ELECTRONIC REDEMPTION

CHRIS O'LEARY

If there remain any skeptics who believe electronic benefits transfer is not in the future for supermarkets, they are quickly decreasing in number.

In the next few years a solid majority of supermarket retailers will be accepting some form of government benefits through an electronic payment system.

With the formation of multistate EBT alliances around the country and statewide rollouts like the one recently completed in Texas, EBT is moving from concept to reality.

Many retailers agree that EBT is working. Retailers participating in single-county pilot tests as well as those in the throes of full-blown state rollouts point to improved cashier throughput, reduced labor hours and food stamp fraud, and the end of the "first of the month" rush of benefit recipients.

"EBT will be a significant improvement over what we deal with today, for both retailers and, hopefully, the recipients," said George Hood, director of electronic banking services at Wegmans Food Markets, Rochester, N.Y.

Other retailers, however, still feel the weight of unresolved issues, not the least of which is who will pay for the necessary front-end equipment and who will be liable for any losses due to fraud.

Uncertainty also swirls around how various EBT programs implemented by individual states and broader multistate coalitions can work together in harmony.

To get a snapshot of where EBT is today, how it is affecting operations and store strategies, and what issues are being raised in this largely uncharted territory of government-supermarket relations, SN interviewed three retailers in various stages of program involvement.

Rice Food Markets, Houston, has gone chainwide with EBT and says the program's benefits have outweighed any initial glitches. Hy-Vee Food Stores, West Des Moines, Iowa, is involved in a pilot test that it maintains is well structured but lacks the necessary support to flourish. Lowe's Food Stores, Winston-Salem, N.C., is preparing to accept EBT and is studying closely the lessons learned by early adopters.