from using snap benefits to purchase beer, wine, liquor, cigarettes, other tobacco products, hot, prepared foods or meals at restaurants (Their are some exceptions in restaurants in some communities that offer reduced-price prepared meals to low-income or homeless people).

Legal Scenario: What Would You Do?

Scenario

You received a letter from the USDA Food and Nutrition Service alleging that your convenience store engaged in SNAP trafficking by exchanging EBT benefits for cash instead of eligible food items. The letter states that your store faces permanent disqualification from the SNAP program and a demand for repayment of trafficked benefits totaling over $127,000.

Can I fight the permanent disqualification and what are my options after receiving this SNAP trafficking charge letter?

Attorney's Answer

Under 7 U.S.C. § 2021(a), the USDA has authority to disqualify retailers found to have engaged in trafficking, and permanent disqualification is the standard penalty for a first trafficking violation under 7 C.F.R. § 278.6(e)(1). However, you have the right to request an administrative review within 10 days of receiving the charge letter, during which you can challenge the evidence — often based on unusual transaction patterns flagged by the Electronic Benefit Transfer system. In some cases, we can argue for a civil money penalty in lieu of permanent disqualification under 7 C.F.R. § 278.6(i) if we demonstrate that your store had an effective compliance policy and the trafficking was limited to a rogue employee. If the administrative process fails, you also have the right to seek judicial review in federal district court under 7 U.S.C. § 2023.

This is general information only. Contact us for advice specific to your situation.

Common SNAP Violations Beyond Trafficking

Items Customers Cannot Purchase with SNAP Benefits

• Beer
• Wine
• Liquor
• Cigarettes
• Other tobacco products
• Hot, prepared foods
• Meals at restaurants (except certain localities that offer reduced-price meals to low-income or homeless people)

How You Need to Respond

The Trafficking Charge Letter that you receive will inform you, in addition to the reasons for the trafficking charge, of your options. The government may afford you the option of paying a civil monetary penalty instead of being permanently disqualified from the SNAP program altogether. You have just ten (10) days from the date of delivery of the letter to ask the FNS to impose the less drastic alternative. If you don’t reply at all, you waive your right to choose. Bear in mind that trafficking normally ends up in a permanent disqualification from participating in the SNAP program. This means you can never enter the program again.

Your Two Options