The Food Stamp Program

Training Guide 

for Retailers

United States Department of Agriculture

Food and Nutrition Service
United States Department of Agriculture

Food and Nutrition Service

FNS-330

July 2003

Revised September 2005

USDA is an equal opportunity provider and employer.

Note to Retailer: Your contact with the Food Stamp 

Program will be through your local field office of the 

USDA Food and Nutrition Service. If you do not know the 

address and phone number of this field office, you can 

find it by searching the following web site:

http://www.fns.usda.gov/cga/Contacts/FieldOffices/
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Criteria for Retailers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Program Permit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Part 1: Basic Guidelines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Learn and Enforce the Program Rules. . . . . . . . . . . . . . . . . . . 8

Display the “We Accept Food Stamp Benefits” Poster. . . . . . . 8

Report Violations to Your Local FNS Field Office. . . . . . . . . . . 9

Cooperate With Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Respect Your Food Stamp Program Customers. . . . . . . . . . . 10

Part 2: What Can Food Stamp Benefits Buy?. . . . . . . . . . . 11

Proper Use of Food Stamp Benefits. . . . . . . . . . . . . . . . . . . . 12

Separate Eligible Foods. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Sales Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Credit Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Bottle Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Making the Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

No Trafficking Is Allowed. . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Store Coupons and Trading Stamps. . . . . . . . . . . . . . . . . . 13

Part 3: Electronic Benefits Transfer (EBT) Cards . . . . . . . . 14

EBT Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

EBT Cards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Point-﻿­of-﻿­Sale (POS) Equipment. . . . . . . . . . . . . . . . . . . . . . 15

Food Stamp EBT Purchases. . . . . . . . . . . . . . . . . . . . . . . . 15

Other Types of Food Stamp Program EBT Transactions. . . . . 16

Manual (Key Entry) Transactions. . . . . . . . . . . . . . . . . . . . . 16

Refunds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Voiding a Transaction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Paper EBT Vouchers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Payment for EBT Transactions. . . . . . . . . . . . . . . . . . . . . . . . 17

System End-﻿­of-﻿­Day. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

The Food Stamp Program: Training Guide for Retailers

Contents
Payment to Your Bank Account. . . . . . . . . . . . . . . . . . . . . . 17

Important. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Watch the POS Response. . . . . . . . . . . . . . . . . . . . . . . . . . 18

Other Payment for “Denied” Transactions. . . . . . . . . . . . . . 18

Never Keep the PIN or the Card. . . . . . . . . . . . . . . . . . . . . 18

Customer ID. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Balances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

No Cash Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Customer Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Questions About EBT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Part 4: What Happens if You Break the Rules?. . . . . . . . . . 22

Penalties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Appendix: Food Stamp Information for Customers. . . . . . 25

Contents
The Food Stamp Program: Training Guide for Retailers

Introduction

America’s health depends on good nutrition. However, many 

low-income households still need help to have a healthy 

diet. Each month millions of low-income Americans—more 

than half of them children—get that help through the Federal 

Food Stamp Program. Under the Program, State and local 

social services agencies give monthly food stamp benefits to 

households that qualify. These food stamp benefits—in the 

form of Electronic Benefits Transfer (EBT) debit cards—can be 

used to buy food at authorized retail food stores.

Every retailer who participates in the Food Stamp Program 

must follow all Program laws and regulations. This guide 

will help you learn the Program rules and answer common 

questions about the Food Stamp Program. Even an honest 

mistake could cost you your authorization, so please make 

sure you pay special attention to Part 4: What Happens if You 

Break the Rules?

The Food Stamp Program is administered by the Food and 

Nutrition Service (FNS) of the U.S. Department of Agriculture, 

through its nationwide network of FNS field offices. FNS field 

offices authorize qualified retailers to accept food stamp 

benefits, provide information to retailers, and enforce the 

Program rules to prevent errors and abuse.

