Public advocates have long argued that shopping innovations like e-commerce and cashless stores marginalize low-income shoppers. In order to shop online, customers need credit cards and bank accounts, and per the Federal Deposit Insurance Corporation, 6.5 percent of households in the US weren’t affiliated with a bank in 2017.
Now Amazon and Walmart are piloting a two-year program that will allow low-income shoppers to pay for groceries online using food stamps.
On Thursday, the US Department of Agriculture announced it had teamed up with Amazon and Walmart to allow participants in the Supplemental Nutrition Assistance Program (SNAP, a.k.a. food stamps) to buy groceries on these sites using their government-allotted benefits.
“People who receive SNAP benefits should have the opportunity to shop for food the same way more and more Americans shop for food — by ordering and paying for groceries online,” Agriculture Secretary Sonny Perdue said in a statement. “As technology advances, it is important for SNAP to advance too, so we can ensure the same shopping options are available for both non-SNAP and SNAP recipients.”
There are currently about 38 million food stamp recipients in the US, according to the USDA. In order to qualify, participants need to be at or below the poverty line. (A family of four, according to these guidelines, earns around or below a gross monthly income of $2,665.) Participants in the government-funded program receive benefits on payment cards, which can be used like debit cards to pay for groceries; the average family of four receives $465 a month.
The SNAP program used to only allow payment for groceries on the spot, so this partnership will be the first time low-income shoppers can use their benefits to shop online. SNAP participants will be able to purchase foods like bread, cereal, fruits, vegetables, meats, fish, poultry, and dairy products (the SNAP program does not cover the purchase of beer, wine, pet food, or household supplies). The pilot will not cover delivery charges.
The program is starting in New York, but the USDA said it will soon expand to Alabama, Iowa, Maryland, Nebraska, New Jersey, Oregon, and Washington. The grocery chain ShopRite is also on the list of companies that will allow SNAP participants to shop on its site.
There is, of course, an incentive for participating companies. According to the USDA, $52 billion worth of food stamps in 2017 went to big-box stores and grocery chains; Walmart and Amazon will now gain access to this new stream of revenue. The two companies have long been locked in a battle over shoppers’ wallets, so it makes sense that they’d want to expand their customer bases.
Amazon has set up a website for SNAP participants and already told the Associated Press it would give these shoppers free access to some Prime membership benefits, like AmazonFresh, where shoppers can buy meat, dairy, and vegetables, as well as Prime Pantry, which sells dried goods like cereal and canned food. As Walmart told the AP, “Access to convenience and to quality, fresh groceries shouldn’t be dictated by how you pay. This pilot program is a great step forward.”
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