DALLAS -- Retailers are late in confronting the issues and opportunities raised by electronic benefits transfer programs and, as a result, risk losing out on setting favorable national standards and cashing in once the full scope of the program kicks in.
At stake is a whopping $111 billion in government-dispensed cash benefits -- to start.
By not participating now in shaping EBT's infrastructure, retailers may soon be saddled with the unpleasant choice of joining in a system they don't like or turning away customers seeking to swipe cash-benefits cards in their stores.
That was the message delivered loud and clear during a panel discussion at the Retail Systems '96 conference and exposition here this month. The event, sponsored by Retail Systems Alert, Upper Newton Falls, Mass., drew an estimated 4,500 attendees.
"EBT is a significant opportunity in all retail, but the window is narrowing for retail, state and regional associations to work together with the federal and state governments to develop rules, regulations, operating systems and transaction requirements that would benefit all constituents," said George Dieterich, director of retail technology services at Fleming Cos., Oklahoma City.
For retailers, the initial focus of EBT has been on redeeming food stamps, a situation that has generated somewhat more involvement by supermarkets than other classes of trade. But the big picture opportunity for EBT is still not fully grasped by many retailers, Dieterich said.
Wal-Mart Stores, Bentonville, Ark., though, is one chain that has seen the light and now views EBT as a critical part of its core business strategy for winning customers in the future.
"We process over 60 million transactions a week in the Wal-Mart enterprise, and we're taking the stance that EBT is an opportunity to gain a competitive advantage in all our business units. It's money, and when you're talking about money you're talking about consumers, and when you're talking about consumers you're talking about Wal-Mart," said Kevin Turner, the chain's vice president of application development.
"We want to be a part of EBT, not only so we can make it easier for our customers to shop at Wal-Mart but also because it would be an inconvenience if they couldn't. So we're looking at it from a customer service standpoint and we're going to be on the front-edge of this movement," he said.
Fleming's Dieterich, who has been involved with EBT for more than a decade, spelled out in detail some of the issues that still need to be addressed.
"The only truly amazing thing about EBT is the issues remain the same, the issues of compatibility, consistency, interoperability, fees, rates and equipment. We have states such as New Jersey that took six years to get one county up and running because of the rules, regulations, challenges and concerns of retail, state and federal communities," Dieterich said.
"We also have states such as Maryland that achieved consensus early on and rolled out the entire state. The truly good part of EBT rollouts today is the involvement of associations and coalitions, including the Southern Alliance of States, the Northeast Coalition and the Western Coalition," he said.
Nevertheless, a lot more work needs to be done, and retailers must take a greater role in shaping the decisions about how EBT will proceed.
"People don't understand EBT, the impact of it. The bottom line is there's $111 billion in money changing hands annually. It's far broader than food stamps, which is the initial perception people have. It goes much, much deeper in terms of where we're going as a society," Turner said.
"There's going to be a wakeup call ringing out because when you talk about putting federal government pensions on EBT standards, and health care and pharmacy and social security and welfare checks, it certainly broadens what we're looking at," he said.