The staff of your local FNS field office is available to answer 

your questions and advise you on Program rules and 

procedures. Always consult with them if you have a problem 

or are unsure how to handle a particular situation.

At the end of this publication, we have also included 

information that will be helpful to anyone wanting to know 

more about the Program and how to apply for food stamp 

benefits. This may be helpful in case any of your customers 

ask, or if you wish to tell somebody about the Program.
Criteria for 

Retailers

Local FNS field offices determine whether retail food stores 

meet the eligibility criteria to be authorized to accept 

food stamp benefits. The Food Stamp Program laws and 

regulations require that retail food stores must meet one of 

these two criteria:

1. Your store must offer for sale, on a continuous basis, at 

least three varieties of qualifying foods in each of the four 

categories of staple foods:

• breads/cereals

• dairy products

• fruit and vegetables

• meat, fish, poultry

At least two of these categories must include perishable foods.

2. Your store must have over 50 percent of its total gross sales 

in staple foods, not counting food items such as coffee, 

tea, cocoa, carbonated and noncarbonated drinks, candy, 

condiments, spices, and prepared, ready-to-eat foods.

Remember that you may be visited at any time to ensure 

that these criteria continue to be met. In addition, your store 

will be reauthorized at least once every 5 years.

 Introduction
The Food Stamp Program: Training Guide for Retailers 

You must be authorized to participate. When you are 

authorized you will receive a 7-digit FNS number. This number 

will be one of the ways the local FNS field office will use to 

identify you and your store.

You will also receive a Food Stamp Program Permit (see 

below). You cannot begin to accept food stamp benefits until 

you have it. You cannot use the permit that belonged to any 

previous owner of your store. If your store changes ownership, 

if you move, or if you close your store, your authorization 

permit is void. You cannot transfer it to someone else. You 

must return your permit to your local FNS field office. If you 

own more than one store, you must apply for a Food Stamp 

Program Permit for each store.

Program 

Permit

Food Stamp Program Permit 
 Part 1: Basic Guidelines

Accepting food stamp benefits can help build your business.

If you violate the rules, however, you could lose your 

authorization, be fined, or both.

Protect your business. Learn the proper way to handle food 

stamp transactions. You are responsible for the actions of your 

employees. Train them before they begin ringing sales. Monitor 

their performance. Conduct refresher courses when necessary. 

When changes in the Program are announced, make sure 

everyone knows about them. It is a good idea to document the 

training you provide for your employees.

Your local FNS field office will give you a “We Accept Food 

Stamp Benefits” poster, FNS-132 (see below). Post it in 

a prominent place, to let your customers know that you 

participate in the Program.

Part 1: Basic Guidelines

Learn and Enforce 

the Program Rules.

Display the “We Accept 

Food Stamp Benefits” 

Poster.

“We Accept Food Stamp Benefits” Poster, FNS-132 
The Food Stamp Program: Training Guide for Retailers 

USDA Office of Inspector General Hotline

 1-800-424-9121

Help us keep the Food Stamp Program honest. If you are 

unsure of a procedure, or you suspect someone is violating 

the Program’s laws and regulations, contact your local FNS 

field office. You can also call the USDA Office of Inspector 

General Hotline at 1-800-424-9121.

To encourage people to report fraud and abuse, retail stores 

must post a sign giving information on how to report Program 

abuse. When you become an authorized retailer, this poster 

is provided to you in your authorization package. Display 

your “Report Abuse of the Food Stamp Program” poster 

prominently.

“Report Abuse of the Food Stamp Program” Poster, FNS-240

Report Violations to Your 

Local FNS Field Office.
From time to time USDA employees or their representatives 

may visit your store or request information from you. You may 

also be visited by contractors who work for USDA and they 

may take pictures of your store, both inside and out. You are 

required to cooperate and to respond to all requests. If you do 

not, you may lose your Food Stamp Program authorization.

Finally—and most importantly—treat your food stamp 

customers as you do your other customers: with courtesy and 

respect. 

