Information and Recommendations for Farmers’ Markets Organizations and Direct Marketing Farmers/Producers
Information and Recommendations for Farmers’ Markets Organizations and Direct Marketing Farmers/Producers DATE: SEPTEMBER 30, 2010 Minnesota Department of Agriculture, 651-201-6494 625 Robert Street, N., St. Paul, MN www.mda.state.mn.us How to Implement SNAP and EBT Into Your FARMERS’ MARKET Authored by Amanda Baesler, Minnesota Department of Agriculture Reviewed by Kari Dunn, Rochester Farmers Market and Madeline Kastler Local Foods Institute for Agriculture and Trade Policy Thank you for your interest in learning more about implementing Electronic Benefits Transfer (EBT) for recipients of food stamps through the Supplemental Nutrition Assistance Program (SNAP). The Minnesota Department of Agriculture created this manual through support from USDA’s Specialty Crop Block Grant Program. This is a user-friendly, how-to manual for farmers and farmers’ market managers interested in accepting food stamp SNAP/EBT cards at farmers’ markets. Table of Contents • Glossary of EBT and Food Benefit Related Terms...........................................................4 • How Do SNAP and EBT Work? ....................................................................................6 • Why Should a Farmer or Farmers’ Market Offer EBT? ...................................................7 • Benefits of EBT..............................................................................................................7 • Guidelines to Determine if Your Market is Ready for EBT..............................................8 • Deciding to Use EBT/Debit/Credit.................................................................................10 • How to Use EBT Technology to Accept SNAP Benefits..................................................10 • How to Apply to Accept SNAP and Use EBT.................................................................11 • Processing Electronic Transactions.................................................................................14 • Purchasing a POS Machine...........................................................................................16 • How Should a Farmers Market Implement the EBT System............................................17 • Good Record keeping Practices When Accepting SNAP Benefits..................................20 • Manager Checklist.........................................................................................................22 • How to Communicate the New EBT System to Customers of the Market.......................23 • How to Reach Out to New Customers..........................................................................23 • Appendix I- Additional Information...............................................................................24 • Appendix II - Tips for Farmers’ Markets Filling Out the Retailer Application..................26 • Appendix III - Sample Press Release..............................................................................28 • Appendix IV - Sample Market Day Transaction Daily Redemption Report.....................29 • Appendix V - Sample Vendor Agreement Form.............................................................30 • Appendix VI- Scrip Example..........................................................................................32 • Appendix VII - Vendor Information Sheet......................................................................33 • Appendix VIII - Sample Log and Transaction Report......................................................34, 35 3 Glossary of EBT and Food Benefit Related Terms --------------------------------------------------------------------------------------------------------------------------Access Card A generic term which refers to the physical card used to access a commercial or EBT card system. In the on-line EBT “transaction” or “application”, recipients use magnetic stripe cards at POS terminalsorATMstoaccessthesystem.Intheoff-lineEBT “transaction”or“application”,recipientswilluseintegratedcircuit(IC)cards(alsocalled“smartcards”) toaccessthesystem. Account Afoodstamporcashaccount. Authorization An affirmativeresponseby, or on behalf of, the issuing member to a request to permit a card or card account to be used in a transaction. No posting to an accountoccursforanauthorization. Balance Inquiry A non-financial transaction that permits the cardholder to obtain the current balance of his or her account. Batch Receipts AprintoutfromtheEBTterminalofthedailytransactionsatthecloseofmarket.Eitherthestateorthird party vendor will provide instructions for printing thebatchreceipts. Clearing Account An account maintained for the purposes of settlementandpaymentoffees. Food and Nutrition Service (FNS) TheFoodandNutritionServiceoftheUnitedStates Department of Agriculture. Food Stamp Program (FSP) The government benefits program operated undertheauthorityoftheFoodStampActof1964, as amended. Off-line An EBT system or transaction in which individual purchases are authorized without telecommunicationbetweenthePOSdeviceorATMandacentral database.Inanoff-lineEBTsystem,dataonrecipient account balance is maintained on the access card,andpurchaseauthorizationonlyrequirescontact between the card and local device. In an online EBT system, an off-line transaction requires a manualvoucher. On-line AnEBTsystemortransactioninwhichauthorization ofindividualpurchasesrequirestelecommunication betweenthePOSdeviceorATMandacentraldata base in which data on account balances is maintained. Personal Identification Number (PIN) Analpha-numericcodeselectedbyorassignedto therecipientandusedtocontrolaccesstoindividualaccounts.ThePINmustbeenteredonakeypad beforeanytransactioncanbeprocessed. Point of Sale (POS) Typicallyusedtorefertoequipment(e.g.,terminal, PIN pad and printer) deployed at a retail location Electronic Benefit Transfer (EBT) andusedtoinitiatetheelectronicdebitofarecipient A system that uses electronic funds transfer, auto- account and credit to the retailer’s account. These matedtellermachinesandpointofsaletechnology machinesdonotdispensecash.WhenPOSincludes forthedeliveryofpublicassistancebenefits. cashback,themerchant,notthemachine,dispensesthecash.Thisdeviceisusedtoswipeeitherthe Farmers’ Market Nutrition Program (FMNP) EBT/CreditorDebitcards.Markettransactionsare Afederalnutritionassistanceprogramthatprovides carried out with either tokens or vouchers that are low income women, children and seniors with a exchanged at the central POS station. The device limitednumberofcouponstopurchasefruits,veg- canbewirelessoruseaphoneline. etablesandherbs. 4 Receipt In commercial networks, a hard copy description of a transaction that took place at an ATM or POS, containing at minimum date, merchant name and location, type of account accessed, amount, reference number, and an action code. In EBT systems, receipt must include the balance remaining in the account after the current transaction has been processed. Surcharge AfeeaddedtoatransactionbyanAcquirer,TerminalOperatororMerchantforatransactioninitiated at a Terminal. TANF TemporaryAssistanceforNeedyFamilies Third Party Vendors VendorsthatsellandprovideservicesforEBT/Credit/Debit machines. They often charge a monthly transaction and processing fee for their equipment and services. Scrip Scrip is any substitute for currency, which is not legal tender. It is money which can only be used with one company, association or group of companies. At the farmers’ market this is usually in the form of USDA tokens or vouchers. UnitedStatesDepartmentofAgriculture Settlement Process by which funds (i.e., debits and credits) are transferred between any two processing points in the flow of an electronic financial transaction. These include: between financial institutions participating in the network; and, between the financial institution and the merchants for whom it acts as an acquirer or “sponsor.” Vendor Theentitywithwhichagovernmententitycontractsfortheimplementation,maintenanceand operation of an EBT program. SNAP Supplemental Nutrition Assistance Program formally known as food stamps. 