[Poverty at Issue]
A Newsletter for Individuals Concerned About Poverty in Missouri

Summer 1998

In this issue:

Electronic Benefits Transfer

Consumer Tips for Using EBT Safely and Effectively

The Food Stamp Program

Family Nutrition Education Programs

Some Food Stamp Facts

The 1996 Federal welfare law required states to develop an Electronic Benefits Transfer (EBT) system to distribute TANF (Temporary Assistance for Needy Families-formerly AFDC) and food stamp benefits by January 1, 2002. Under the Debt Collection Improvement Act of 1996, all federal payments must be made electronically by January 1, 1999.

Missouri now has an EBT system in place statewide for food stamps and TANF. Benefits are assigned to plastic, photo EBT cards, which recipients use like debit cards to make purchases or get cash. The EBT system soon will also accommodate SSI, Social Security, Veterans and other Federal benefits for recipients without a personal bank account.

The State implemented its pilot of 10,000 households in several counties in the south-central part of the State and six zip codes of Kansas City and St. Louis in June of 1997. EBT has been operating statewide since June 1998, when north Missouri counties were added to the system. Recipients, helping professionals, caseworkers, bankers, merchants and others are affected by this major change. Many of them are very satisfied with the EBT system. Some advocates voice accessibility, cost, security and consumer concerns for recipients. Some merchants-particularly national merchants-express concerns about costs and interoperability across state lines.

This Poverty At Issue provides basic information about EBT, consumer tips for using the card safely and effectively, and advice about what to do if you experience any problems with EBT. It also discusses policy and consumer issues associated with EBT and gives some basic information about the Food Stamp Program and the Family Nutrition Education Programs offered in Missouri through University Outreach and Extension.

I hope you find the information helpful.

Brenda Procter
Consumer and Family Economics Specialist

New Way to Get Food Stamps and TANF
Electronic Benefits Transfer

Electronic Benefits Transfer (EBT) is a new system for distributing food stamp and Temporary Assistance for Needy Families (TANF) benefits in Missouri. Recipients no longer get paper checks or food coupons. Instead, their benefits are set up in an electronic account. They access their accounts with a plastic card that the State issues to each family’s head of household. Under Federal law, all states must have an EBT system for food stamps and TANF in place by January 1, 2002.

How Does EBT Work?

Benefits are assigned to each family on a Benefit Security® Card under a food stamp account, a TANF account, or both, depending on their eligibility. A local DFS worker takes a picture of the head of household. The picture is placed on the upper, lefthand corner of the EBT card. All Missouri food stamp and many TANF recipients now get their benefits through EBT. TANF recipients may instead choose to have their cash benefits deposited directly into a personal bank account if they have one.

Under EBT, heads of household get a Personal Identification Number (PIN) that they use to access benefits assigned to the Benefit Security® Card-commonly called an EBT card. They also can choose someone (their authorized representative or protective payee) to get an EBT card, PIN number, and full access to the family’s benefits. Benefits are added to the card each month by 6:00 a.m. on the date the caseworker identifies for each family. In Missouri, you can tell whether merchants or ATMs accept the EBT card by whether they display a Quest® symbol.

The EBT card is used like a debit card at Point-of-Sale (POS) machines to purchase eligible foods from the food stamp account; or you can buy other items, and get cash back, from the TANF account.You also can use the card at an automatic teller machine (ATM) to get cash from the TANF account. After each purchase or cash withdrawal, the receipt shows how much is left in the appropriate account for the month.

Where Can You Use Your EBT Card?

Merchants who display the Quest Mark® have a contract with Missouri to participate in the EBT program. If the symbol has a dollar sign ($) in the lower lefthand corner, you can only use cash benefits with that merchant. If it has a picture of a grocery bag that says "Food Stamps" in the lower lefthand corner, that merchant accepts only food stamps. If both symbols are on the Quest Mark®, you can make either type of purchase with that merchant. Quest Mark® cards also appear on ATM machines that accept EBT cards.

