USDA starts test of SNAP online purchases in New York

In a pilot program with Amazon and Walmart, the U.S. Department of Agriculture (USDA) has launched online grocery service for Supplemental Nutrition Assistance Program (SNAP) participants in New York.

The USDA said Thursday that the test — slated to add ShopRite early next week — marks the first time that benefit recipients under SNAP, formerly known as food stamps, can shop and pay for food online.

“People who receive SNAP benefits should have the opportunity to shop for food the same way more and more Americans shop for food — by ordering and paying for groceries online. As technology advances, it is important for SNAP to advance, too, so we can ensure the same shopping options are available for both non-SNAP and SNAP recipients,” USDA Secretary Sonny Perdue (left) said in a statement. “We look forward to monitoring how these pilots increase food access and customer service to those we serve, specifically those who may experience challenges in visiting brick-and-mortar stores.”

Under the two-year pilot, the USDA and the retailers will test online ordering and payment. SNAP households that want to buy groceries online through the program can only use electronic benefit transfer (EBT) cards issued by New York for payment. Amazon and Walmart are currently able to accept SNAP EBT payments through their websites, the USDA said.

Related:Online retailers to take part in SNAP pilot

SNAP recipients will be able to use their benefits to buy eligible food products but not to pay for service or delivery charges, the department noted.

Retailers in the test are limited to delivery in the pilot areas. Amazon and ShopRite are providing the service to the New York City area, while Walmart is enabling the service in upstate New York locations.

“We are excited to be part of the USDA’s pilot program and to be able to make our [Walmart] Grocery Pickup and Delivery service available to more and more people, regardless of their payment method,” Walmart said in a statement Thursday. “Access to convenience and to quality, fresh groceries shouldn’t be dictated by how you pay. This pilot program is a great step forward, and we are eager to expand this to customers in other states where we already have a great online grocery business.”

In the coming months, the pilot will expand to include more retailers and broader geographic coverage, including other areas of New York plus Alabama, Iowa, Maryland, Nebraska, New Jersey, Oregon and Washington, the USDA said.

“We’re pleased to see the online SNAP redemption pilot launch today in parts of New York. The pilot explores the feasibility of using SNAP benefits to shop and pay for groceries online,” said Hannah Walker, senior director of technology and nutrition for the Food Marketing Institute (FMI). “In just five to seven years, as many as 70% of U.S. consumers will regularly purchase consumer packaged goods online, according to FMI research. This pilot program allows individuals of all ages, demographics and accessibility using SNAP to have the same access as other shoppers using e-commerce programs daily.”

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According to Kristina Hermann, director of underserved populations and SNAP EBT programs at Amazon, enabling SNAP benefits for online purchases will dramatically increase food access for remote customers and help address the problem of “food deserts,” especially as the geographic coverage of the pilot expands.
“This is the first time that millions of SNAP recipients in New York state can redeem their grocery benefits online. Amazon enthusiastically volunteered to work with the USDA and participate in this landmark pilot because we believe in the goals of this program and its potential to significantly extend the value of those public benefits,” Hermann commented. “Amazon is committed to increasing access for customers by offering low prices on a wide selection of items. With online acceptance of SNAP, Amazon is also offering New York SNAP customers the ability to shop the grocery and household selection on AmazonFresh and Prime Pantry without requiring a membership fee. This new initiative helps us increase access for millions of low-income New Yorkers by adding a new SNAP redemption option, with broad selection, low prices and the convenience of home delivery.”

The effort to enable online grocery service for SNAP stems from the 2014 Farm Bill, which authorized the USDA to test online purchasing for recipients before rolling it out nationally.

The USDA’s Food and Nutrition Service (FNS), which administers SNAP, issued a call for retailer volunteers for the SNAP Online Purchasing Pilot in September 2016 and then in January 2017 offered participation in the pilot’s first phase to Amazon, Walmart, ShopRite, Safeway, Hy-Vee, FreshDirect, Dash’s Market and Wright’s Markets. Phase one of the test will focus on the safe and secure processing of online transactions.

“While today’s launch is limited in stores and geographic areas, we are enthusiastic about the future expansion opportunities for this online retail program,” FMI’s Walker added. “The pilot is the initial step toward a full nationwide deployment of online SNAP sales to improve access and options for SNAP customers.”

Nationwide, SNAP participation totaled 38.2 million people and 19.3 million households as of April 5, according to USDA data. The average monthly benefit was $151.01 per person and $299.32 per household.

Nearly 260,000 companies — including about 17,600 supermarkets, 20,000 superstores, 3,800 large grocery stores and 13,200 small grocery stores — were authorized to redeem SNAP benefits in fiscal 2017, the most recently available USDA retailer data. Together, supermarkets and superstores redeemed more than 82% of all SNAP benefits but accounted for just 14.25% of the total number of authorized firms. California, Texas, New York and Florida had the highest number of redemptions and companies authorized to redeem SNAP benefits.