The policy landscape for SNAP and EBT is changing faster than ever. In this series, we break down the latest developments and what they mean for retailers.

Focusing on solutions that work

SNAP fraud is receiving increased news coverage, but payment error rates—often caused by administrative mistakes—are frequently conflated with intentional fraud.

At the same time, a few states have begun blocking online SNAP transactions, even though online purchases have stronger security and traceability controls. Meanwhile, the largest transaction-level threat remains skimming at physical checkout terminals.

What follows are five facts to help retailers separate the headlines from the actual risks—and focus on solutions that work.

1. Payment errors are not fraud. Error rates are receiving attention because new federal cost-sharing rules could make states financially responsible for them. But these rates primarily measure eligibility, calculation and administrative mistakes—not fraudulent transactions. USDA explanation
   
   

2. The largest transaction-level threat is skimming at physical stores. Criminals capture card data and PINs at brick-and-mortar POS terminals and use cloned cards to drain benefits. GAO documented more than $320 million in replaced stolen benefits from October 2022 through December 2024. GAO analysis
   
   

3. Online SNAP is designed with stronger security and traceability controls. USDA requires secure encrypted PIN entry, additional retailer authorization, end-to-end testing and controls on card changes and balance inquiries. USDA requirements
   
   

4. Default online restrictions target the wrong channel. They create legitimate declines and customer confusion without stopping skimming or card cloning—and may push shoppers back toward the physical terminals where theft begins.
   
   

5. Restricting online SNAP runs counter to the program’s direction. Online SNAP has grown from a pilot into essential infrastructure and is now available in all 50 states and D.C. Congress is advancing proposals to make it a permanent nationwide feature, reflecting its necessity in a digital economy. USDA program status | House legislation | Senate proposal
   
   Forage's view: SNAP fraud is real, but restricting online purchasing is neither an effective fraud strategy nor sound public policy. Chip-enabled cards, real-time monitoring, shared fraud intelligence and targeted verification offer a better path.