The Federal government tried to lay the groundwork for "interoperability" among systems in different states.The National EBT Council, operating within the National Automated Clearing House Association (NACHA), wrote a set of operating rules intended to make it easy to accept EBT cards across state lines. They are called the Quest® Operating Rules. The rules are a fluid document that provides the basis for nationwide EBT. The purpose of the EBT Council is to maintain and update EBT operating rules, taking into account technological advances and lessons learned during implementation. It also provides a forum for the exchange of information on EBT, and deals with issues of education, marketing and fraud. The U.S. government contracts with Citibank nationally to implement EBT.

To date, between 30 and 40 states belong to coalitions that have joined the EBT Council, and have voted in favor of the operating rules. Missouri is a member of the Southern Alliance of States, which also includes Alabama, Arkansas, Florida, Georgia, Kentucky, North Carolina and Tennessee. The Southern Alliance chooses to participate in the Quest® system. In Missouri, Citibank subcontracts with Deluxe Data Corporation, who issues EBT cards and processes data for the system. Neither Kansas nor Illinois is in the Southern Alliance, and neither state has an EBT system compatible with Missouri’s. Interoperability has been worked out with a handful of merchants across both state lines. As of May 14, 1998, the latest information available, thirteen Kansas merchants accept Missouri EBT cards:

Five Illinois merchants accept Missouri EBT cards:

What If You Have Problems With EBT?

When you sign up for food stamps or TANF, Missouri Division of Family Services gives you information about your EBT card. It tells you how to use your EBT card and PIN, how to activate your card, where you can use it, what fees you will pay, and your rights and responsibilities under EBT. If you need help using your card, PIN or making your card work, contact your caseworker with questions or to arrange in-person training.

When you have questions about or problems with your account, you can call Deluxe Data at the toll-free customer service number on the back of the EBT card (1-800-997-7777). Calls to this number from pay phones are blocked, so you must call from a neighbor’s house or friend’s house. You also can call from a phone provided at the local DFS office. When retailers have problems with the card, there is another toll-free number they can call 1-800-831-5235.

Advantages & Disadvantages of EBT

Missouri Division of Family Services points to several advantages to EBT that they see for consumers:

Other officials say that EBT reduces the stigma associated with food stamp coupon use. Recipients can withdraw only as much of their benefits as they need, instead of receiving a whole month’s worth at one time. They point out that lost food coupons can be used by anyone but only those who know the PIN can use a lost EBT card. Cards can be cancelled and replaced.

Many government officials and some merchants see EBT as a resounding success. Stores magazine says that by the time EBT is expanded to include several other federal and state programs, 30 million households nationwide will receive roughly $120 billion in electronic payments annually. This would result in about $200 million annually in Federal savings. The Federal government saves time and money by moving to EBT. The process of printing, transporting, safeguarding, distributing, accounting and destroying food stamp coupons is eliminated.

On the other hand, Stores points out that without interoperability among states, national retailers’ costs will go up and "investments in retail technology will be considerable." National retailers will have to adjust to respond to different state rules.

Merchants have mixed reactions to the EBT system. The manager of a large grocery retailer with two stores in Columbia, Missouri, said they like the new EBT system better than the old paper system. They’ve seen a 90% drop in the number of paper food stamps. Staff are saving a lot of time-they used to have to count paper food stamps by hand. Unlike with their credit card carriers, they do not pay a fee to Quest®. In fact, they receive a commission and a processing fee from the government. The only problems the stores have seen with consumers is that they sometimes think the card is active and it’s not, or their benefits are not in their account when they expect them. Personal shopping assistants help customers with disabilities swipe their cards and push buttons on the machines.

A small St. Louis merchant sees EBT a little differently. He says that because his store does not offer cash back at Point-of-Sale machines, he is losing business to larger stores.

South Side Welfare Rights in St. Louis is a grassroots organization of low, fixed, and moderate-income citizens who do advocacy, lobbying and training. Eddie Mae Binion, their executive director, says that consumer reactions to EBT in St. Louis are mixed. Some recipients say it’s OK, others are indifferent one way or the other, and some are having a hard time with it.