5 How Do SNAP and EBT Work? --------------------------------------------------------------------------------------------------------------------------The Supplemental Nutrition Assistance Program (SNAP) (formerly the Food Stamp Program) is the federal government’s largest nutrition assistance program for limited-resource families. The program provides monthly benefits for eligible participants to purchase food items at approved retail outlets. This program formerly used paper coupons which were issued to each program recipient to present to participating retail food vendors. In order to make this program more efficient, the federal government has developed an electronic alternative. Essentially, food stamp recipients will use an electronic debit card, EBT, instead of paper coupons to purchase food. The food stamp, or SNAP office will issue an EBT card once an individual is accepted into the program. They can take the card to any grocery store, food retail outlet or farmers’ market that accepts electronic food stamps and use it to buy food. At the check-out stand, the EBT card is used just like a bank debit card. The card is swiped through a slot in a machine at the check-out counter called a “point of sale” (POS) machine. The EBT system will automatically deduct the cost of the food or tokens/vouchers purchased from the recipients monthly food stamp benefit account and provide a receipt stating the balance of the account. The food stamp office notifies recipients on which day of the month their benefits will be available and automatically deposits benefits in the SNAP system each month. The funds are available to the recipient at that time. SNAP regulations provide for manual transactions as a back up when the SNAP system is down. USDA permits retailers to choose when to use the manual system if the electronic system is down. Operating an EBT machine requires a Food & Nutrition Service (FNS) license. FNS allows markets to obtain a single FNS license to include all eligible vendors at the market. SNAP benefits are redeemed using a POS terminal; transactions are processed throughout the farmers’ markets using scrip (paper certificates, tokens, or receipts). SNAP customers redeem their benefits by swiping their EBT cards at the POS terminal in exchange for scrip, which they can use to buy eligible food products. This process is similar to one sometimes used for accepting credit and debit cards at farmers’ markets. While it is possible for individual vendors to have their own FNS license and POS terminal, scrip projects are the most common way for farmers’ markets to accept SNAP benefits. Recipients with food stamp benefits can use their EBT card for eligible food purchases at most grocery stores, some other retailers and participating farmers’ markets. Food stamps can only be used for food and for plants and seeds to grow food. • Eligible items: Fresh fruit, vegetables, meats, dairy products, eggs, breads, jam, pickles, pastries, plants or seed to grow food to eat. • Ineligible items: Any nonfood item, such as pet foods, soaps, paper products, household supplies, grooming items, toothpaste, cosmetics, alcoholic beverages, tobacco, vitamins or medicines. 6 Why Should a Farmer or Farmers’ Markets Offer EBT? --------------------------------------------------------------------------------------------------------------------------By accepting SNAP benefits at farmers’ markets, the market, the community, and the SNAP participant are benefited. Farmers and vendors at the market can see an increase in sales and the market can see an increase in the number of customers. Additionally, low income consumers will have better access to locally grown, nutritious foods. In communities without supermarkets, a farmers’ market may serve as the only available source of fresh fruits and vegetables. In addition to fruit and vegetable producers, farmers who sell foods such as meat, milk and milk products, and baked goods may also accept SNAP benefits. Benefits of EBT ---------------------------------------------------------------------• Replaces paper food stamps and checks • Safer and more secure than carrying cash or checks • Convenient and easy to use • Increases the demand for locally grown fruits and vegetables and other farm products • Demonstrates that shopping at a market is affordable, easy and fun • Provides a long-term incentive that will change shopping habits and results in a change in dietary habits • Increases sales for farmers as customers are not limited to the amount of cash they carry • Increases the number of markets in the SNAP/EBT program, providing greater access to local foods for SNAP customers Farmers’ Market EBT projects have shown that some locations and food stamp recipients are a viable market segment for farmers’ market vendors. The factors that can determine the likelihood of attracting food stamp recipients are: 1. Being located in or within walking distance of low income neighborhoods 2. Having strong community involvement to support the program 3. Having education and promotion programs for SNAP recipients, markets and vendors 4. Having a leader in the market or in the community that is committed to the project 5. Having support from the local, state and businesses 7 Guidelines to Determine if Your Market is Ready for EBT ------------------------------------------------------------------------------------------------------------------------The following are general guidelines to help you determine if your market is a good candidate for taking on SNAP. To succeed with SNAP and EBT cards, a market should have: 1. Sufficient Supply and Demand Number of food stamp recipients in a county and adequate selection of fresh produce. While there is a great need across the state for low-income people to have easy access to locally grown, fresh food, the cost of an EBT system might outweigh the benefits. If your community does not have a sizeable food stamp population and/or if your farmers’ market size does not allow for a sufficient quantity or variety of product, the time may not be right for your market to implement EBT. WHAT CONSTITUTES “ENOUGH” FOOD STAMP RECIPIENTS? There is no absolutely right number. To find out about the number of food stamp recipients in your community, contact the Minnesota Department of Human Services at 651-431-2000. It is important to try to give this program as much chance for success as possible. The number of people served is only one measure of success, and it is certainly not the only thing to take into consideration. Sometimes it will depend on which other area markets have EBT, how involved a community might get, who the community partners might be, what the prospects for long-term sustainability of the program might be, etc. WHAT IS “SUFFICIENT QUANTITY OR VARIETY” OF PRODUCE? As a general rule of thumb, a market should, at peak season, have at least 10 produce vendors EACH of whom has at least eight varieties of produce. 2. Dedicated Staff Staffing is a critical component to this program. The person who runs the SNAP/EBT program cannot also be a vendor at your market. The person in charge of EBT can be a market manager. The EBT manager, the market manager and the vendors all have responsibilities to make the EBT system work. EBT STAFF RESPONSIBILITIES • Filing the application with FNS. It is critical that the person responsible for EBT is willing to submit their social security number to FNS. • Caring for the EBT machine once it is delivered (including secure storage and charging system as needed). • Tracking the tokens that are taken to market and used as “bank.” • Handling EBT transactions at market, and troubleshooting any glitches in the system (contact with terminal leaser/customer service, as needed). • Helping the market manager inform growers how to work with the token system. • Meeting the scheduled reimbursement dates, requesting checks or cash from an authorized staff member, and reimbursing growers for tokens. • Distributing authorized vendor signage to vendors. 8 • Entering transaction records into an excel sheet or other accounting program after market. • Recording how many tokens you redeem from each vendor each day and the total number of tokens redeemed each day. • Reconciling the bank statement with EBT print outs. • Providing transaction records to the Human Service Department as needed. FARMERS’ MARKET ORGANIZATION RESPONSIBILITIES • Becoming licensed to accept SNAP benefits by FNS. • Designing and providing tokens or paper scrip. • Training farmers in scrip redemption rules and procedures. The market’s ability to accept SNAP benefits could be jeopardized if a farmer commits a SNAP violation while operating under the market’s FNS license. • Creating signage for authorized vendors, as a customer reference. • Developing an accounting system and method for reimbursing vendors. • Training staff in scrip redemption rules and procedures. • Determining a secure place where the POS equipment, tokens and supplies will be stored when not in use and who will be responsible for proper storage. FARMER/VENDOR RESPONSIBILITIES • Selling only eligible items when purchased with EBT tokens. • Turning in paperwork/tokens to market manager for reimbursement. • Reading and understanding the rules; asking questions of staff prior to misunderstandings. • Posting signage at stall that designates vendor as authorized for EBT program. 