DO NOT:

• restrict food stamp customers to shopping at certain times 

during store hours, charge them higher prices, or make them 

use lanes designated “Food Stamp ONLY Checkout.”

• require customers to make minimum purchases.

• ask customers for their Personal Identification Number (PIN). 

Only the customer may enter his or her PIN at the Point of 

Sale (POS) terminal to complete the food stamp sale.

Each of these practices violates the law or regulations. 

10 Part 1: Basic Guidelines

Respect Your Food Stamp 

Program Customers.

Cooperate 

With Authorities.
The Food Stamp Program: Training Guide for Retailers 11

The goal of the Food Stamp Program is to help low-income 

households have healthy diets.

Households CAN use food stamp benefits to buy:

• all food intended to be eaten at home. This includes the 

four staple food categories mentioned earlier as well as 

nonalcoholic beverages, snack foods, soft drinks, candy, 

and ice.

• seeds and plants intended to grow food (but not for growing 

flowers or feeding to birds).

Households CANNOT use food stamp benefits to buy:

• beer, wine, liquor, tobacco, or cigarettes

• foods that are hot at the point of sale

• food to be eaten in the store

• vitamins or medicines

• pet foods

• nonfood items such as tissues, soaps, cosmetics, or other 

household goods.

If you have questions about specific food items, contact your 

local FNS field office. You can find the field office by going to:

http://www.fns.usda.gov/cga/Contacts/FieldOffices/

A poster describing what can and cannot be bought with food 

stamp benefits will be provided to you (see illustration at left).

Part 2: What Can Food Stamp 

Benefits Buy?

“Using Food Stamp Benefits” 

Poster, FNS-110
Customers should present food stamp benefits BEFORE they 

pay for food.

Separate Eligible Foods

If your customers separate their eligible and ineligible items—

or if you do it—it will make it easier to total the food items that 

qualify for food stamp benefits. If your store has electronic 

registers or scanners that automatically identify eligible items, 

separating items is not necessary. Equipment should be 

periodically checked for proper programming, to avoid errors 

that might cost you your authorization.

Sales Tax

You cannot charge State or local sales taxes on eligible items 

purchased with food stamp benefits. You may not include the 

sales tax in the purchase price as a hidden cost. (Keeping 

eligible and ineligible items separate will also prevent you 

from accidentally charging sales tax on eligible items.) If you 

have questions about your State’s sales tax laws, you should 

contact your State tax department.

Credit Accounts

Food stamp customers must pay for their purchases at the 

time of sale. You may not accept food stamp benefits 

as payments on credit accounts. You may not hold your 

customers’ food stamp EBT cards at your store for future use.

Bottle Deposits

Food stamp benefits can cover the entire cost of items such 

as eligible drinks in returnable bottles, where the price includes 

a specific bottle deposit. This is true even if the deposit is not 

included in the shelf price.

Making the Sale

If a customer does not have enough food stamp benefits to 

pay for all his or her eligible items, give the customers the 

option of paying for the remaining items with cash or not 

buying them. The client can pay the difference with a second 

card swipe to debit the cash benefits account (if the client has 

one) on his or her EBT card, or with cash. Remember: you 

cannot extend credit to be paid with food stamp benefits at a 

later date.

12 Part 2: What Can Food Stamps Buy?

Proper Use of Food 

Stamp Benefits

●

●

●

●

●
No Trafficking Is Allowed

You can never give cash in exchange for food stamp 

benefits. This practice is known as “trafficking.”

Store Coupons and Trading Stamps

If you accept in-﻿­store coupons from cash customers, you must 

also accept them from food stamp customers. You must treat 

food stamp customers as you do cash customers.

The Food Stamp Program: Training Guide for Retailers 13

●

●
Today, the only form of benefit issuance is the EBT card. One 

of the biggest advantages of the electronic system is that it 

automatically deducts the exact amount of the purchase from 

the customer’s EBT account and deposits it in your store’s 

bank account.

