the food stamp factor
the food stamp factor One small change has caused a domino effect with grocers Many Chaldean retailers know the first of the month means all employees will be needed and shelves must be stocked because business will be booming — customers just got their food stamps. This way of distributing government dollars to purchase food has a domino effect on the food industry and the players on the food chain want the method to change. The Food Stamp Program payment method comes once a month. A food stamp recipient receives a plastic card called a Michigan Bridge Card, which is credited within the first 10 days of the month. This card allows withdrawals for food purchases at grocery stores and supermarkets. The store simply uses the EBT Bridge Card to “electronically” subtract purchases from the food stamp account. The recipient can only spend the amount that is in the account. SOLUTION PROPOSED The Associated Food Dealers of Michigan (AFD) is asking the Department of Human Services in Michigan for twice-monthly payments. The AFD represents 3,000 independent retailer locations throughout the State of Michigan, many of them among the 5,870 food stamp licensees in Michigan. This month the AFD merged with the Great Lakes Petroleum Retailers and Allied Trades Association (see story on page 32). “The AFD is urging that the Michigan Department of Human Services implement a twice-monthly electronic transfer of food stamp benefits, which would make one half of food stamp benefits available to a recipient in the first part of the month and the balance of the monthly benefit posted in the second half of each month,” said Jane Shallal, president of the AFD. The reason is actually simple. AFD members who serve in high food stamp program areas report that they have a number of customers who are largely dependent on food stamps. Many retailers and suppliers are doing 80 percent of food stamprelated sales in the first 10 days of the month, as a result of the current system. This has created an enormous problem for in-store staffing, cash flow, supplier delivery, and inventory and quality control, especially with respect to perishable items. BY VANESSA DENHA-GARMO Additionally, employers (both retailers and suppliers) are being forced to ask their employees to work 50 or more hours a week for the first two weeks of the month because of the heavy volume, with limited work hours left available to employees in the last two weeks of the month. This recommended change is touted as helping retailers, suppliers, wholesalers and manufacturers across the state by easing the burden of financial and management problems that result from the current system. “Wholesalers and retailers see a big surge in our business around that first of the month issuance of food stamps, which requires everyone to ramp up on staffing to handle the sales,” said Mary Dechow of Spartan Stores. “After that surge, sales drop to a level that will usually hold until the first of the next month. It causes a real staffing issue for retailers and wholesalers, and can also be an issue for associates who end up working more hours early in the month, but are short on hours later in the month. It’s not only difficult for us to budget our time needs, but it’s hard for employees to budget their personal finances when their work hours are reduced later in the month. Changing the way foods stamps are distributed would help immensely, as it would level off the product and staffing needs.” At the end of the month when the money is gone, some customers on government assistance live on what people say are gravy and bread. Gary Davis, board member of the AFD and general sales manager for Prairie Farms Dairy, has recalled countless stories of customers suffering as a result of the food stamp distribution. “I was at a store in Detroit, it is the end of the month and these people walked up to the owner and explained that they ran out of money and couldn’t buy any food,” said Davis. “So, he grabbed some bread and meat and gave it them. There are so many retailers who are generous because of the inadequacies in our system. Most people get paid twice a month or every week. Very few people get paid once a month. The system needs to change.” CRIME FIGHTER? The AFD is also receiving numerous reports of an increase in crime against retailers in the second half of the month, which Shallal said retailers attribute to lack of funds for food purchases. “It would appear that from a statistical standpoint, most, and in some cases all, of the funds in a recipient’s EBT account are used or depleted during the first half of the month, leaving a small balance or no monies at the end of the month for necessary food purchases for the family,” she said. “The current payment method imposes a hardship on recipients who may have difficulty or lack savvy in money management of a once-a-month payment.” Fred Dally, chair of the AFD and owner of two Detroit-based convenience stores, said the food stamp situation has gotten worse in the past year. “There are more people without work in Detroit due to the economy and that means more people are on food stamps,” he said. Dally said when food stamps were distributed twice a month in the form of books of paper stamps, retailers didn’t report the problems they have today with crime and the inability to staff their stores properly. “For example, it is difficult to keep fresh produce in a store when customers are only spending money in the first 10 days of the month,” said Dally. “Because customers spend all their food stamp dollars at that time, business decreases the last 20 days of the month and we are unable to keep the store stocked with fresh food.” Davis agrees. “It is a challenge to stock a store with our dairy products for the first 10 days of the month and have our trucks jammed up, then business slows down dramatically at the end of the month and you can’t keep fresh dairy in the store,” he said. The proposed FOOD STAMPS continued on 47 42 CHALDEAN NEWS APRIL 2006
APRIL 2006 CHALDEAN NEWS 43