3. Desire To Make This Happen We all know market managers already have plenty to do, so taking on a new program like this, even if it is just in a management role, is not an easy task. Consider whether or not you have support staff for this project; look at resources to fill this need, if not. Really think about whether you have the time and energy to make this happen in your community. It is also important that the farmers are supportive of the program and are willing to be educated on how to use the system and how to be sensitive to their changing customer base. For more information on FNS SNAP retailer eligibility requirements, please visit: www.fns.usda.gov/snap/retailers/store-eligibility.htm. 9 Deciding to Use EBT/Debit/Credit --------------------------------------------------------------------------------------------------------------------------Accepting SNAP benefits at farmers’ markets calls for a well-thought-out business plan, this would need to consider the initial set-up costs, ongoing operating and labor costs for administration and for promoting and marketing the program. The market will spend a good deal of time up front developing the infrastructure (equipment, staff time, and additional accounting procedures). Wireless POS terminals can cost nearly $1,000 to install and program, and there will be operation costs. Many expenses (monthly wireless network service, transaction fees, and labor) will exist for the life of the program. It may take a few years for SNAP redemptions to justify programmatic costs, so it is important to have realistic expectations about how quickly SNAP and credit card sales will grow. Individual vendors can accept SNAP benefit cards and/or debit/credit cards at their stands. Another alternative is that the farmers’ market accepts SNAP as a collective organization. The market would have a centrally located place where EBT cards would be accepted. How to Use EBT Technology to Accept SNAP Benefits --------------------------------------------------------------------------------------------------------------------------Implementing a scrip project is the most common way for farmers markets to participate in SNAP because it allows multiple vendors at a market to accept SNAP benefits without having to obtain individual SNAP licenses and POS terminals for each vendor. Instead, the farmers market gets one SNAP license and uses an alternate form of currency (paper scrip or tokens are the most common) to complete the transaction between individual vendors and SNAP customers, using a single POS terminal. Scrip can also be used to accept bank-issued credit and debit cards when there is a single POS terminal in use. Vendors process the scrip currency the same way—whether or not the shopper is making an EBT or a debit/credit card purchase—which can help lessen the stigma sometimes associated with using SNAP benefits. The market is responsible for the design and cost of the scrip. HOW ARE SNAP PURCHASES MADE IN FARMERS MARKETS THAT OPERATE A SCRIP PROJECT? There are many types of scrip that can be used: paper scrip/tokens or receipts. Markets can either swipe the SNAP customer’s EBT card on a central POS terminal, or they can fill out a paper voucher to redeem SNAP benefits in exchange for scrip/tokens or receipts. Regardless of the system used, the deposit is made directly into the market’s bank account within 2 business days after the purchases are entered into the POS terminal. The market then follows its own procedures for reimbursing vendors. OPTION 1 Using Scrip or Tokens 1. A SNAP customer swipes the EBT card at the central POS terminal. 2. The staff person enters the amount of scrip or tokens requested into the terminal. 3. The SNAP customer enters his/her PIN. 4. Once the transaction is approved, the SNAP customer is given a transaction receipt and scrip or tokens. 5. The SNAP customer then uses the scrip or tokens at any participating vendor’s stand to purchase eligible items. 10 OPTION 2 Using Receipts 1. A SNAP customer shops at a vendor’s stand and receives a receipt from the vendor for food items purchased, and then leaves the purchased items with the vendor. 2. The SNAP customer goes to the central POS terminal without the purchased goods to swipe the EBT card for the amount on the vendor’s receipt and enters the PIN. 3. Once approval is granted, the manager gives the customer another transaction receipt to confirm payment, which the customer brings back to the vendor to retrieve the purchased items. OPTION 3 Manual Vouchers Farmers markets without a POS terminal, or those that use an off site terminal, can employ manual vouchers. Manual vouchers are also used if a SNAP customer’s EBT card or the EBT system is not functioning. Manual vouchers can be used with scrip, tokens, or receipts. 1. The market staff calls a customer’s EBT card number into the retailer EBT customer service number for transaction approval, placing a hold on the customer’s SNAP account for the amount of the transaction 2. The staff member records the transaction on a manual voucher that the customer signs, as well as in the market’s log book for bookkeeping. 3. The next step depends on whether the market has an off site POS terminal: a. If it does, the manual vouchers are keyed into the off site terminal for processing at the end of the market day. b. If the market does not have a POS terminal, the manual vouchers are mailed to the State’s EBT contractor. Markets generally have 15 days to mail in the vouchers. The direct deposit into the market’s bank account occurs within 2 business days after the EBT contractor receives the vouchers in the mail. How to Apply to Accept SNAP and use EBT --------------------------------------------------------------------------------------------------------------------------- STEP 1 Make Sure You Qualify as a Farmers’ Market or Direct Marketing Farmer A farmers’ market is defined as a multi-stall market at which farmer/producers sell agricultural products directly to the general public at a central or fixed location. Typical products are usually fresh fruits and vegetables, but can also include meat products, dairy products, and/or grains. Individual farmers/farms that are directly marketing product to the consumer may also apply. These are individual producers of agricultural products, particularly fresh fruits and vegetables, as well as meat, dairy, and/or grains, that are sold to the general public through a direct marketing venue such as a roadside farm stand, pick-your-own operation, and/or market stall within a farmers’ market. 11 STEP 2 Apply for a Permit Each state has a USDA Food and Nutrition Officer designated to approve the food stamp retailer permits. You can apply online to become authorized to accept SNAP benefits at your farmers’ market or stand. Applying to accept benefits at your market is a simple three step process: 1) get a USDA account, 2) fill out an application online, 3) mail in your supporting documentation to complete your file. To apply online you first need to set up a user name and password. Go to www.fns.usda.gov/SNAP/ebt/ fm.htm which is the home page. Second, activate a USDA eAuthentication account. To create an account, click on the “Set Up An Account” link at the following web address, http://www.fns.usda.gov/snap/ retailers/register.htm. You must have a valid email address as USDA will send you a confirmation email. Once you receive the email, it includes a hyperlink to activate your account. If you do not have internet access or prefer a paper application, call the toll-free hotline at 1-877-823-4369. STEP 3 Fill out the Application Filling out the online application is fast, easy and convenient. You can start and stop the application process at any time. You have up to 30 days to complete and submit the online application to FNS. Be prepared with the following information ahead of time: 1. Bank Account 2. Owners information 3. Social security number, copy of a photo ID, and estimated sales 4. You will also need to indicate how you will accept SNAP benefits and EBT cards at your farmers’ market. Each market needs to determine if it will process only EBT cards for SNAP, or if it will also accept debit or credit cards from its customers. Eligible products and EBT fees are different for each of these options. Again, it’s important that each market evaluate the demand for EBT and debit/credit card transactions. 