EBT Systems

EBT systems operate like other debit card systems. An 

electronic message goes to a computer for approval. If the 

purchase is approved, the customer’s EBT account gets an 

immediate debit and your account gets an immediate credit. 

At the end of the business day, transactions are totaled and 

the funds are moved. You will usually receive money from an 

EBT transaction within 2 banking days.

The State’s EBT contractor will contact you soon after you 

are authorized to accept food stamp benefits. They will help 

you determine if you need EBT equipment. If the contractor 

supplies you with EBT equipment, they will also provide 

training on how to use it. You will receive a manual with 

information on how to use the system.

All but two States have “on-line” EBT systems which send 

transactions to a remote computer for approval. Ohio (OH) and 

Wyoming (WY) are different. They have “off-line” EBT systems 

and use "smartcards" with a microprocessor chip embedded, 

but visible, in the plastic card. “Off-line” means the transaction 

approval is done by the microprocessor in the card. The 

transaction does not travel “on-line” to a remote computer. 

OH and WY cards work only at POS terminals provided to 

stores in those States. Although OH and WY cards work only 

in OH or WY, all other State cards work in all States as well as 

in stores in OH and WY that have their own POS terminal. 

Note: OH will change to an on-line system and will have 

magnetic strip cards in 2006. Those will be usable in all States. 

As of this printing, WY has not made a decision to change. 

14 Part 3: Electronic Benefits Transfer (EBT) Cards

Part 3: Electronic Benefits 

Transfer (EBT) Cards 

●
EBT Cards

Each State has its own EBT card design. The EBT cards are 

plastic and look like commercial debit and credit cards. Almost 

all cards have embossed numbers on the front and a magnetic 

strip and a signature line on the back. Often, the toll-﻿­free 

numbers for Customer Service are on the back of the card. 

The law requires EBT systems to have food stamp EBT cards 

that can work in any State, except for the smartcards issued 

by Ohio and Wyoming. 

Point-﻿­of-﻿­Sale (POS) Equipment

All authorized retailers can process EBT food stamp benefit 

transactions. States may supply POS equipment or vouchers, 

or you may choose to use commercial equipment provided to 

you by a third party processor (which needs to be arranged 

by you). Commercial equipment can also be used to process 

credit and debit card transactions. The State will contact you 

and connect your commercial equipment to its EBT system. 

This service is provided at a cost that you negotiate with 

the third party processor. Commercial equipment is often 

integrated, meaning that the POS terminal, cash register, and 

scanning device are all connected together in order to speed 

transactions and eliminate errors.

Food Stamp EBT Purchases

Although EBT equipment set-up varies from State to State, 

the cashier should follow these general steps for a food stamp 

EBT purchase:

• Separate eligible foods from nonfood items. Total the 

food amount on the cash register. This step may not be 

necessary depending on the type of equipment you have 

in your store.

• Press “Food Stamp Purchase” key and swipe the EBT card 

through the POS card reader.

• Enter purchase amount into the POS terminal (if separate 

equipment from cash register). 

• Customer enters secret Personal Identification Number 

(PIN) and hits the enter key. Only the customer may 

do this.

• “Approved” message will appear on POS terminal and 

a receipt is printed.

• Give the customer a receipt that shows the EBT balance.

The Food Stamp Program: Training Guide for Retailers 15

●

●

●
Manual (Key Entry) Transactions

When EBT cards are swiped through your POS device, the 

device reads the card number and other information from the 

strip on the back of the card. Sometimes the magnetic strip on 

the card is damaged and swiping the card will not work. IF and 

ONLY IF the card strip cannot be read by the POS machine, 

and the customer is present, then you may use the keys to 

type in the card number. You cannot keep the card numbers 

on file, or enter them manually unless the EBT cardholder 

is present. The card holder must still enter his or her PIN to 

authorize a key-entered transaction. Food Stamp Program 

regulations permit key entry as a back-up convenience for 

recipients, but the recipient is expected to get a replacement 

for his or her damaged card. Damaged cards are replaced 

free. Please do not use the manual key-entry method unless 

the POS device or the client’s card is not working.

