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Arkansas WIC EBT S takeholders’ Meeting – May 5, 2009. Partnering to create a better WIC. WIC The Retailer Perspective (Gary). How big is WIC business? WIC is relatively small, approximately 1.5% total food sales, annually FY 2008 WIC sales: Arkansas: $49 million; 90,000 participants

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wic the retailer perspective gary
WIC The Retailer Perspective (Gary)
  • How big is WIC business?
    • WIC is relatively small, approximately 1.5% total food sales, annually
    • FY 2008 WIC sales:
      • Arkansas: $49 million; 90,000 participants
      • Nationwide: $4.5 billion; 8.9 million participants
  • The importance of WIC is not limited to WIC food sales, it extends well beyond, to total food sales
    • When shopping, WIC participants buy much more than WIC food items
    • Nutrition education classes teach WIC participants to purchase and prepare nutritious, healthy foods
    • Families with healthy babies and children spend more money on food at home
    • WIC customers are often part of a store’s “loyal” customer base
      • Use a loyalty card
      • Use vendor coupons
      • May use SNAP
wic the retailer perspective gary3
WIC The Retailer Perspective (Gary)
  • Generally, all retailers base major decisions on a profit-centered business model.
  • Since 2004, WIC vendors in Texas and New Mexico have experienced a positive return on investment (ROI) in offline WIC EBT, the Smart Card Technology.
  • Paper WIC has long been the most costly, time-consuming, and confusing transaction conducted at the retail point of sale.
  • Based on retail experience, we would consider the WIC EBT system model deployed by Texas and New Mexico a “best practice” business decision. It’s a smart and cost effective way to increase food sales while lowering the high costs of WIC food sale transactions.
retailer business model considerations gary
Retailer Business Model Considerations (Gary)
  • EBT
    • Increase sales
    • Reduce operating/overhead costs
    • Maintain/increase profit
    • Efficient checkout for the customer
online wic ebt retailer experience reed
Online WIC EBTRetailer Experience (Reed)
  • Costly
    • Millions of dollars expended
  • Problematic
    • Online programs have been attempted in several different states, with several different processors over the last six years.
    • Only one retailer has successfully integrated their POS with online WIC EBT
    • Others have spent millions trying
  • Significant increase in Michigan-specific processing outages during the last six months
    • Often linked to “out of memory” issues.
    • Affecting SNAP EBT and WIC EBT
  • Stand-beside terminals
    • Operational nightmare.
    • Cashiers must scan every WIC item twice.
    • When prices change, managers must enter the new prices into each terminal.
    • Access limited to between 2 and 5 lanes.
    • Clients must declare that they are conducting a WIC transaction – spotlighting that customer as a WIC recipient.
offline wic ebt retailer experience jason reed
Offline WIC EBTRetailer Experience (Jason/Reed)
  • Background
    • Partnered with Texas and New Mexico EBT from the beginning
    • Roll-out has been smooth throughout Texas and New Mexico
    • Wyoming successfully converted from SVS to Texas model Nov. 2008 using the same card as Texas and New Mexico
    • Cherokee Nation implementing on a tight timeline – no problems anticipated
  • Advantages
    • No third parties siphoning dollars from the WIC agency and retailers.
    • Increased transaction speed – no wait for Host communication or outage delays.
    • Fully interoperable – New Mexico and Texas are doing this today.
    • Cards can be leveraged to include SNAP, TANF, Medicare/Medicaid, child support and Social Security.
offline wic ebt retailer experience gary curtis
Offline WIC EBTRetailer Experience (Gary/Curtis)
  • Texas WIC modified proprietary electronic cash register (ECR) and point-of-sale (POS) systems to accept smart cards in-lane in exchange for long-term retailer commitment.
