Implementing EBT at Farmers’ Markets

Implementing EBT at Farmers’ Markets • Necessary steps to improve food-access in Chicago March, 2010 - Family Farmed Expo – Farmers Market Forum

What is EBT? • EBT stands for Electronic Benefits Transfer • EBT is an electronic system that allows a recipient to authorize transfer of their government SNAP benefits (Supplemental Nutrition Assistance Program, formerly known as food stamps) from a Federal account to a retailer account to pay for products received. • In Illinois, eligible customers receive a LINK card, which serves as a debit card that customers can use to make purchases at participating locations. • LINK acceptance is rapidly becoming a standard for Farmers’ Markets.

What does it require? • Proper Equipment • Trained Staff • Proper Accounting • Community Education • Trained Vendors • Attention to Detail

Steps to Implementation • Determine your Model • Apply for an FNS# with Food and Nutrition Services • Rent, Lease, or Purchase a Terminal • Develop EBT Transaction System • Train Managers • Train Vendors in Redemption • Community Outreach

Central Terminal Model- Scrip Federal Plaza Farmers’ Market Vendor Name: Nichol’s Farm Amount: $15 Notes: Assorted Produce LINK Card holder comes to market Cardholder visits their favorite market stand and chooses produce they wish to purchase Vendor tallies up the total, and provides the customer with a scrip Market reimburses the farmer either with a weekly or monthly check, or a deduction from market fees The Markets experience increased participation and community involvement! Customer brings scrip to Info Table where their card is swiped for the proper amount at the EBT machine Customer returns to vendor with receipt, and is given produce in exchange for proof of purchase EBT machine prints two receipts; one for the market staff, one for the customer

Central Terminal Model- Token LINK Card holder comes to market Customer approaches Info table and purchases number of tokens they wish to use at market with their LINK card. Customer visits their favorite vendors and uses tokens to purchase products. The Markets experience increased participation and community involvement! Market keeps track of token sales vs. token redemption. Vendors give tokens back to the market and are reimbursed on the spot or by weekly check.

Steps to Implementation • Determine your Model • Apply for an FNS#with Food and Nutrition Services • Rent, Lease, or Purchase a Terminal • Develop EBT Transaction System • Train Managers • Train Vendors in Redemption • Community Outreach

Applying for an FNS # • Any retailer that would like to accept SNAP benefits must be licensed to participate in SNAP and the permit is non-transferable. The following are the steps in the application process. Contact the USDA Food and Nutrition Services: Food Assistance Program. • Obtain and complete a retailer application from FNS either online or by mail, approval can take up to 45 days. • Make contact with our local FNS field office • Once approved by FNS, you will receive an FNS number with the approval confirmation. Chicago Field Office Food and Nutrition Service, USDA 8616 S Pulaski Rd Chicago, IL 60652 888-258-2941 773-585-5025 fax

POS Terminal Options • Wired vs. Wireless • EBT only vs. EBT and Credit/Debit • Purchase and store year round vs. Lease and send back at end of each season • Responsibility of Market Manager vs. third party operator • Most importantly, choose the right Processor!

Overview of Services • EBT Only • Must purchase terminal, • wired or wireless Cynergy Data • Fee Structure for Wireless Terminal • $950 per wireless terminal • One-time $35 activation fee per terminal • $23/month wireless fee (seasonal) • $ 0.27 transaction fee • Fee Structure for Wired Terminal • $400 per wired terminal • $100 per pinpad • One-time $35 activation fee per terminal • $ 0.15 transaction fee

Total Merchant Services • Overview of Services • EBT and Credit/Debit • Terminal Rental • Seasonal Account Closure • Fee Structure for Seasonal Account • $100 one-time setup fee • $48.95/month rental fee per terminal • $18.95/month wireless fee per terminal • $9.95/month Merchant Advantage program • Online statements • Free Machine Replacement • Free Paper Supplies • $10/month customer service fee • Credit card fee is 1.78% and $.35 per transaction ($25 minimum) • Debit card fee is $.35 per transaction • EBT card fee is $.10 per transaction • Other Considerations • Terminals could also be purchased for $895 each. • Owning a terminal reduces monthly costs to around $60/month. • Renting a terminal reduces chance of machine becoming obsolete. • Merchant Advantage Program provides insurance against machine damage. • Seasonal account closure means we don’t have to store machines or pay service fees in the off-season. • The acceptance of Credit/Debit cards has been proven to increase overall sales .

