SNAP Trafficking Attorney: Retailer’s Guide
Did you get a letter from the USDA charging you with SNAP trafficking? My name is Andrew Tapp and I am an attorney with Metropolitan Law Group. My firm and I represent more Supplemental Nutrition Assistance Program (SNAP) retailers in the United States than any other firm. We have built this guide to help you understand what the USDA is accusing you of, and what to do about it.
Our firm has been handling SNAP violation cases on behalf of retail food stores and convenience stores since 2013. We are proud to currently represent hundreds of stores across the country in these cases. Our experience as SNAP attorneys and professionals has been included in this guide. However, this is a difficult area of practice. It’s very hard to win these cases if you don’t have experience working with the USDA. Before we get started, there are few things you need to know:
- This letter is very serious. The Food and Nutrition Service is not looking for a casual answer to how or why the transactions occurred. They want to permanently disqualify your store.
- Calling the Department is okay, but only to ask questions. The Program Specialists are very nice people, and most of them do the best job they can. But make no mistake, they are already certain your store is violating the regulations. Otherwise, they wouldn’t have sent you the letter. If they start asking you questions, its to help build a case against you.
- Deadlines are serious. The letter says that you have 10 days (from date of receipt) to respond to the trafficking charges against you. That’s 10 calendar days – not working days. You must retain our firm or respond yourself to meet that deadline. If you don’t, they will disqualify you and shut off your machine about 5 days later.
- We offer free SNAP violation consultations. We don’t do pressure sales, and we know more about this industry than anyone else in the country. If you have a problem, we’ve seen it before and we have handled it before. Even if you choose not to retain us, you can use the consult to gather information and learn more about this process. Plus, it’s free.
What is Trafficking in SNAP Benefits?
Simple question but not a simple answer. The long version can be found in the the SNAP regulations, but that definition is too broad. Specifically, the USDA is charging your firm with exchanging cash for SNAP benefits. That can be done by purchasing EBT cards for cash, or giving cash back on non-EBT Cash transactions (whether or not the store profits from it). These activities are illegal, and (should the Department prove their existence), result in a permanent disqualification and possibly criminal prosecution.
There are other forms of trafficking that appear in different charge letters. The most common of those is where a store owner asks a SNAP participant to purchase inventory with their EBT card and then re-sell it to the store, or to an employee at the store. This is a stretch of the trafficking concept, but still technically applies under the rules. This type of SNAP trafficking is only charged in cases where there are eye witness accounts.
The SNAP Trafficking Charge Letter
All cases I deal with start with a letter sent by the USDA through UPS overnight delivery. The letter is a standard form letter produced by the USDA’s ALERT system, though it can occasionally be modified. There are three important areas I pay attention to: the list of violations (always on the first page, after the second paragraph typically); the name of the Program Specialist handling your case (identified at the bottom of the second page); and the transactions or affidavits attached to the Charge Letter.
The list of violations is the most important. This guide discusses Charge Letters that have sets of transactions attached to them, if yours has a set of affidavits describing specific transactions, I have a different guide for that.
In the transaction Charge Letters, there are six different transaction patterns that the USDA looks for. Each of these patterns has different parameters, though how they’re linked to the act of trafficking isn’t something the Department ever explains. In my experience, the USDA has certain categories they charge more than others, but never explains their reasoning. Nevertheless, your letter probably contains two or more of these categories:
- Same Cent Transactions: This category involves a number of transactions run during the Review Period that end in the same number of cents. The Department feels that these amounts are contrived and not the result of your business model.
- Multiple Transactions Occurring Within A Set Time Frame with Different Households: These transactions are usually those that occur in a given period of time (typically less than 48 hours) and for total amounts exceeding $75. The exact parameters of this pattern aren’t clear from the Charge Letter, and this category of transaction has been recently updated. The USDA’s concern in this area is typically how the logistics of the transaction occur. They believe these transactions are evidence of your store accepting SNAP benefits in exchange for cash.
- Multiple Transactions from the Same SNAP Household in a Set Time: These transactions are similar to the second pattern category, but the Department has a completely different line of thinking here. These transactions include those that occur within a couple of days of one another for an aggregate total of $100.00 or more. Again, the exact parameters of this category aren’t clear in the Charge Letter. Generally, the Food and Nutrition Services (FNS) is worried about the contents of your inventory and the logistics of the transaction.
- An Excessive Number of Manual Transactions: It is the Department’s belief that this category indicates that the EBT card is not present during the transaction, which they believe is an indicator of trafficking.
- Large EBT Transactions Based Upon Observed Inventory: These transactions typically involve transactions exceeding $25 or $30 (depending on your store type and other factors). However, the USDA’s primary concern are the transactions that exceed $50 or so. It is the Department’s belief that no one would reasonably spend that amount of EBT benefits at your store, based upon your inventory.
- Transactions that Exhaust Participant Benefits Unusually Fast: This category involves transactions which are typically large in size, and reduce the Participant’s balance significantly in a short time. It’s the Department’s belief that the participant is liquidating their benefits at your store. There’s also a concern here that your store’s inventory is insufficient to account for those sales.
Can You Negotiate This Out?
No.
It’s a terrifying response. They are not interested in giving you a civil money penalty, nor are they interested in negotiating. During the course of my professional practice with the USDA, I have tried to convince the Department to change this approach. They aren’t interested. So, my goal in representing authorized retailers is straightforward. Win the case. The sales revenue from food stamp benefits is an important source of income for many grocery stores. Losing your status as a SNAP authorized retailer means losing sales, losing customers and maybe losing your store.
What Do You Do Now?
I have a list of what not to do in a SNAP Violation response. Don’t do those things. At the top of what you should do with a trafficking violation is to call my office and get a free consultation 1-833-SNAP-LAW, or fill out an online request for an appointment. However, the next section will give you a better guide as to how we respond to Charge Letters.
As with everything, if you have a question about anything on this page, call us at 1-833-SNAP-LAW and I will be happy to answer whatever questions you may have.