Some online grocers will soon begin to accept food stamps, but make no mistake, it'll still cost you.
Earlier this week, the U.S. Department of Agriculture announced that seven online retailers--including tech companies Amazon and FreshDirect--will be working with its Supplemental Nutrition Assistance Program (SNAP) to accept food stamps in some states. The pilot program will begin in August and run through 2019, reaching the roughly 43 million people currently enrolled in SNAP. But those benefits won't extend to delivery and service charges--fees the tech companies could easily waive.
"Retailers may seek and [we] will review and approve requests to waive or reduce delivery fees. This requires a waiver because SNAP customers have to be treated the same as all other customers per SNAP regulation regarding equal treatment," according to the U.S.D.A.'s Food and Nutrition Service.
So far, not a single company has offered to waive or reduce their fees, according to the F.N.S. The agency notes that it's still early days, and companies may submit waiver requests before August. Amazon declined to say whether it would consider waiving these fees in future.
"Amazon is excited to participate in the USDA SNAP Online Purchasing Pilot," a spokesperson tells Inc. "We are committed to making food accessible through online grocery shopping, offering all customers the lowest prices possible. Amazon's selection and competitive pricing can improve the grocery shopping experience for SNAP participants while helping them extend their benefits further."
A Game Changer?
To be sure, online delivery of groceries--particularly among impoverished communities--is a game changer. Those living in "food deserts"--or areas of the country that lack grocery stores, farmer's markets, and other healthy food options--are key beneficiaries. Residents of these neighborhoods often go out of their way--organizing a carpool, say, taking a bus or train--to get to the nearest store. Or they resort to shopping at local convenience stores, where prices tend to be hiked significantly.
But paying extra fees could add up. Amazon's grocery service, AmazonFresh, is presently only available to Prime members. That means that customers must pay $99 per year, or $10.99 per month, plus an additional $14.99 per month for AmazonFresh. There's also a $9.99 fee for deliveries under $40. It's unclear whether food stamps will be counted toward this purchase minimum, a point on which Amazon also declined to comment.
Meanwhile, FreshDirect charges $6.99 for delivery in the New York metro area, for a minimum order value of $40.
"Hearing that these online retailers are considering making their services available [to SNAP] does create the potential that these folks will get lower prices," says Mark Price, the labor economist with Keystone Research Center in Harrisburg, Pennsylvania. "But I worry about those shipping fees eating into family incomes," he adds.
That's going to have an impact on the effectiveness of the program, says Louise Hayes, an attorney at the Law Center North Central in Philadelphia. "In the scheme of $99 per year, I think most people probably would not do that," she adds. Her firm represents clients who seek cash assistance, food stamps and childcare subsidies, among other benefits.
It's also important to note that many low-income families don't own credit cards or debit cards, which would make it difficult (if not impossible) to pay the service fees online. In fact, nearly 17 percent of low-income families are "unbanked"--meaning they don't have a bank account. Around 19 percent are underbanked--that is, they have a bank account but also use an alternative financial service, like a check cashing service or money order, according to Federal Reserve data. Pilot retailers may opt to accept cash for fees or other non-SNAP costs at delivery if the customer has no other means of paying that amount online, but they are not required to do so.
"My initial reaction to the program is positive," adds Keystone's Price. "But given the nature of the fees, that is a red flag." The U.S.D.A. ultimately hopes to extend the program nationwide, and says it may add more retailers in future.