12 EBT FOR SNAP ONLY EBT for SNAP only means that your market will accept the EBT cards under the regulations of the federal food stamp program. Any market customers that do not have SNAP benefits would have to pay cash or write a check for each transaction. PROS • No service fees are attached to using electronic SNAP payments over cash transactions. • Vendors need very limited education to implement the program. CONS • Many consumers use only their credit or debit card for payment. • No potential revenue stream from service fees to card users. • SNAP benefit recipients may feel more conspicuous being the only customers using electronic payment. DEBIT/CREDIT TERMINAL This option requires adding the EBT for SNAP function to a terminal already in use for accepting debit/ credit transactions. PROS • The terminal may expand the customer base because all income groups can use electronic transactions. • SNAP benefit recipients may feel less conspicuous as other consumers are using electronic payment. • The market may be able to offset terminal lease and finance charges by charging a usage fee. CONS • Terminal service fees and transaction fees may apply to non-EBT transactions. • Higher start up cost than a SNAP only terminal. • SNAP transactions and debit/credit transactions must be tracked separately. • Vendors need education on rules of accepting SNAP EBT transactions versus debit/credit transactions. Visit the following website to register: https://eauth.sc.egov.usda.gov/eAuth/selfRegistration/selfRegLevel1Step1.jsp 13 NOTE: The application process is the same for farmers’ market organizations as it is for individuals. A member of the market’s board should submit the application. The market bank account information goes on the application; however, the application must include the name of a contact person whose name will then appear on the permit. The designee will become the contact person for all correspondence from FNS and the person who receives the POS terminal if the market chooses that option. The primary contact to assist farmers’ market and respond to their questions about becoming an approved retailer is Robin Masters. Robin’s contact information is: [email protected] Phone: 317-510-7226 Field Office staff in our local offices can also provide service. STEP 4 Complete Your Application. To complete your application, send all required documentation to your servicing FNS office. A list of required documents and your servicing FNS office is provided during your online application process or in your application packet if you prefer to apply via paper. FNS may take up to 45 days to process an application once it’s completed. What happens after the FNS application is approved? • FNS will send a training manual to the farmers market. Additional guidance is available at: www.fns.usda.gov/FSP/retailers/pdfs/Retailer_Training_Guide.pdf. • FNS notifies the State EBT contractor. (Each State contracts with an EBT contractor who is responsible for SNAP EBT services in that State.) • The EBT contractor will contact the farmers market to determine POS equipment needs. Processing Electronic Transactions --------------------------------------------------------------------------------------------------------------------------The ways to process EBT cards with each requiring different equipment. 1) Standard POS Terminal A standard POS terminal is what you see in any retail store at check-out lanes. The terminal records card transactions and generates a batch total report of transactions at the close of each market day. A standard POS terminal requires a source of electricity and a land-based telephone line. Most telephone companies will install an interface box at market locations if there is a nearby telephone pole or building. GETTING A FREE POS DEVICE Most states offer to provide a free wired POS device to most SNAP retailers. States usually require that the retailer has, or expects to have, a minimum amount of SNAP transactions (typically $100 a month) to get and keep the free POS device. If a farmers’ market is interested in receiving a free POS device, it must complete the EBT Retailer Agreement that you will receive in the mail. Once a complete contract is received by the State’s EBT vendor, they will provide a POS device to qualified retailers. The free POS device will be a “wired” device needing an electrical connection and a hard-wire telephone line. It will only process EBT cards. It will not process debit or credit cards. 14 PROS • Theseterminalsarereliable. • Moststatesmayprovidethemfreewith no service charges if you have $100 or more in sales. • Theterminalmaybemovedandusedat your farm stand if you have one. CONS • Itrequiresatelephoneline. • Itrequiresanelectricaloutlet.Aportable generator and car battery also works. • Transactionfeesandservicechargesapply. States will most likely not cover a wireless device and will only cover EBT transactions not credit or debit. IF YOU WANT A POS DEVICE WITH OTHER CAPABILITIES Another option is to contract with a third party processor. For a fee, these companies will provide a POS device that accepts debit and credit cards as well as the State’s EBT benefits card. You can also purchase or lease a POS device on your own and enter into a contract with a third party processor just for their processing service. If you choose to process debit and credit card transactions, additional fees will apply. However, accepting debit and credit cards does have the potential to substantially increase your sales. An option for farmers’ markets without access to electricity and telephone lines is using a wireless POS device. Most States do not offer wireless machines free of charge, so your farmers’ market would need to get the device through a third party processor. Wireless POS devices from third party processors can handle debit and credit card transactions in addition to EBT transactions. Information about third party processors and/or various POS devices for sale is available on the Internet. Additional sources of information are other farmers’ markets that have contracts with third party processors or your State grocers’ association. It is wise to shop around and ask about all fees as prices can vary greatly. The third-party POS provider that sells or leases the machine will set up an account to automatically transfer funds from the customer’s account to the market’s account. In addition to a monthly handling fee, each transaction that occurs will also have a swipe fee. 15 2) Wireless POS Terminal A wireless POS terminal functions in the same way as a standard POS terminal except that it can be used anywhere the service provider has a signal. It uses cell-phone technology and works on a battery or with an AC adaptor. Many service providers include an extra battery or have them available for purchase. PROS • These terminals are reliable. • It can be used at the farmers’ market or at the farm stand. • It doesn’t require a land line or electricity. • It’s portable. CONS • It may be expensive to purchase, or lease. • Transaction fees and service charges apply. • The printer needs frequent paper replacement. Purchasing a POS Machine --------------------------------------------------------------------------------------------------------------------------There are many vendors that sell or lease POS machines. On top of that cost, fees are generally charged per transaction. The cost of purchasing a machine can range from $700 to $1,500. Vendors will want to shop around for best prices. An inexpensive machine will often have higher service fees, so be thorough in your price comparisons. The market will be responsible for all service/lease, card provider and transaction fees. If you agree to accept credit cards, you are signing a contract with a processor. An example of the fees charged for using their services are listed below. 1. A percentage fee -- the amount of money charged multiplied by a percentage fee (e.g., 1.79% credit cards or 1.49% check cards x $ charged, estimate only). 2. A transaction fee -- the amount charged each time a transaction is processed (e.g., 25 cents x each transaction, estimate only). 3. A monthly settlement fee -- the amount charged each month for settling the account (e.g., $10.00 per each month for settling the account, estimate only). 4. A monthly wireless access fee -- $12.00 charged each month for using the wireless system (estimate only). 5. A monthly minimum usage fee -- $25.00 charged each month, which is deducted from the percentage fee. 6. An account termination fee -- if the account closes in less than 3 years estimated cost are (1 to 12 months - $295.00, 13 to 36 months - $195.00). 16 The equipment costs will vary, depending on which model you choose. The most popular equipment used in a land line model currently costs $375.00 + tax (estimate only). The most popular equipment used in a wireless model is $795.00 + tax (estimate only). The equipment can be purchased new or used, and in most cases it can have a free placement with a $25.00 monthly usage fee. This fee is applied to the monthly usage percentage fee. If the amount of the monthly usage percentage fee exceeds the minimum usage amount then the equipment is truly free to use. 3) Manual Vouchers Manual vouchers can be used instead of a POS device. This method is the most cost effective when you have very low SNAP sales (less than $100 a month) or you do not have a way to connect a POS device to an electrical outlet and a telephone line. A manual voucher is filled out for each transaction and completed vouchers are mailed to the processor for payment. 