  • Execution
    • WIC EBT enabled ECR and POS systems representing 75% of WIC vendor lanes nationwide have been certified by USDA/FNS and Texas as meeting design, performance and accuracy standards – ICL-Fujitsu, IBM-ACE, IBM-SA, NCR, ACR, Wal-Mart (IBM), JPMA, Sweda
    • ECR/POS representatives provide WIC EBT enhancements to WIC vendors with qualifying systems at no cost
    • Texas WIC vendors with non-qualifying systems are reimbursed for their purchase of USDA/FNS and Texas certified ECR/POS systems in accordance with the USDA/FNS approved reimbursement policy.
wic ebt independent grocer perspective polly
WIC EBTIndependent Grocer Perspective (Polly)
  • Arkansas WIC Locations (approx)
    • One location: 135
    • Between 2 and 13 locations: 134
    • More than 13 locations: 172
  • Independent grocers in Texas, New Mexico, and Wyoming have embraced offline eWIC enthusiastically.
  • USDA reimbursement of system costs helped many smaller retailers modernize their front-end systems.
costs comparing online and offline
CostsComparing Online and Offline
  • Offline (Gary/Jason)
    • Agency
      • Cards: $3.00/card
      • Terminals:
        • $12,000/lane (over three years)
        • Retailer owned and maintained
        • $4.8 million total (assuming 2 terminals at necessary locations - spread over three years)
      • Clinic Terminal: $80/clinic
      • Development/Support: Minimal – use USDA-owned technology. Already developed and proven
    • Retailer
      • New development: $30,000-$50,000
      • Implementation for current operators – minimal.
  • Online (Reed)
    • Agency
      • Cards: $0.50 - $1.00
      • Terminals:
        • $600/lane (per year)
        • State-owned and maintained
        • $800,000 per year (assuming 2 terminals at all locations and 1 phone line per location)
      • Development/Support: $1.00-$1.50/household per month
    • Retailer
      • New development: $500,000 - $1,000,000
      • Per transaction processing fee
      • Implementation for current operators – N/A.
integration comparing online and offline
IntegrationComparing Online and Offline
  • Offline (Amy/Jennifer)
    • Successful integration statewide for 2,500 retailers Texas, New Mexico, and Wyoming
    • 2008 Wyoming (90 vendors) integration was smooth and uneventful
    • Cherokee Nation
    • A few ongoing ankle-biting issues; nothing that outweighs the general success story in these states.
  • Online (Reed/Amy)
    • No successful integration effort in any state
    • Variations result in unnecessary costs and hurdles
    • Ongoing blunders by state processors continue to hamper developments.
      • Washington
      • Michigan
      • Nevada
      • Kentucky
    • Bottom line – it still doesn’t work: anywhere.
interoperability comparing online and offline
InteroperabilityComparing Online and Offline
  • Offline (Jason)
    • Texas/New Mexico/Wyoming system is fully interoperable
    • In times of natural disaster, recipients can redeem benefits in relocation states.
  • Online (Reed)
    • No two online systems are alike – all are proprietary.
    • Currently no way to support variant online WIC EBT solutions at the same POS.
    • Message formats for different processors might preclude interoperability altogether.
communication issues comparing online and offline
Communication IssuesComparing Online and Offline
  • Offline (Amy/Jennifer)
    • No need to communicate back and forth with the host
    • If stores have power WIC clients are served
    • Batch submission at the end of the day
    • Disruptions in communication infrastructure don’t interrupt transaction processing.
  • Online (Reed)
    • Must have connectivity through (at minimum) two gateways.
    • Most complicated online transaction ever attempted
    • Message sizes 10-20 times larger than other online transactions
    • Outages have increased in Michigan following implementation – impacting both SNAP and WIC
training issues comparing online and offline amy jennifer
Training IssuesComparing Online and Offline (Amy/Jennifer)
  • Offline
    • Standard register training mode
    • Cards loaded with benefits work for training
    • Training transactions simply not submitted for settlement
  • Online
    • No host training box
    • Requires a large development to implement useful training
    • Retailers must develop a testing environment unique to online eWIC.
    • “Dummy” cards can be provided
conclusions arkansas retailers recommendation jamie mike
ConclusionsArkansas Retailers’ Recommendation (Jamie/Mike)
  • Ultimately, each WIC agency needs to choose a platform that works for them.
  • Important considerations:
    • Service to our customers
    • Costs
    • Likelihood of success