FNS monitors the frequency of key entry by store. If a keyentry transaction fails, the recipient needs to pay by another 

method (e.g., cash)—do not use a paper EBT voucher (see 

page 17) in this situation.

Cards are hard to damage. If your POS terminal frequently 

does not accept EBT cards, it may need servicing. Advise 

customers to replace their cards if the magnetic strip 

is damaged. 

Refunds

You can make refunds into the EBT account if the customer 

returns food bought with food stamp benefits. Do not 

refund cash. Learn to use the Food Stamp Program Refund 

Transaction. This may require a supervisor’s or manager’s 

approval as part of the transaction. Your EBT retailer manual 

will have details.

Voiding a Transaction

If you enter the wrong amount into the POS terminal and it 

is approved, some systems allow you to immediately void 

that transaction. This may have to be done at that same POS 

terminal and may require a manager’s password. You may then 

redo the transaction correctly.

16 Part 3: Electronic Benefits Transfer (EBT) Cards

●

●

Other Types of Food 

Stamp Program EBT 

Transactions

●
Paper EBT Vouchers

Paper vouchers are used only when the EBT transaction 

cannot be done electronically. This may happen if your POS 

terminal fails, telecommunications fail, or the host computer 

is down. You must complete the voucher, have your 

customer sign it, and call Customer Service at the time 

of the purchase to get an approval for the purchase. This 

guarantees that the funds will be held for the purchase. 

Always keep your copy of the voucher in case of disputes.

You must electronically clear the voucher within 15 days or 

send the voucher to the State by a set expiration date in order 

to be paid for the transaction. 

Some stores do not qualify for equipment. For these stores, 

the paper voucher is the only way to take EBT cards. See your 

EBT retailer manual for details.

System End-﻿­of-﻿­Day

EBT systems have an end-﻿­of-﻿­day or cutover time when all the 

transactions for the day are totaled and the transfer of funds 

for settlement of accounts begins. Find out when your State’s 

EBT system’s day ends.

If you have a State POS system, you can use it to produce 

totals for your store. This will help you keep your accounts in 

order. You will get an EBT retailer manual that explains this.

If you have commercial equipment, your system may have 

a different cutover time from the EBT system. Ask your 

processor for more information.

Payment to Your Bank Account

If you have State equipment, the State contractor will need 

your bank account information to make payments to your 

account. If you change your bank or your account, you must 

tell the contractor so that the payment will go to your new 

account. Payment will usually arrive in your account within 

2 banking days. If you have commercial POS equipment, 

payment will go from the State EBT contractor to your 

processor within 2 days. Your processor will then pay your 

account according to your agreement.

According to Food Stamp Program policy, banks cannot 

charge retailers to deposit Food Stamp Program EBT 

payments.

The Food Stamp Program: Training Guide for Retailers 17

●

●

● Payment for EBT 

Transactions
Watch the POS Response

Always watch the messages on the POS display. They indicate 

the transaction type and the results. Your store will be paid 

only when purchases are approved. Be sure you press the 

purchase key and not the refund key. Be sure the purchase is 

approved. Be sure your POS is not in training mode.

Other Payment for “Denied” Transactions

If the purchase is denied because there are insufficient funds 

in the Food Stamp Program account, the customer may pay 

in cash. Some customers may have an EBT cash account in 

addition to a food stamp account. If so, you may run another 

transaction and use the cash account to pay the balance of 

the transaction. Otherwise, the customer will need to pay with 

actual cash.

Never Keep the PIN or the Card

Never ask your customer for the PIN and do not watch the 

PIN being entered. Do not enter the PIN for the customer. 