4) A Third Party Processor PROS • You don’t need to bring equipment to the market except for a cell phone. Transactions can be entered on a POS terminal at home at the end of the day. • Less expensive than other methods. CONS • The transaction takes a few minutes longer to complete. • Calling in all transactions at the end of the day runs the risk that customer benefit funds may no longer be available. Markets can accept EBT payments in several ways. The USDA Web site http://www.fns.usda.gov/snap/ebt/fm-script-EBT_equipment.htm has a list of EBT farmers’ market projects with specific information on accepting payments. How Should a Farmers’ Market Implement the EBT System? --------------------------------------------------------------------------------------------------------------------------Each market needs to decide how it will accept SNAP payments. Each individual vendor may have their own equipment to process EBT payments. When it is not practical for individual farmers to obtain an FNS license to accept SNAP using their own individual point-of-sale (POS) device, a farmers’ market sponsor can step in by getting one license that allows all eligible farmers in the market to accept SNAP benefits using one centralized POS device. This works well for enclosed markets; open markets risk the possibility that customers could visit several vendors and not pay at the central location. When a market decides to use a centralized card reader for debit/credit and/or SNAP transactions, typically the market will implement a “scrip” system. SCRIP Scrip is a non-monetary currency used at the market to make purchases from vendors instead of using cash or EBT cards. Scrip has a set denomination usually $1, $5 or $10. The scrip must not be able to be easily counterfeited. 17 THERE ARE TWO BASIC SCRIP SYSTEMS • Paper scrip- or Market Bucks A paper currency developed to be used like cash in a specific market. Paper scrip should be designed with the market name prominently displayed. Sequenced serial numbers on all scrip are strongly advised. Market bucks are easier to counterfeit, but it is possible to avoid this problem by using watermarked paper. Use of non-photocopy-able paper is required. • Tokens Tokens are generally wooden or plastic. The tokens should be printed specifically for each market. It is recommended that markets design one side of each token with the market logo or name and a value amount, and the phrase NO CASH VALUE on the other side. Since tokens are more difficult to duplicate than paper, they are more secure. Tokens may be purchased online from a number of vendors. Prices vary depending on style and color. It is advised to request an agreement with the manufacturer of the tokens that no other parties be authorized to commission the printing of tokens with your farmers market name on them. Tokens travel generally from the market tent to shoppers and vendors, the vendors then give them to the market staff. It is the duty of the market manager or authorized staff to keep records of transactions. PURCHASING MARKET TOKENS Tokens are easy to use and make shopping at the market fun. Since tokens are more difficult to duplicate than paper, they are more secure. Tokens may be purchased online from a number of vendors. Prices vary depending on style and color. The tokens should be printed specifically for each market. It is recommended that markets design one side of each token side with the market logo or name and value amount, and the phrase NO CASH VALUE on the other side. It is recommended using $2 tokens for SNAP and $5 tokens for debit and credit. The debit and credit tokens should be similar but differentiated from the SNAP tokens. You can do this by using different colors, and having “EBT” or “CC/DEBIT” printed on each series. Tokens can only be used at the market where they were purchased, so markets should put their name or logo on the tokens. SCRIP RULES • Only eligible food can be purchased with scrip purchased with SNAP benefits. • No cash back can be given to SNAP customers. The sale must be for the exact amount of the scrip or the customer can make up the difference with cash. • The customer must be able to get a refund back onto his/her EBT card for unused SNAP scrip. • EBT accounts may also contain non-SNAP cash benefits. Scrip issued in exchange for these cash benefits, such as TANF, can be used to purchase non-food items and is not subject to the above rules. However, scrip issued for SNAP benefits must be distinct from scrip issued for cash benefits. HOW THE SCRIP SYSTEM WORKS Now, that you have your scrip produced, how do you process the transactions? The market designates a central location where SNAP customers may purchase the amount of scrip they want. This location should be well marked so that customers can easily find it. It’s recommended that you label your scrip location as an information booth or something equally neutral especially if you are a SNAP-only EBT market. This way, customers will not feel singled out. A staff person must be trained to operate the scrip system. The EBT terminal operator swipes the card for the total dollar amount of purchases the customer chooses for that day, records the approval code for the “sale” and issues the scrip to the customer in that same amount. 18 Customers then spend their scrip at any food vendor using it just like cash. There are different spending rules for SNAP benefits versus debit/credit purchases. If a SNAP benefits customer doesn’t use all of the scrip purchased for the day, they may return to the EBT stall and have the remainder credited back to their SNAP account. Or, he/she may save the scrip to shop at the market the following week. Debit/Credit customers cannot be given a credit to their account. They either have to use the scrip on that market day or hold it for another visit. Markets differ in how they decide to handle vendor reimbursement. Some markets will reimburse their vendors the same day. When a farmer turns in their scrip for the day, he/she signs a vendor token redemption log, and receives a check on the spot. This requires extra money in the market’s checking account to cover the cost until the reimbursement amount is transferred to the market account by the EBT vendor. An alternative system is to place a separate log sheet in an envelope for each vendor at the beginning of each market day. For Markets that find it more convenient and cost effective to reimburse once or twice per month, another alternative is to keep a notebook – with individual vendor forms – where turned in tokens are recorded each Market day, until the designated reimbursement date. At the end of the day the market manager or representative will collect the envelopes, along with the tokens. The following week the vendor will receive a check for the amount of token sales from the previous week. The check can be placed in the vendor’s envelope prior to the market. If this system is used, the check from the last market day of the season should be mailed to the vendor within a week. See Appendix VI for Scrip Example. VENDOR INSTRUCTIONS ON ACCEPTING TOKENS • Vendors will not exchange tokens for U.S. currency with any person except authorized market staff. • Tokens are accepted on par with their cash value, i.e. a $1 token has a value of a $1 bill. • Products will be priced the same for SNAP customers as cash customers. • Do not mail tokens to the market office in an envelope. Damaged tokens will not be reimbursed. Tokens should be redeemed in person. • If there are any questions or concerns about this program, please talk to a designated market staff person. NOTE: The market manager or board member is responsible to train farmers in scrip redemption rules and procedures. ACCEPTING SNAP IN OTHER WAYS The market can use a central terminal where all SNAP customers pay for their goods, with the market reimbursing each vendor separately. • Receipts: Customers get a receipt from each farmer for food purchases, leave their items at the stand, bring the receipt to the centralized POS device to pay for their items with their EBT card, and then return with the paid receipt to each farmer to pick up their purchases. SNAP and debit card service charges have a relatively fixed fee structure and, consequently, it’s easier to project future program costs. Credit card usage fees are based on a percentage of sales which are much less predictable and require more complex accounting. The following documents provide support for the market’s pursuit to add card services. 