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For companies that accept payments from supplemental nutritional assistance programs (SNAP), also known as food stamps, there is a risk of falling into non-compliance and losing the eligibility to accept SNAP payments from customers. The SNAP program is created for needy households in the United States. Eligible families are given an electronic benefit transfer (EBT) card that they use to purchase food products at authorized stores.
All retailers who accept snap benefits are subject to regular inspections from undercover United States department of agriculture (USDA) inspectors. Companies that are found in violation of the regulation risk disqualification from accepting food stamps, civil fines, or even criminal charges.
Types of snap Violations
During the inspection process, USDA inspectors look out for various practices that are termed as SNAP violations. The most common one is trafficking, which is the process of exchanging food stamps for money or accepting payment for which no goods were sold. The law forbids retailers from accepting snap benefits from cash. Secondly, snap fraud occurs when an individual lies on their applications to receive benefits or get more benefits that they are entitled to. Retailers who, after being disqualified in the past, lie on their application to get into the program again are also in violation of snap benefits.
Other noncompliance issues include selling unauthorized items and failure to meet certain snap requirements. If an investigator finds a violation, the retailer will receive a charge letter outlining the food nutrition service (FNS) in charge of snap regulations. The charge letter gives a detailed analysis of the violation, where, and how it occurred. The letter also indicates the sanctions for the alleged fraud. A retailer can respond to and defend themselves against the charges presented.
Legal Implications of snap Violations
The federal government is aggressive about fighting snap fraud and takes action against retailers who misuse the program. Companies that sell unauthorized products may be disqualified from the program for six months. However, multiple violations after previous warnings can lead to permanent disqualification from accepting snap payments.
The federal government considers trafficking as a serious offense. Evidence of exchanging SNAP benefits for cashcan result in permanent disqualification from the system. The FNS does not care whether that was the first crime or the amount of money that was involved in the fraud. Losing the benefit of accepting food stamps can cause a business to lose hundreds or thousands of dollars per day.
One of the challenges that retailers face when dealing with snap benefits is that charges can be raised against them even when the violating acts occurred with the employees or management. The owner will face charges and suffer punishment even if they were not aware of the actions. For this reason, it is critical for every business owner to take measures to prevent snap violations within their companies.
How to Prevent snap Violations
The most important step that companies can take is to put in place practices and regulations that prevent employees and management from being involved in snap fraud. Some of these measures include the following:
• Employee Training
Employees should be sensitized about snap benefits and the transactions and acts that can amount to a violation. Every business should develop a written training program to help prepare workers for the different situations that they may encounter and how to handle them. It should be thorough and interactive so that employees can ask questions. Create an environment that encourages workers to come to the management when they don’t know how to handle particular snap transactions.
• Formal Guidelines
Workers tend to ignore or even forget instructions that are presented informally. When it comes to food stamps, it is essential to create formal, written guidelines and ensure that every worker adheres to them. To implement this, you can have the guidelines as part of their employment contract. Outline the products that qualify for snap program, actions that should never be taken, and the implications of violating snap regulations within the company. Once the employees sign the agreement, it will be easier for them to prevent acts that qualify as snap fraud.
• Transaction Tracking
The manner in which your business tracks snap sales and other transactions can help you identify and curb violations even before the inspection process by the USDA. Adopt a point of sale system that utilizes the latest technological features and can identify all the transactions and the items purchased. It should also be able to flag items that don’t qualify for food stamps. With such a system in place, retailers can correct problems and verify that the business is in compliance with snap regulations.
Even after taking all the precautions to protect the business, retailers may find themselves faced with snap violation charges after an inspection. The company usually has ten days to respond to the charges, after which the sanctions will come into effect. Once the business responds to the accusations, the USDA may issue a second letter if they believe that the violations occurred. In this case, it outlines the decision to disqualify or suspend the business from the program.
It is essential for retailers to seek legal help immediately after receiving a violation letter. An attorney will take over the administrative appeal process, compile evidence (where necessary), and take over communications with the USDA. If the USDA insists on pursuing the charges in the second letter, the attorney will file a judicial appeal where a judge will try the case. Working with a lawyer places the company in a better position to disapprove the charges against it.
The federal government is dedicated to safeguarding the snap program and ensuring that it is targeted to families that need it most. In fact, incidences of trafficking have dramatically reduced over the last two decades because companies that violate its regulations are being subjected to severe sanctions. It is critical for every retailer to take these measures to protect their business against the legal implications of violating snap regulations. However, when one is charged, they should seek legal counsel immediately.