Store cashiers may have to swipe EBT cards for the customer, 

depending on where the POS is located. Give the card back 

immediately. Never keep the card or the card number.

18 Part 3: Electronic Benefits Transfer (EBT) Cards

Important 

●

●

●
Customer ID

When using POS equipment, the PIN identifies the customer. 

No other identification is needed. Most States no longer issue 

food stamp ID cards to EBT customers.

Balances

Customers can check the balance in their EBT food stamp 

account in four ways. POS terminals can be programmed to 

have a balance inquiry function that will provide the balance. 

Many POS terminals have this function. The customer can 

also call a toll-free number to get the balance over the phone. 

After each EBT purchase transaction, the POS receipt shows 

the remaining food stamp account balance. Finally, in some 

States, recipients can check their balance through the Internet.

You may not charge a customer to do a balance inquiry.

No Cash Change

No cash change is given back in EBT transactions because 

the exact amount of the purchase is entered and debited. 

When EBT cards are used, it is illegal for you to give cash 

change back. EBT systems allow for returns and refunds to be 

processed using the card.

Customer Signatures

You do not need the customer’s signature when the EBT 

transaction is done with a PIN. You do not need a signature 

for purchase or refund transactions. If you are using a voucher 

to process the food stamp transaction, the customer must 

sign the voucher. This is needed in case of a dispute, so keep 

the voucher with the original signature for your records and 

provide a copy to the customer.

The Food Stamp Program: Training Guide for Retailers 19

●

●

●

●
Q. Who does what in EBT?

A. FNS authorizes the stores for the Food Stamp Program. 

FNS sets general EBT rules. Each State manages its 

own EBT system and hires contractors to process EBT 

transactions, issues EBT cards, and furnishes POS 

equipment.

Q. What is a third party processor?

A. We use the name "third party processor" for any transaction 

processing provider hired by a store. This distinguishes third 

party processors from the State’s EBT contractor hired to 

provide or arrange transaction processing for stores that do 

not have their own POS equipment.

Q. How does the customer know how much money is in 

his or her account?

A. Food stamp customers are trained to keep their EBT 

receipts, which have the account balance. This is why you 

must always provide the receipt. Customers may also call 

a toll-free number or do a balance inquiry on the POS 

terminal in the store. In some States, if customers have 

access to the Internet they can check their balance.

Q. What happens if the customer lost the card?

A. You may NOT do the transaction without the card. Refer 

the customer to the State's toll-free Customer Service Help 

Line her or she was given during EBT training, or to the county 

office—not the local FNS field office.

Q. What if the customer forgot the PIN?

A. You may NOT do the transaction without the PIN. Refer 

the client to the toll-free Customer Service Help Line that her 

or she was given during EBT training to get a new PIN. The 

customer service number may be on the back of the card.

20 Part 3: Electronic Benefits Transfer (EBT) Cards

●

●

●

●

●

Questions About EBT 
Q. What will EBT cost you?

A. If you have State equipment, EBT costs nothing. If you use 

your own equipment, you will work out costs with your own 

transaction processing provider.

Q. What if a customer presents paper food stamp coupons 

rather than an EBT card?

A. There are still some food stamp coupons in circulation. 

You must accept them. Contact your local FNS field office for 

redemption information.

Q. Is there a risk in accepting paper EBT vouchers when 

system problems occur?

A. Only if you fail to make the call to Customer Service for an 

approval number or if you fail to follow the voucher instructions 

in the EBT retailer manual.

Q. What if I sell my store?

A. The new owner is NOT authorized to accept food 

stamp benefits. You cannot transfer Food Stamp Program 

authorization. If you have State equipment, tell the State EBT 

contractor by calling the Retailer Customer Service number 

before you hand over the store.

Read the retailer instructions you get with your State POS 

machine or materials provided by your own processor.

