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Fact check: What are the most common ways to abuse SNAP benefits?
Executive Summary
The most common ways SNAP benefits are abused cluster into three patterns: Electronic Benefits Transfer (EBT) theft (card skimming/cloning and unauthorized access), trafficking (exchanging benefits for cash, drugs, or non-food goods via retailers or intermediaries), and eligibility and application fraud (falsified income/identity). Multiple recent investigations and government analyses show these methods are rising as fraudsters exploit digital channels and onsite retailer schemes, prompting new prevention grants and state countermeasures [1] [2] [3].
1. How thieves skim the system: EBT card cloning and digital thefts are exploding
State reports and investigative journalism document a sharp increase in card skimming, cloning, and electronic theft of EBT accounts, where criminals capture card data and PINs to drain benefits from vulnerable recipients. Ohio and Indiana case summaries describe techniques where skimmers or illicit devices and online phishing capture credentials, leading to thousands losing access to benefits and concentrated losses at scale; one investigation estimated nationwide annual losses up to $400 million [1] [4]. Risk analyses from 2024–2025 indicate digital shifts in application and delivery have accelerated exploit opportunities, prompting states to add features like card locks [3] [4].
2. Retailer trafficking: Stores turned into cash-for-benefits operations
Prosecuted schemes and inspector-general reports show retailers remain central actors in trafficking, converting SNAP purchases into cash or noneligible goods. New York bodegas and Franklin County stores were identified as hubs where owners or clerks exchanged benefits for cash at a discount, took commissions, and resold goods, in one case netting millions and in another $184,757 in illegal payments. These cases illustrate a recurring modality where stores either collude with recipients or operate as the trafficking nexus, undermining program integrity and disproportionately harming beneficiaries who then lose access [5] [6].
3. SNAP used as currency for other illicit markets, including drugs
Law-enforcement accounts document EBT benefits being converted into cash or traded for drugs, creating secondary markets that finance criminal activity. Seattle police recent arrests linked food-stamp funds to fentanyl sales, with suspects purchasing EBT cards on the street or exchanging benefits for narcotics. These incidents show trafficking schemes can extend beyond retail conversion to support organized crime, increasing stakes for investigators and prompting cross-agency responses to link benefit abuse with broader criminal networks [7].
4. Eligibility and application fraud: falsified claims still a material problem
Federal program definitions categorize recipient fraud—intentional misrepresentation of income, household composition, or identity—to obtain benefits as a major vector of abuse. The USDA’s Fraud Prevention materials classify recipient fraud alongside retailer fraud and scams, and Cato Institute analyses catalog falsifying eligibility as a persistent method. While prosecutions and integrity frameworks focus heavily on trafficking and EBT theft, official guidance retains application falsification as a significant category requiring verification and case reviews [2] [8].
5. Diverging assessments of scale and policy implications
Sources vary on magnitude and policy responses: investigative reports that highlight multimillion-dollar schemes emphasize urgent enforcement and retailer-focused prosecutions, while think-tank lists and federal frameworks stress a broader taxonomy—recipient, retailer, and scam fraud—and call for program reforms to reduce opportunity for abuse. LexisNexis risk data point to a doubling in the rate of fraudulent applications and post-issuance cases since 2024, framing the problem as driven by digital transformation and signaling need for technology and funding solutions [3] [8].
6. Government countermeasures and funding to fight emerging threats
Federal and state responses are shifting toward prevention technology and capacity building: USDA guidance outlines the three primary fraud categories and prevention priorities, and recent grant programs allocate up to $5 million to states to implement elements of the SNAP Fraud Framework—emphasizing detection, mitigation, and emerging threat response such as card skimming schemes. States like Indiana have deployed EBT card lock features and other technical safeguards; these investments reflect recognition that both retailer enforcement and digital security are essential [2] [9] [4].
7. What’s missing from the public debate and where attention should focus next
Public reporting concentrates on high-dollar trafficking rings and EBT theft, but systemic drivers—recipient vulnerability, retail market incentives, and technology gaps—receive less synthesis. Cases show beneficiaries often lose access while criminals profit, and rising digital fraud rates suggest prevention must combine law enforcement with user protections, retailer oversight, and verification reforms. The assembled sources highlight a complex picture: fraud modalities are evolving quickly, and policymakers are responding with grants and tech fixes, but comprehensive evaluations of cost-effectiveness and impacts on eligible households remain limited [1] [3] [9].