SNAP Trafficking Defense: Protect Your Store

A Merced, California SNAP Retailer

Tucked inside a low-income neighborhood, and well away from other retail food stores, our client’s store was a neighborhood staple.   Though it was not more than about 1,250 square feet in size, the converted gas station offered a variety of groceries and food items that the local Electronic Benefit Transfer (EBT) participants liked.  The store sold common  foods like soda and energy drinks by the pack, and frozen foods and pizzas to EBT households.  However, unlike other stores in the area, this store had a large variety of staple food groceries that the average convenience store didn’t.  Instead of focusing on just chips, soda and candies, our client’s store had fresh fruits and vegetables, pre-made sandwiches and an entire cooler of dairy items.

Our client didn’t know every customer by name, but he knew them by sight.  Many of these households had lived in the area for years.  Often, the Supplemental Nutrition Assistance households would include multiple generations from the same family.  Nearly everyone in the household would shop at our client’s store.  Sometimes they’d shop together, while other times they would come in separately.

SNAP Transactions

Our client’s customers came into the store with friends or family and were usually in a good mood.  Shopping was a pastime and when the EBT benefits were deposited into their accounts every month, the first two weeks would bring a flood of happy customers.  Some SNAP customers would come in several times a day, happy to be able to purchase whatever foods they wanted.

Our client’s sales were not huge.  His largest EBT transactions were less than $100, and most of his sales were in the $20-$49 range.  But the store was popular, clean, and well run – so people liked to visit and make purchases.  However, our client’s passion was more than just the store’s appearance and inventory.  He made certain no SNAP violations occurred.  They didn’t sell ineligible items on EBT, and they certainly didn’t traffick in SNAP benefits.

The USDA, however, believed otherwise.

USDA's ALERT Scan Analysis

Although he didn’t know it at the time, the USDA was tracking every transaction that the store conducted.  The USDA’s program specialists looked at the size of his transactions and the frequency his SNAP customers shopped at the store and began to compile what is called a “Case Analysis Document” or a “CAD.”  This CAD was put together by the USDA’s program specialist to make a case that our client’s success was the result of fraudulent activity – not because our client ran a good store and worked hard.

The program specialist’s CAD was built to prove one thing: that our client was engaged in trafficking in SNAP benefits – a violation of federal regulation 7 C.F.R. §278.6.  The USDA utilized five categories of data in its analysis.

Store Background & History

Program specialists often consider the store's background, past SNAP applications, and EBT revenue.  Many times, a program specialist will consider whether the store has any past disqualifications.  The most important information, however, is a review of the store's transaction averages.

Store Visit Report

Store visits are conducted by USDA contractors.  These contractors are paid to review a SNAP retailer's inventory, business model, equipment, and physical size.  They take pictures, and are supposed to ask questions of store owners about pricing and practices.

The ALERT Scans

The USDA utilizes the ALERT System, which is a computer program that (among other things) tracks retailer transactions across the country.  There are seven (7) ALERT Scan categories, each of which looks for different transaction attributes.  Program specialists use these categories as their primary evidence in EBT analysis SNAP violation cases.

Comparison Stores

The Agency compares a subject store to other retailers in the area that accepted SNAP benefits during the "Review Period."  The period of time that the program specialists use to review transactions is called the "Review Period."  They compare store inventories, equipment, and business practices to determine whether or not a store is violating SNAP regulations.

SNAP Households

Program specialists typically pick a handful of SNAP customers to review their EBT transactions at the store.  Each time a SNAP household uses their EBT card, the USDA can see when, where, and how much that card was used for.  Often, program specialists will use these transactions to evaluate a household's trip the grocery store.

SNAP Violation Letter

Our client received a "Charge Letter" from the USDA more than five months after the end of the Review Period.  The program specialist, and her boss the section chief, alleged that the store had trafficked in SNAP benefits.  The penalty for such a violation was permanent disqualification.  Worse yet, the Charge Letter notified our client that he would only have 10 days to respond to the allegations.

Rather than contacting a defense attorney or a SNAP violation law firm, our client took his case to his accountant.  They believed that the USDA would negotiate a fine or a fee since the store had never been disqualified, and the owner was unaware of any violations.

The accountant was wrong.  The USDA does not negotiate these matters.  Unfortunately, our client received a permanent disqualification, and their EBT license was deactivated the same day.

Merced SNAP Violation Attorney

The store owner's accountant found Metropolitan Law Group, and this website, on the internet.  After reading more about the USDA's charges and process, our client's accountant decided that perhaps the best course of action would be to discuss an Administrative Review (an appeal) of the disqualification.  We were happy to give the store a free consultation, and to evaluate their case.  Our SNAP violation lawyers have more experience than any other firm in the United States in food stamp and SNAP cases, so we were able to quickly identify the flaws in the USDA's case.

Since 2012, our attorneys have represented SNAP retailers in cases involving disqualifications.  We have handled more Administrative Reviews, Judicial Reviews in district court, and SNAP violation letters than any other firm in the United States.  Our wealth of knowledge indicated that the USDA had failed to fully consider our client's inventory, local SNAP population demographics, and the absence of nearby SNAP competitors.

Another SNAP Retailer Saved

Our client retained us in the midst of significant revenue losses. His EBT transactions had stopped with the disqualification, but many of his SNAP customers had stopped visiting the store.  We were tasked with not only compiling a strong case, but doing so quickly.  Our attorneys and paralegals worked quickly to compile a thorough, 45 page brief and hundreds of pages of exhibits to address all five of the Agency's concerns.

Our effort, and our client's faith in us, was rewarded with a win.  Our client was able to start processing SNAP transactions the next day.

SNAP Violation Attorneys for Your Store

Cases like this are not easy to handle.  Though many talented accountants and bookkeepers provide valuable instruction and guidance with state and federal agencies, the Supplemental Nutrition Assistance Program is unusual.  The USDA is not interested in negotiating with your store, nor do they want to issue a fine.  Instead, the USDA wants to issue as many disqualifications they can, especially to small stores.  That's why the SNAP lawyers at Metropolitan Law Group are a valuable resource to thousands of SNAP retailers across the nation.  We provide the best representation, the most knowledge, and an aggressive approach to protect your livelihood.  Let us help you too.

Scroll to Top