The Food Stamp Program: Training Guide for Retailers 21

●

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●

●
22 Introduction

The Federal Government spends about $25 billion a year 

to support the Food Stamp Program. This is a tremendous 

investment by American taxpayers. USDA protects that 

investment by vigorously enforcing the Program’s laws and 

regulations and aggressively pursuing violators.

Thousands of retailers have discovered that the penalties for 

violations can be severe. As a store owner or operator, you 

are legally responsible not only for your own actions but for 

those of everyone who works in your store, whether or not 

they are paid. If you, your staff, your employees, or relatives 

redeem more food stamp benefits than your total food sales; 

sell ineligible items; accept food stamp benefits in payment for 

food sold to a food stamp household on credit; or buy or sell 

food stamp benefits, you will be disqualified from the Program, 

and/or assessed a monetary penalty, and could face criminal 

prosecution.

You can be fined up to $10,000 for each illegal transaction, 

plus three times the dollar value of the transaction, and you 

can be put in prison. 

In addition, violators may be referred to the Internal Revenue 

Service for more extensive investigation, and may lose their 

State lottery licenses and alcohol beverage sales licenses. 

The most common penalty is being disqualified from the Food 

Stamp Program.

If you are disqualified from the Food Stamp Program, you 

could also be disqualified from the Special Supplemental 

Nutrition Program for Women, Infants, and Children (WIC). 

Even a temporary disqualification can blemish your business’ 

reputation and its standing in the community.

Know and follow the laws and regulations, train your 

employees carefully, and monitor their performance. If a 

situation arises that you are not sure how to handle, always 

call the local FNS field office first.

22 Part 4: What Happens if You Break the Rules? 

Part 4: What Happens if 

You Break the Rules?
The Food Stamp Program: Training Guide for Retailers 23

The following Federal penalties apply to retailers.

Trafficking—Buying or selling food stamp benefits for cash 

or other items besides eligible food will result in permanent 

disqualification, forfeiture of property, and/or a penalty of up to 

$27,000 for each violation and will not exceed $54,000 for all 

violations occurring during a single investigation.

Sale of Firearms, Ammunition, Explosives, or Controlled 

Substances—Sale of firearms, ammunition, explosives, or 

controlled substances for food stamp benefits will result in 

permanent disqualification or a penalty of up to $27,000 for 

each violation and will not exceed $54,000 for all violations 

occurring during a single investigation.

Sale of Cigarettes, Tobacco, and Alcohol—Sale of 

cigarettes, tobacco, alcohol, or expensive nonfood items 

for food stamp benefits may result in a 3- to 5-year 

disqualification period or equivalent civil money penalty. 

A claim may also be assessed.

The Food Stamp Program: Training Guide for Retailers 23

“Penalties for Violation of the Food Stamp Program,” FNS-136

Penalties
24 Introduction

Sale of Ineligible Items—Sale of common ineligible nonfood 

items on a regular basis for food stamp benefits may result in 

a 6-month to 3-year disqualification or equivalent civil money 

penalty. A claim may also be assessed.

Food Stamp Benefit Redemptions Exceeding Food Sales—

A store whose food stamp benefit redemptions for a specified 

period of time exceed its food sales for the same period of 

time may be disqualified for 3 to 5 years.

Accepting Food Stamp Benefits Without Authorization—

Accepting food stamp benefits without authorization or after 

the effective date of disqualification will result in a fine of 

$1,000 for each violation, plus an amount equal to three times 

the value of the illegally accepted food stamp benefits.

Second and Third Violations—The period of disqualification 

will be doubled for a second violation. For a third violation, the 

action is permanent disqualification.

WIC/Food Stamp Reciprocal Actions—Stores that are 

disqualified from WIC may be disqualified from the Food 

Stamp Program for an equivalent period of time.

NOTE: In addition to the preceding Federal penalties, many 

States have their own laws pertaining to the improper use of 

food stamp benefits, and their own penalties.