19 When choosing a provider it is important that the farmers’ market determine what card service fits best. Keep in mind that each company uses different technologies which are not necessarily transferable to other companies. This means that each card service device is specific to that company only. Keep in mind that if you are in a rural area you will need to use a provider that has cell phone service in your area. Below is just a sample not a complete list of vendors that offer services that may be of use to you and your market. FIS-Fidelity National Information Services. For more information email [email protected] or call 800-558-6980 x 3422 Global Payments. For more information visit their website www.globalpaymentsinc.com or call 1-888-876-4093. * MDA does not endorse any specific provider. Each market should research and select a provider that is best suited to their specific needs as each provider has a different financial structures and fees for EBT and Debit/Credit usage. Good Record keeping Practices When Accepting SNAP Benefits --------------------------------------------------------------------------------------------------------------------------Markets that operate a scrip project should keep records of scrip sales. The Appendix section includes sample record keeping forms. Farmers markets typically track: • Amount spent on scrip by customers using each of the different accepted payment types (EBT, debit, or credit cards). • Scrip returned and credited back to the customer’s EBT/debit/credit accounts. (SNAP customers cannot receive change or cash back. All returns must be credited back onto the customer’s SNAP EBT account.) • Scrip turned in for reimbursement by every vendor on each market day. • Monthly and yearly sales reports. MONTHLY ACCOUNTING While there are few accounting records that need to be kept, how a market tracks the flow of money through the system becomes more complex as farmers’ markets add debit and credit card services to their SNAP/EBT services. It’s important that accurate records are kept. Each month the market manager or market SNAP coordinator will receive a statement showing the EBT, debit and credit card transactions from either the third-party POS provider or the state office depending on which device is used. These should correspond to the batch receipts that the machine prints out at the end of each market day. 20 ARE TAXES CHARGED ON SNAP PURCHASES? Some States have sales tax on all food purchases; however, SNAP purchases cannot be taxed regardless of State or local food tax rules. In States where food is taxed, market vendors traditionally fold the tax into the listed price of the food item. However, vendors must deduct the tax from the total price of an item purchased with SNAP benefits. Each state has different tax rates and, in some cases, they vary by counties within States. Check with the state’s farmers’ market association or other designated state agency about obtaining a relevant tax adjustment table that vendors can use when adjusting for SNAP purchases. It is important that each vendor has a record of his/her sales and is reimbursed each week for the amount of the previous week’s sales. Examples of accounting forms and record keeping examples used by other markets are in the Appendix VIII. CHECKING ACCOUNT To have reimbursements automatically transferred, each participating market must have an active checking account. The SNAP reimbursements will be transferred in a lump sum, or batch, to the account usually each weekend. Debit and credit transactions will be transferred according to the card company’s schedule, typically within 48 hours. Checks to the vendors will be written out of this account and distributed according to each market’s operating procedures. VENDOR REDEMPTION Each week a market representative should record the number of tokens distributed to customers, the number returned by the vendors, and the checks written to reimburse the vendors. Remember, the daily batch total of transactions and daily total of tokens redeemed will be different as some tokens are kept by customers to spend another day. ARE VENDOR TRAINING AND AGREEMENTS NECESSARY TO PARTICIPATE IN SNAP? Neither vendor training nor vendor agreements are required by law, but it’s a good idea for market managers to institute agreements and offer training to vendors participating in SNAP so they will know what to expect from the EBT system and what they will need to do to accept SNAP benefits. At least one training meeting should happen before the market’s opening day, giving vendors an opportunity to walk through every step of the process and become familiar with the signage and equipment and the scrip, tokens, or receipts. They will need to understand the reimbursement procedures and record keeping forms that will be used in conjunction with the EBT system. The sample vendor agreement form is listed in appendix V; this will help you explain the program to vendors. Be sure to list eligible and ineligible items, how to record the number of tokens used, how to redeem tokens, and any rules of operation for the program. It is helpful to have the token samples on the agreement form. It should also include instructions on how vendors will be reimbursed for their tokens and receive their money each week. It might be helpful to personally hand out the information sheet to each participating vendor and ask if they have any questions or concerns about the program. This would be another way to ensure that the vendors support the program and that any concerns are addressed. 21 Manager Checklist --------------------------------------------------------------------------------------------------------------------------PRE-MARKET PREPARATION • Make sure that you have all needed supplies • Receipt box - for lost sales notes and paper receipts • Tokens - for EBT and/or Debit • Scrap paper - to record lost sales • Large envelope - for Vendor return tokens • Electronic Card Machine (fully charged) • A good supply of extra paper rolls for machine • Distribute vendor reimbursement envelopes • Put up signage to identify SNAP/EBT service MARKET DAY, BEFORE THE MARKET OPENS • Organize booth and set up equipment. • Hang signage and check that all participating vendors have their signs displayed. • Check in with staff to answer questions and receive feedback. • Review redemption and other procedures with vendors. • Give participating vendors scrip redemption envelopes to store their scrip and completed log for that market day. MARKET DAY, DURING OPERATING HOURS • Ensure that someone is available to answer customer and vendor questions. • Ensure that someone is available to operate the central POS terminal at all times. • Record all scrip that is returned on the Daily Scrip Issuance Log. MARKET DAY, AFTER OPERATING HOURS • Collect vendor reimbursement envelopes, which contain their scrip and log. • Give vendors a receipt for scrip that has been turned in. • Run a batch report from the POS terminal, which is a long paper document showing the day’s transactions. • Reconcile the batch report with all of the receipts, scrip received/returned, and vendor reimbursements. 22 • Record the amount of scrip given out and the amount returned in the daily scrip issuance log. • Complete bookkeeping for vendor reimbursement. How to Communicate the New EBT System to Customers of the Market --------------------------------------------------------------------------------------------------------------------------MARKET SIGNAGE • Place signs within the market to direct SNAP card holders to POS machines. • Have a sign for each eligible vendor to display that shows they accept SNAP/EBT. • Make an SNAP card button for farmers/vendors to wear. • Advertise on local bus and rail systems. • Have local town or county post signs along road leading to market. • Add information about the program to web site and brochures. • Posters/brochures at offices where SNAP recipients receive their benefits. How to Reach Out to New Customers --------------------------------------------------------------------------------------------------------------------------CASE STUDIES AND SUCCESS STORIES • www.fns.usda.gov/snap/ebt/fm-scrip-success_stories.htm • www.midtownfarmersmarket.org • www.ecologycenter.org/ebt The Oregon Farmers Market Association has provided many online resources for participating farmers’ market managers. They have several online templates for accounting, record keeping, and vendor tally sheets. www.portlandfarmersmarket.org/index.php The New York Farmers Market Federation has helped managers with in-person training and an online training presentation. They also provide the managers with a media kit and access to many online forms. http://www.nyfarmersmarket.com/ebt.htm 23 Appendix I Additional Information --------------------------------------------------------------------------------------------------------------------------USDA – FOOD AND NUTRITION SERVICE • General information about farmers’ markets in SNAP. Read the materials at this website: http://www.fns.usda.gov/snap/ebt/fm.htm • To apply to USDA to become an authorized retailer to serve SNAP customers Fill-out the on-line application at: http://www.fns.usda.gov/snap/retailers/application-process.htm • To talk to someone at USDA if you have problems filling out the retailer application [email protected], Phone: 317-510-7226 STATE AGENCY • AFTER you become an authorized USDA retailer, you will automatically be mailed a retailer agreement package by the State’s EBT vendor. If you have not gotten the agreement within 10 days after being authorized by FNS, contact the State EBT Director. If you have a question about how to fill out the retailer agreement, contact the EBT vendor. You must return the application, if you want a free POS device. • Information about wireless POS devices and/or POS devices that accept debit and credit cards. If you do not want the free wired one from the State, you will need to research this on your own. Talk to other farmers’ markets. On the Internet do a search for “credit card processors” or “third party processors” • Talk with other farmers’ markets. On the internet for “wooden tokens” or “coin tokens”. • Problems with your POS Device. Contact whoever gave you the POS device. If it was the State’s EBT vendor, call