Federal Plaza Farmers’ Market Vendor Name: Nichol’s Farm Amount: $15 Notes: Assorted Produce Developing an EBT Transaction System – Paper Scrip (Chit) • Steps Required • Training • Staff • Vendors • Customers • 2) Develop accounting system • 3) Print and maintain scrips at each market • 4) Track sales from the very beginning • 5) Spread the word around the community • Benefits to a Scrip System • Nothing of actual value is exchanged - as opposed to a token system • All parties leave a paper trail • More cost-efficient system • Simple and effective • Does not easily identify LINK card users

Developing an EBT Transaction System – Market Tokens • Steps Required • Training • Staff • Vendors • Customers • 2) Develop accounting system • 3) Produce enough tokens to have on hand at all times, different denominations • 4) Track sales from the very beginning • 5) Spread the word around the community • Benefits to a Token System • Tactile feel of wooden token • Can be purchased and held on to, given as gifts, used at later time • Ability to use as marketing tool • Familiar transaction to customers • Can use for EBT or credit/debit transactions

Manager Training • Part of overall training • Managers will need to be able to assist customers, vendors, and volunteers. • Whether or not the manager ends up staffing the machine, he/she will still need to know the system and be able to troubleshoot. • Managers will play crucial role in record-keeping and tracking sales • Eyes and ears on the ground - How is this system working? How can we change, streamline, enhance the customer experience?

Vendor Training • Customer service • Vendor accounting • Paper trail, making sure they are reimbursed the proper amount • Knowledge of what can and can’t be sold to LINK card or WIC/Senior coupon holders • Proper Signage • Making sure all of their staff understand the system

Community Outreach • IDHS, WIC, other social and family services offices • Schools, Daycare, Senior Buildings • “We Accept LINK” on banners, flyers, ads • SNAP recipients aware market accepts LINK/EBT transactions • Incentive programs: Double Value, Coupons

Around the Country (www.fns.usda.gov) • New York – 135 farmers markets, 26 farmers, 4 farm stands, 10 mobile markets and green carts accept SNAP benefits. In total, New York had approximately $500,000 in SNAP sales in 2009. 65 markets participated in a $5.00 per EBT customer matching program in 2009. • Michigan - The Michigan Farmers Market Food Assistance Partnership is an organization specifically created to increase Farmers’ Markets participation in SNAP. Under the group’s leadership, the number of farmers’ markets participating in SNAP has increased from 2 markets in 2006 to 16 in 2008. Of the 16 markets, 1 market accounts for approximately 2/3 of the State’s farmers’ market pilot SNAP redemptions. The Eastern Market in Detroit had $58,950 in SNAP redemptions in 2008. This was more than a six-fold increase over redemptions in 2007. • Iowa - Iowa is the only State currently conducting a wireless project for individual farmers through which the State reimburses farmers for fees associated with operating a wireless terminal that can be used at multiple locations. Over 100 farmers’ markets accepted SNAP benefits in Iowa. • Washington -In 2008, the State legislature passed a bill to assist farmers and farmers’ markets obtain wireless POS technology capable of processing both EBT and commercial credit/debit transactions. The EBT program will provide funds to the Washington State Farmers’ Market Association (WSFMA) to purchase wireless POS devices. The devises will be distributed in an equitable manner between urban and rural markets throughout the State.

Around the Country (www.fns.usda.gov) • Massachusetts – $50,000 State fund established for markets to cover costs of EBT machine, service fees, and promotion. Individual markets may apply for funding up to $2,500. • Vermont – 16 farmers markets in 2009 accepted SNAP benefits, with 26 markets planned for 2010. This is a significant increase for the 3-market pilot program in 2007. EBT machines, tokens, service fees, banners, as well as some staffing and promotion is covered, with each market receiving approximately $6,000.

Around the City • Logan Square Farmers’ Market - Has accepted EBT since 2007. In all of 2008 they had $383.75 worth of redemptions, between May and October of 2009 that number rose to $1,721.89. Credit card transactions have risen 250%, and total POS terminal sales increased 270% between 2008 and October of 2009. • 61st Street Farmers Market – In October 2009 received a grant from the Wholesome Wave Foundation for $10,000 to provide matching funds to EBT customers, up to $25/LINK cardholder/market day. Have seen huge increases in LINK card usage and overall sales - $1,000 in 2008 to $5,000 in 2009, with over $1,500 in additional matching dollars. • Green City Market, Logan Square, and 61st St markets are the only markets in Chicago that accept LINK cards.

Implementing EBT at Farmers’ Markets