24 Part 4: What Happens if You Break the Rules? 
The Food Stamp Program: Training Guide for Retailers 25

As a retailer in the Food Stamp Program, you might like to 

know how the Program works from the customer’s point of 

view. You might also wish to have some information in case a 

customer is interested in knowing more about the Program.

The following questions and answers are from a booklet 

called “Food Stamp Program,” Publication No. FNS-313 (also 

available in Spanish, FNS-313-S). Your customer can ask for 

a copy by calling toll free 1-800-221-5689. He or she can also 

find out the toll-free number in your State, which can tell the 

customer the location and phone number of the nearest food 

stamp office.

There is also more information about the Program on the 

following Web site: http://www.fns.usda.gov/fsp

How do I get food stamp benefits?

Look in the government section (blue pages) of your phone 

book. You can find food stamp benefits under “social services 

department” or “human services department.”

Call the food stamp office to set up a meeting with a worker. 

Ask what papers you need to bring. The worker will need to 

see your pay stubs, rent or mortgage payments, utility bills, 

child- or elder-care bills, and child-support orders (the court 

order and canceled checks).

At the food stamp office you will talk with a worker, answer 

some questions, and sign some papers. If you can’t go to the 

food stamp office, you may send a relative or a friend to talk 

with the worker. Or you may be able to talk with a worker on 

the phone.

The Food Stamp Program: Training Guide for Retailers 25

Appendix: Food Stamp 

Information for 

Customers

●
26 Introduction

One way to see if you might be able to get food stamp benefits 

is to go to http://www.foodstamps-step1.usda.gov on the 

Internet. Answer the questions. If it looks like you might be 

eligible, you can also find out how much you could receive. 

But to find out for sure, you must apply.

Can I get food stamps just for myself if I live with my 

family or with others?

People who live together and buy food and prepare meals 

together are grouped as a “household.” Husbands and wives 

and most children under age 22 must be one household.

Will I have to get a social security number?

Yes, you must have or will have to get a social security number 

for each household member. People in the household who 

do not want food stamp benefits do not have to give their 

social security number. But they do have to give their financial 

information.

Can legal noncitizens get food stamp benefits?

You might be able to get food stamp benefits. Talk with a food 

stamp worker about this. Even if you can’t get food stamp 

benefits, family members born in this country can. Getting 

food stamp benefits won’t cause you any problems if you want 

to become a citizen.

Can I get help if I’m not working?

Yes, but if you are able to work, you must look for work, take a 

job offer, or go to training.

How much income and resources can we have?

The food stamp office will tell you if your income and resources 

are low enough to get food stamp benefits. It depends on 

the number of persons in your household and also changes 

slightly every year. The food stamp office will also tell you if 

any of your expenses can be deducted from your income to 

help you qualify for food stamp benefits.

If my household is eligible, how much will we get?

The food stamp office will tell you how much you will get. It will 

depend on your income and on the number of people in your 

household.

26 Appendix: Food Stamp Information for Customers

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The Food Stamp Program: Training Guide for Retailers 27

Are food stamp benefits cash?

No. Food stamp benefits come on a plastic card that you use 

just like a bank card. You can use them in most food stores, 

but only for food. 

What if I have more questions?

You should call your local food stamp office. Our toll-free 

number, 1-800-221-5689, can direct you to your State’s 

toll-free number. 

For more information about this program and other Federal 

food assistance programs, please visit our Web site at 

http://www.fns.usda.gov.

Find your balance between food and physical activity.

A healthy eating plan is one that:

• Emphasizes fruits, vegetables, whole grains and fat-free or 

low-fat milk and milk products 

• Includes lean meats, poultry, fish, beans, eggs and nuts 

• Is low in saturated fats, trans fats, cholesterol, salt (sodium) 

and added sugars

Be physically active for at least 30 minutes most days of

the week. 

The Food Stamp Program: Training Guide for Retailers 27

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28 Introduction

United States Department of Agriculture

Food and Nutrition Service