COLTON, Calif. -- When San Bernardino became the first county in southern California to initiate electronic benefits transfer, Stater Bros. Markets here moved quickly to accept EBT in its stores there. The retailer launched EBT in seven stores earlier this month, and expects to go live in 28 more San Bernardino units in December.
By March 1998, the retailer plans to roll out EBT to all 46 of its stores in the county. The retailer's launch of electronic benefits in seven stores Nov. 3 makes it the first chain to accept EBT in southern California.
"In addition to being the largest retailer in San Bernardino county, our headquarters are also here," said Jack Brown, president, chief executive officer and chairman of Stater Bros. "We have been involved in making EBT a reality since 1991 and we feel very strongly about the card program."
Though there is not a specific time frame for a statewide EBT rollout in California, Stater Bros. will be fully equipped to process EBT transactions chainwide -- in 111 stores -- by July 1998, according to Brown. State legislation mandates EBT implementation by 2002.
Brown expects acceptance of EBT to reduce transaction time at the point of sale. "Benefit transactions could be reduced by a third of the time it takes now to perform food stamp sales," he explained.
"Currently the consumer waits for the order amount to be totaled at the POS, then the consumer tears individual coupons to pay for the transaction," he added. "Then the coupons are given to the checker to count. With EBT, these transactions will be done instantly."
The county's benefit recipients have begun to receive magnetic-strip cards in lieu of county-issued paper food stamp coupons. At checkout, recipients swipe the plastic cards through the POS payment terminal used for credit and debit transactions.
"The consumer enters a personal identification number and within seconds the purchase's qualifying items are deducted electronically from the card," Brown explained. "Our POS systems print a receipt that lists the balance available on the account, so the consumer can plan for future purchases."
One of the key benefits to offering EBT in its stores is the opportunity for Stater Bros. to reduce food-stamp fraud typically associated with paper benefits.
"By implementing EBT, we will be able to eliminate approximately 90% of fraud connected with food stamps," said Brown. "Through EBT, the stores will get direct access to the funds, rather than the discrepancies associated with paper coupons. This process could save the county up to $500,000 a year."
According to Brown, some food stamp recipients illegally sell their paper benefits and then use the money to purchase items that would not normally be covered under the government benefit plan, including alcohol and tobacco.
"The goal is to eliminate the fraud committed through the illegal selling of the coupons," he said. "Coupons worth $100 are sold for $40. The consumer then uses the cash to purchase alcohol, cigarettes, even lottery tickets. This is not the purpose of food stamps."
"Paper food stamps are issued to folks, especially those with children, who need aid. EBT will ensure that the dollars are spent for the intended purpose," he added.
Card benefits also help secure the food stamps. "If a recipient loses the paper coupons, they are not replaceable," he said. "However, if a card is lost, the recipient calls the county office to cancel the lost card and then be issued a new one."