State Wants to Stop Paying Grocers for Food Stamps

Discussion
Sep 19, 2003
George Anderson

By George Anderson

A piece in the Des Moines Register, reports the Iowa Department of Human Services wants to stop paying grocers for accepting food-stamp purchases made with an electronic debit
card.

Currently, Iowa grocers receive seven cents from the state for every electronic food-stamp transaction. The state estimates it will pay Iowa grocers $217,000 this year and $330,000
next year as part of the program.

Kevin Concannon, director of the Department of Human Services, said the payments to grocers are an unnecessary expense. Iowa is one of only five states that pays grocers for
electronic food-stamp transactions.

Jerry Fleagle of the Iowa Grocery Industry Association says the program should continue citing processing costs of at least seven cents for each electronic food-stamp transaction.

Moderator’s Comment: Should grocers be reimbursed for handling food stamp paid for by electronic debit cards?

The one thing that left us scratching our heads on this story was the contention by the state association that it doesn’t cost grocers anything to handle
paper-based food stamp transactions. The state says it costs the grocer 75 cents for each transaction. Someone needs to recheck the activity based costing math on this one.

[George
Anderson – Moderator
]

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