their help line. If you have a contract with a third party processor, contact them. 24 Website Links for Additional Information --------------------------------------------------------------------------------------------------------------------------USDA- FOOD AND NUTRITION SERVICE WEB SITES Main page for information for farmers’ market in SNAP: http://www.fns.usda.gov/snap/ebt/fm.htm Whatisafarmers’market: http://www.fns.usda.gov/snap/ebt/fm-scrip-what_is_fm.htm On-line Retailer Application: http://www.fns.usda.gov/snap/retailers/application-process.htm http://www.fns.usda.gov/snap/ebt/fm-scrip-what_is_scrip.htm POSDevices(free,wireless)andManualVouchers: http://www.fns.usda.gov/snap/ebt/fm-scrip-EBT_Equipment.htm RulesforUsingScrip: http://www.fns.usda.gov/snap/ebt/fm-scrip-scrip_rules.htm10 Farmers Market Responsibilities related to SNAP: http://www.fns.usda.gov/snap/ebt/fm-scrip-market_responsibilities.htm DebitandCreditCardsIfandIssues: http://www.fns.usda.gov/snap/ebt/fm-scrip-Debit_Cards.htm USDAGrantOpportunities: http://www.fns.usda.gov/snap/ebt/fm-scrip-Grant_Resources.htm Bonus Incentives to Attract SNAP customers: http://www.fns.usda.gov/snap/ebt/fm-scrip-Bonus_Incentives.htm Success Stories: http://www.fns.usda.gov/snap/ebt/fm-scrip-success_stories.htm Eligible Food Items: http://www.fns.usda.gov/snap/retailers/eligible.htm ListofProducts–eligible/ineligibleproductsforpurchaseusingSNAPbenefits: http://www.fns.usda.gov/snap/retailers/generic.pdf 25 Appendix II Tips for Farmers’ Markets Filling Out the Retailer Application --------------------------------------------------------------------------------------------------------------------------Application for farmers markets can be filled out on-line or by filling out a paper application and mailing it in. To fill out the application on-line, go to: http://www.fns.usda.gov/snap/retailers/application-process.htm The website is a two step process requiring the user to register for a user name and password. Be sure to save the website noted above to your favorites, as you will return to that page to complete the process. If you don’t want to use the website, but rather do a paper application, you can request one by calling the toll free number 877-823-4369. HOW DO I FILL OUT THE RETAILER APPLICATION? Below are some typical questions asked regarding completion of the application. If you are a nonprofit cooperative, documentation of nonprofit status must be submitted with the application; i.e. IRS exemption letter or Articles of Incorporation for a Domestic Non-Profit Corporation. QUESTION #10 Type of ownership Select the most specific type that applies to your farmers’ market. Most farmers’ markets are either nonprofit cooperatives, government owned (municipal, town, county), or sole proprietorships. Sole proprietorships would include a loosely connected group of vendors in which there is no legal association, but for which a single market manager is taking responsibility for the group. Here are some common definitions for the ownership types: Privately held Corporation a corporation owned by a few people; shares have no public market Publicly owned corporation: a private company that has a class of shares traded in the public market. Sole Proprietorship business or financial venture that is carried on by a single person and is not a trust or corporation. A sole proprietor (sole owner) has unlimited liability. Partnership form of business organization created by an agreement between two or more persons who contribute capital and/or their services to the organization. Limited Liability Company business form that provides limited personal liability, as a corporation does. Owners, who are called members, can be other corporations. Nonprofit Cooperative organization for the production or marketing of goods owned collectively by members who share the benefits, for example, agricultural cooperative. Government Owned government owned and operated facility for the purpose of providing some goods or service to citizens. This includes city, town, county or municipal ownership. 26 QUESTION #11 Contact info for Parent Corporation How might this apply to farmers’ markets? This question has no application for farmers’ markets and can be left blank – this question pertains to multi store chains or franchises. QUESTION #12 Primary Owners or Major Shareholders or Cooperative Officers If there is a governing board of some sort, is it sufficient to provide information about its officers rather than about each board member? Yes. Provide information on each of the officers. If there are no officers or board members, provide information for the market manager. What about markets that are operated by a municipality? This question is not applicable for farmers’ markets that are government owned. Skip question 12 and go to question 13. Is someone required to provide identification? Yes. Whether they are an officer, board member or a market master, photo identification and documentation of social security number must be received for an individual responsible for the operation of the SNAP benefits program at the farmers’ market. QUESTION #17 Estimate Your Annual RETAIL Sales How do I estimate my annual sales? For a farmers’ market with multiple vendors, ask each vendor to estimate a dollar amount of what they think they may sell in a month, then multiply that by the number of months you are open. Copy of Current License Required to Operate What should I attach? Some municipalities will issue a license to operate a market while others do not. If you have a local business operator’s/seller’s/or vendor’s license you may submit that with your application. If you do not have a local permit, provide a statement that no local permit is required. How long will it take to become authorized? Although we are usually able to process applications more quickly, the USDA Food and Nutrition Service field office has up to 45 days from the date they receive a complete application to approve or deny your application for a SNAP permit. An FNS representative may contact you about additional questions in order to process your application. After I’m authorized, what types of changes should I report to the USDA Food and Nutrition Service Field Office? Retailers must notify the Food and Nutrition Service field office of changes in store (farmers’ market) name, location, responsible party, and telephone number. Any planned change in banking information should be reported to your EBT processor two weeks in advance of the change. This notification is very important to continue the uninterrupted transfer of funds. 27 Appendix III Sample Press Release --------------------------------------------------------------------------------------------------------------------------- PRESS RELEASE Date: Contact: Market Manager_________________, Phone number ### ### ### SHARING MINNESOTA’S BOUNTY A State-wide Celebration of the Farmer’s Market EBT Project As of September 1st, four farmers markets will be accepting food stamp EBT cards. To celebrate this momentous effort, each farmers market will be holding kick-off celebrations on September 8th. While the transition from food stamps to SNAP cards has reduced the stigma associated with food stamps, it has made it difficult for farmers markets and smaller retailers to have the capacity to accept them. Farmers markets are often in locations, such as city streets and parks, which have no phone line to enable them to utilize a Point of Service device to swipe the EBT card. Now four farmers markets in Minnesota have successfully installed a device that enables SNAP card holders to use their benefits to buy fresh, healthy and local foods. The four farmers markets are the __________ market in _________. The ___________ Market will also be accepting credit and debit cards! The kick-off celebrations will include raffles of local crafts and foods, door prizes, cooking demonstrations, and kid activities. “Our customers are anxiously looking forward to it,” says market manager ____________. “The new EBT machines will give them an excellent opportunity in a market that they otherwise would not have had the opportunity to participate in.” For more information about the kick-off celebrations or the Farmers Market EBT Project contact: Market Manager __________________________ ### 28 Appendix IV Sample Market Day Transaction Daily Redemption Report --------------------------------------------------------------------------------------------------------------------------- Date___________________ Day of the Week_______________ VENDOR NAME VENDOR SIGNATURE TOTAL VALUE OF TOKENS REDEEMED FOR CASH INITIALS OF MANAGER/STAFF PERSON REDEEMING TOKENS FOR CASH TOTAL VALUE OF TOKENS REDEEMED TODAY SAMPLE BENEFITS TRANSFER REPORT Month___________________ MARKET DATE & TOTAL EBT SALES DAY OF THE WEEK FROM DAILY REPORT PRINT OUT TOTAL TOKENS REDEEMED BY VENDORS DIFFERENCE (EBT SALES MINUS TOKENS) CUMULATIVE BALANCE OF OUTSTANDING TOKENS 29 Appendix V Sample Vendor Agreement Form --------------------------------------------------------------------------------------------------------------------------Food Stamp EBT Program Vendor Agreement [ASSOCIATION NAME], [MARKET NAME] This agreement is between ___________________________, an association of eligible food vendors (herein referred to as “ASSOCIATION”) organized within [MARKET NAME] and _________________________, an authorized food vendor (herein referred to as “VENDOR”). This agreement allows the above-mentioned VENDOR to participate in the Food Stamp Electronic Benefits Transfer (EBT) Card Program at the [MARKET NAME]. • VENDOR is bound by this agreement to follow all guidelines, as set forth by federal and state authorities and ASSOCIATION. • ASSOCIATION reserves the right to immediately suspend or terminate VENDOR from the program if ASSOCIATION observes, or receives evidence of, failure to abide by any of the agreements below. • VENDOR may voluntarily quit participating in the EBT program at any time, but must notify ASSOCIATION of such action. THE EBT CARD PROGRAM WILL OPERATE IN THE FOLLOWING MANNER: Patrons who have been issued an authorized EBT card may purchase scrip in the form of wooden tokens, up to the amount authorized, from designated ASSOCIATION staff. The patron’s EBT card will be debited for the value of the tokens purchased. Patrons will use the tokens only for purchase of eligible foods from authorized vendors at the ASSOCIATION. Patrons have no time limit on the use of purchased tokens at the ASSOCIATION. Patrons may return unused tokens to ASSOCIATION staff for credit only on the same day as purchase. Credit for the value of these tokens will be returned to the patron’s EBT Card. No patron will be credited for tokens returned above the amount of that day’s purchase by that patron. ASSOCIATION staff will exchange tokens for cash, each market day, only with the designated agent of each authorized vendor, and only when the designated agent presents the appropriate written permit. The only tokens used will be wooden tokens with the unique imprint of ASSOCIATION on each side, with the currency amount also imprinted on each side. The only tokens used will be in 50¢ and $1 denominations. The EBT Program will be strictly and carefully monitored at all times by ASSOCIATION. VENDOR AGREEMENTS: • VENDOR agrees to designate a specific person to be an agent for this program. The designated agent shall be responsible for the vendor’s participation in the program. The designated agent will be the only individual that may conduct EBT token redemptions with ASSOCIATION staff. The designated agent will be provided with a written permit from ASSOCIATION, and must always present it to ASSOCIATION staff when redeeming EBT tokens or otherwise representing the vendor in EBT business. 30 • The designated agent for this vendor is: ________________________. Any change in designated agent must be made by the authorized vendor, in writing, before a different authorized agent will be allowed to redeem tokens. • VENDOR agrees to accept only ASSOCIATION wooden tokens, and will not accept any other market’s tokens and/or printed scrip. • VENDOR agrees to accept tokens only for the purchase of food stamp program eligible foods, including: bread products, produce, meat, fish, poultry, eggs, dairy products, seeds, and plants which produce food to eat. • VENDOR agrees that no U.S. currency will be returned to the customer as change, if payment for product is solely by tokens. The value of the tokens received by VENDOR will not exceed the posted value of the product purchased by the customer. (The customer will receive full value for his or her tokens.) • VENDOR agrees to not exchange any tokens for U.S. currency with any person except authorized ASSOCIATION staff. • VENDOR agrees to post a sign (to be provided by ASSOCIATION) identifying VENDOR’s stall as an authorized EBT vendor. _________________________________ EBT Program VENDOR Agent ________________________ Space Number Date _________________________________ ASSOCIATION Representative [MARKET NAME] ________________________ Title Date 31 Appendix VI A Scrip Example --------------------------------------------------------------------------------------------------------------------------- FOR THIS EXAMPLE, SNAP EBT TOKENS ARE RED AND DEBIT/CREDIT TOKENS ARE GREEN. The Process for a SNAP Benefit Recipient • A customer with a SNAP EBT card decides they will spend $10 at the market. • They swipe their card at the central EBT booth for the amount of $10. **There is no fee to farmers’ market customers for this service. • The customer will get RED tokens valued at $10 to use as currency. A combination of tokens can be given. For this example, the customer gets five $2 tokens. • Customers can then spend tokens in the market at individual vendor stands. Eligible purchases: vegetables, fruit, dairy products, meat, eggs, bread, jam, pickles and pastries. Also, seeds or plants that produce food (i.e. tomato or basil plants) can be purchased. Flowers, shrubs, and other non-edible plants cannot be purchased with RED tokens. • Change cannot be given for SNAP tokens. If a sale is less than the face value of the token, the vendor can add product to the sale to make up the difference. If a sale is more than the face value of the token, the customer can pay with their own change to make up the difference. • If the customer does not use all of their tokens during a visit, the market can either issue a credit to the card or allow customers to use tokens on another day. Cash refunds cannot be given. The Process for a Debit/Credit Card Customer • A customer with credit or debit card decides to spend $10 at the market. • They swipe their card at the central EBT booth for the amount of $10. **For this example, there is no fee to the customer for this service. • The customer will get GREEN tokens valued at $10 to use as currency. For this example, the customer gets one $5 token and five $1 tokens. • GREEN tokens can be used to purchase any item, food or non-food, in the market, the same as cash. • Change for debit/credit tokens can be given in GREEN tokens or in cash, but NOT in RED tokens). • Customers can save tokens to be spent at a later date. Cash refunds will not be given by the market’s EBT manager for unused tokens. 32 Appendix VII Vendor Information Sheet --------------------------------------------------------------------------------------------------------------------------- Food Stamps EBT at the ___________ Farmers Market Vendor EBT/Food Stamp Information Sheet We will start accepting Food Stamps on ____________. Customers will come to your booth with $1 or $2 Market Tokens. You can collect them throughout the day, and return them to the EBT person at the end of the market. You will receive a check the following week for the amount of tokens you collect. The following are some guidelines and rules set by the US Department of Agriculture: • The customer will decide how much they want to spend. • The Food Stamp representative will swipe their card at the EBT market booth and get instant authorization. • Customers will receive either $1 tokens or $2 tokens (or both) and use them at stands that are authorized to accept EBT approved products. • At the end of the market, you can turn in the tokens and will be reimbursed the following week for the total amount sold. Please display your “We Accept EBT Tokens/ Vouchers” sign at your booth each week. These products ARE ELIGIBLE to be purchased with SNAP benefits: • Produce • Dairy products • Meat • Wrapped baked goods • Wrapped cold sandwiches • Vegetable or herb seeds or bedding plant These products are NOT ELIGIBLE for purchase with EBT tokens: • Alcohol • Tobacco • Pet food • Any non-food item • Any food served hot such as coffee or tea drinks • Any prepared food item meant to be eaten on-site, such as ice cream bars, hot dogs, burritos, cinnamon rolls and more NO CHANGE- you may not give change in any amount for the tokens. They will be in $1 and $2 denominations. It is illegal to exchange cash for Food Stamp benefits, so the customer will be encouraged to use the full amount. EBT holders must pay for their purchases at the time of sale. So you may not take payments before they get the items and you may not give them items and accept payment later. IMPORTANT: Your feedback, comments and questions about this pilot will contribute to its success and our ability to help farmers in the region and across the country expands their ability to utilize this system. Violating the rules will not only stop us from being able to accept EBT Cards, but also affect the ease with which other farmers and markets around the region can use them. Thanks for your cooperation and participation. Please contact Market manager Phone # and Email with any questions or concerns. 33 Appendix VIII Sample Log and Transaction Report Market Date and day of week 34 Total EBT Sales from Daily Report Print out Total Tokens Redeemed by Vendors Difference (EBT Sales minus tokens) Cumulative balance of outstanding tokens 35
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