SNAP Disqualification: Delivery Routes
About once a year, the USDA comes out with a portion of the retailer market that it wants to reduce in size. Typically, they focus on smaller stores and smaller business owners who don’t have the ability to defend themselves the way Walmart does. The Department’s goal is usually to issue a SNAP disqualification to stores that fit their preferred description. In 2017, FNS went after small convenience stores. In 2018, it was seafood stores. Now, in 2019, it’s delivery routes. According to a new post on the Department’s website, FNS is moving to disqualify a number of delivery route retailers from SNAP for whatever violations they can find. What this means is that the USDA is going to be using a number of tools to specifically target delivery routes that have SNAP, and look to disqualify them or find them to be ineligible for reauthorization.
The disqualifications are likely to come in the form of SNAP disqualifications or reauthorization denials on the grounds of:
- SNAP Trafficking;
- Sale of Ineligible Items;
- Acceptance of EBT Payments for Credit;
- Improper Handling of Vouchers; and
- Insufficient Business Integrity.
All of these disqualifications or reauthorization denials are a problem for delivery retailers who are legitimately operating their businesses, but still bear the brunt of the Department’s efforts to eliminate their market. If you own a delivery route, here are some steps you need to take:
SNAP Retailer Training
SNAP Retailer training is an under utilized avenue to both improve compliance, and to provide a safety net in the event one of your employees violates the regulations by trafficking. SNAP training is subject to strict standards, and the records retention requirements are serious. There are services out there, such as Syllabi’s SNAP Retailer Training Program (which Metropolitan Law has an interest in) that satisfy the training information requirement and the record retention requirement. Syllabi’s training also has the added benefit of having been approved by the USDA.
If you are going to take responsibility for training your own employees, there are a few things you need to know: (1) do it in writing with signatures and dates to prove when you did it; (2) be thorough and detailed in the written materials you give your employees; (3) training updates on at least an annual basis are a must. Furthermore, you should be spot checking your employees to verify the purchases and transactions where you can, and retraining on issues that your employees are making mistakes on.
SNAP Reauthorization Problems
FNS was specific in that it is seeking to remove delivery routes however it can. But, one of the specific points of interest was eliminating delivery routes by using SNAP reauthorization denials. In theory, every delivery route should be reauthorized to participate in SNAP once every five (5) years. The reauthorization letter comes in the mail to your mailing address (which you should keep current with the Department) and requests a reauthorization application to be filed within 30 days. According to the USDA’s reauthorization rule, a delivery route must qualify under the following circumstances:
- “An establishment or house-to-house trade route shall normally be considered to have food business of a nature and extent that will effectuate the purposes of the program if it sells food for home preparation and consumption and meets one of the following criteria: Offer for sale, on a continuous basis, a variety of qualifying foods in each of the four categories of staple foods as defined in § 271.2 of this chapter, including perishable foods in at least three of the categories (Criterion A); or have more than 50 percent of the total gross retail sales of the establishment or route in staple foods (Criterion B).”
So, as a SNAP delivery route, you need to either: (A) offer a number of different foods (seven different varieties) in each of the four staple food categories (meat, dairy, fruits & vegetables, and grain/bread) for sale; or (B) to have more than 50% of your total gross retail sales in eligible item staple foods (not hot food or delivered meals). Most delivery routes easily satisfy one or the other, but expect the USDA to question you thoroughly about your records, and to conduct surprise visits to check on the stock of food you have on the truck.
To avoid problems in this area, keep your inventory and detailed sales records for at least a year. The easiest way to establish your sales is by using the raw information contained on those records, and the USDA will be looking for them.
What to Do About a SNAP Disqualification
First, seek competent and experienced counsel, like our attorney’s at Metropolitan Law Group. Do not just call the USDA to talk about a potential violation or a reauthorization denial. They are not permitted to give you useful information, but they are permitted to take down information that they can use against you. We have published a basic guide on what you can expect in a SNAP trafficking disqualification case, but each case is different and you need a specific strategy to match your delivery route. There are no two routes that are the same, and because of the nature of the business model, there is more built in operating flexibility than FNS knows what to do with. So, you need an attorney who can translate the business practices that your route uses into a language the USDA can understand and accept.
Also, don’t delay. Most SNAP disqualification letters have a ten (10) day time limit on them. If you don’t reply in that time frame, they will disqualify you. Our firm offers immediate free consultations and flat fee, no nonsense pricing to handle cases like yours. Call us today 1-833-SNAP-LAW to schedule a consultation with one of our experienced attorneys.