Amid the chaos of the COVID-19 pandemic, many low-income shoppers and others who relied on government support were caught in a dilemma between going to a store they might consider a danger to. health and staying home and living on less because they couldn’t afford the shipping cost or their method of payment – usually Supplemental Nutrition Assistance Program (SNAP) – was not accepted online. As restrictions ease and conditions return to normal, online access for SNAP recipients, where transactions are as fast and transparent as possible, remains a must for all grocers.
First of all, a bit of history. Government grocery benefit programs designed to fight hunger, like SNAP, which give consumers the option to pay for products, have been in use nationwide since the 1930s. The volume of food aid has increased. declined in the late 1990s, then reversed and hit a record high of 28.2 million with the 2008 recession. The number of users grew every year until 2013 when they started again to decrease. The pandemic has driven SNAP usage rates to its current record high participation, with more than 40 million households dependent on the program.
One of the first actions President Biden took after taking office was the signing of an executive order ordering the federal government to “provide equitable emergency economic assistance to working families, communities and small businesses in across the country “. As part of this action, President Biden also recommended immediate legislation for Congress to include the extension of the SNAP benefit increase by 15%, as well as authorization from the USDA to allow states to increase emergency allocations.
Although the digitization of government food benefit programs began in the early 1980s, the Electronic Benefit Transfer (EBT) system, in which the user receives and stores their benefits electronically and performs transactions for food. via a debit card inside stores, did not gain any real traction until the mid-1990s. Benefits for grocery retailers whose SNAP participants use a card-based system over paper are obvious; and saving time and money by eliminating the counting and grouping of food stamps is most important. The state governments that deliver the benefits are also encouraging the digitization of the SNAP benefits, as this results in reduced paperwork and shipping costs, plus they are able to better control fraud and black market use.
Impact of COVID on SNAP
Before COVID, most SNAP transactions took place in stores with EBT cards. Online use was not an option for most users. Although various pilot programs to develop online options for SNAP have been launched since 2014, user demand was not seen as very urgent. Additionally, SNAP is run state-by-state, which means that any changes to the system had to be approved by the United States Department of Agriculture (USDA) and no entity was really encouraged (or endowed with the necessary resources) to. undertake the intimidating battle to modernize. / update a bureaucracy. However, lockdown conditions forced USDA to speed up approval of SNAP online purchases in 46 states and Washington DC.
In fact, 2020 saw the biggest jump in the need for SNAP benefits since the program began, as well as massive and unprecedented increases in federal government funding, as in-store purchases were not sustainable for many. huge groups of people at risk. A large majority of SNAP beneficiaries are impoverished; many households receiving SNAP benefits include a child, elderly or disabled person, according to the USDA.
Conventional wisdom is that most SNAP attendees will have the ability to shop online when giant national grocery chains and grocery delivery services install the essential payment infrastructure and customer interface to accept. buyers using SNAP benefits. But small chains and independent grocery stores are the real key when it comes to meeting the demand for SNAP online user services. Importantly, a substantial percentage of SNAP users live in low-income neighborhoods and / or rural communities outside the established delivery areas of many large chains.
The optimal online grocery store is one that replicates the in-store experience, while developing the benefits inherent in online shopping. There are, however, situations where SNAP users will encounter different customer experiences that present barriers and challenges. For example, some items in a shopping cart may be SNAP eligible, others may not. In addition, in many cases the shipping costs can be separate. The key for SNAP-eligible retailers is to design their e-commerce platform to compete with the SNAP customer by retaining the SNAP payment experience like consumers using other forms of payment.
From a business perspective, adding SNAP participants to their existing online customer base provides a great opportunity to increase revenue and for independent grocers to enable SNAP payments for their customers who are forced to buy from. food online for at least the duration of the pandemic. maintain and even strengthen their links with the community.
In the future, whether some recipients no longer need SNAP or return to in-store purchases, accepting SNAP for online transactions will ultimately increase the overall customer base and help reduce food insecurity in the region. process.