Amazon, Hy-Vee and Safeway among retailers in USDA online food stamp test

Discussion
Jan 10, 2017

Last week, the U.S. Department of Agriculture (USDA) announced it is working with a group of retailers on a pilot designed to test the viability of enabling participants in the Supplemental Nutrition Assistance Program (SNAP) to use their benefits to purchase groceries online.

The goal of the test is to try and help people in urban and rural areas, who may not have a lot of purchasing options, gain access to more nutritious food choices.

“Online purchasing is a potential lifeline for SNAP participants living in urban neighborhoods and rural communities where access to healthy food choices can be limited,” said Tom Vilsack, USDA secretary, in a statement. “We’re looking forward to being able to bring the benefits of the online market to low-income Americans participating in SNAP.”

Retailers participating in the program, which will start this summer and run for two years, include:

  • com (Maryland, New Jersey, New York)
  • Dash’s Market (Based in Buffalo, NY)
  • FreshDirect (New York)
  • Hart’s Local Grocers (Based in Rochester, NY)
  • Hy-Vee (Iowa)
  • Safeway (Maryland, Oregon, Washington)
  • ShopRite (Maryland, New Jersey, Pennsylvania)

The pilot will test both online ordering and payment. Payment, according to the USDA, presents both technical and security challenges that will need to be worked out before the agency expands the test to other regions and then rolling it out nationwide.

One potential damper is that while SNAP participants may use their benefits to purchase food online, that ability will not extend to delivery charges, which must be paid out-of-pocket.

SNAP helps supplement the food budgets of low-income Americans. According to the USDA, the program covers more than 43 million individuals, nearly half of which are children and 10 percent are above 60 years of age. More than 40 percent of recipients live in households where there is an income.

DISCUSSION QUESTIONS: Will allowing people participating in the SNAP program to purchase groceries online help those living in rural and urban food deserts? What challenges will the USDA and participating retailers face in making the online program work?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"It seems incongruous to make online order and delivery available and then not cover the delivery charges. "
"Excluding the delivery charge should not be part of this discussion, just like covering the cost of gasoline is not."
"The rules governing what SNAP can and cannot be used for are reasonably clear."

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4 Comments on "Amazon, Hy-Vee and Safeway among retailers in USDA online food stamp test"


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Ben Ball
BrainTrust

To the extent that this provides access to decent food for SNAP recipients who otherwise can’t get it — that’s a plus. But if those are the beneficiaries, it seems incongruous to make online order and delivery available and then not cover the delivery charges. Instead the program implies “you can do this — but we’re not going to pay for it for you.” That makes it appear that the program is really aimed at extending the convenience of online/delivery to SNAP purchases — not facilitating new access.

Dan Raftery
Guest

As the grocery industry continues to discover digital commerce, it just makes a whole lot of sense to make a payment option available to 60 million U.S. consumers, totaling $80 billion in 2015. Excluding the delivery charge should not be part of this discussion, just like covering the cost of gasoline is not. I expect to see online “food stamp” usage become even more important as Boomers age at home and forget where the grocery store is located.

Steve Montgomery
BrainTrust

The rules governing what SNAP can and cannot be used for are reasonably clear. They were laid out to enable the purchase of a variety of food categories to ensure it recipients would not be using the benefits to make what were deemed unhealthy foods. It was also designed to protect SNAP users from retailers taking unfair advantage of them. One example would be delivery charges which unlike the products are not subject to as much competition.

David Livingston
Guest
4 years 9 months ago

Great idea and it will cut down on abuse. The delivery charge is probably a wash since customers don’t have to drive, Uber, or take a bus. I just hope gas stations and liquor stores suddenly don’t become involved.

wpDiscuz
Braintrust
"It seems incongruous to make online order and delivery available and then not cover the delivery charges. "
"Excluding the delivery charge should not be part of this discussion, just like covering the cost of gasoline is not."
"The rules governing what SNAP can and cannot be used for are reasonably clear."

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