Binion says those with a low level of education and some seniors are having a hard time with the PIN numbers. "They end up giving their PIN numbers to others because they are afraid of what they call the ‘three strikes and you’re out rule,’" says Binion. (If you make a mistake with your PIN the first time, you only have three more tries to get it right or wait until the next day to try again.)

Another common problem is that some recipients are losing some of their food stamp benefits each month because the new EBT system wipes out benefits that are not used within 90 days.

Federal officials require states to remove unused benefits from the automated system after 90 days, even though they are good for 12 months. Recipients have to ask caseworkers to reinstate benefits that are removed under the 90-day rule. Most recipients should receive a warning about this when benefits go unused for 60 days.

A state survey of 900 people showed that more than 40% like to stockpile benefits for major grocery shopping trips.

Groups like Missouri Association for Social Welfare (MASW) are particularly concerned about food stamp recipients who are elderly or disabled. They are among those most likely to stockpile their benefits. Many of them may not know that their benefits will be removed from their account.

MASW’s executive director, Peter DeSimone, also points to problems with literacy and access. "About 20% of Missouri’s total population can’t read and 11.5% of rental units in Missouri don’t have phones, so there are going to be some problems. You have to be able to read well enough to understand that you have to activate the card by telephone. Then you need access to a phone to do that." DeSimone fears that technological challenges are driving some seniors off the system entirely.

Binion says clients have experienced other problems as well: some have had the wrong picture on their EBT card, some didn’t know their PIN number, others didn’t know when they could use their card, and one lady lost her card and didn’t get a new one for two months. She has heard stories about cards being left in the washing machine or being otherwise damaged so that they wouldn’t work. Binion says that recipients sometimes have to call in because their deposits are not in their accounts on time.

Binion points out, however, that some consumers actually like EBT better than the old system. Some say they don’t spend their benefits as fast this way. Others say they keep them longer because they don’t send their kids to the store, fearing the kids will lose the card and PIN number.

EBT Fees

Some EBT transactions are free, but you get charged extra fees for others. Using your food stamp account is always free. Balance inquiries for both your food stamp account and your TANF account are always free. When you use your card to buy something from your TANF account, that transaction also is free, and you can ask for additional cash back without an extra charge when you make a purchase.

When you make a cash withdrawal from an ATM, a "transaction fee" of $.85 is also deducted from your TANF account. $.85 also is deducted for every cash only withdrawal from a point-of-sale (POS) machine, except the second one-the second POS cash withdrawal of each month is free.

According to Joel Ferber, Gateway Legal Services, $.33 covers the State’s cost and the other $.52 goes to Citibank, the Federal EBT contractor. A "surcharge" is over and above the transaction fee and may be added on by some, but not all, stores and ATMs. You have the right to be warned of this extra surcharge before you make a withdrawal. A surcharge can add another $1.50 or more to the amount taken out of your account.

The best way to avoid fees is to have TANF benefits deposited directly in a bank account. Your DFS caseworker will have a list of banks in your area that offer free or low-cost checking accounts that you can consider.

This article was researched and co-authored by Fiona Robertson, MA, Social Anthropology

Consumer Tips for Using EBT Safely and Effectively

The Food Stamp Program

The Food Stamp Program helps put food on the table for some 9 million households and 22 million individuals each day. It is a tangible expression of the principle that everyone has a right to food for themselves and their families. The program is the cornerstone of Federal food assistance programs. Food stamps provided more than $19 billion in benefits in 1997. A family of three may be eligible at a gross income level of $1,445 a month, depending upon certain expenses that are deducted by DFS to determine net income. As many as 15 million eligible Americans do not apply.

The U.S. Department of Agriculture administers the Food Stamp Program at the Federal level through its Food and Nutrition Service (FNS). State agencies administer the program at State and local levels, including determination of eligibility and allotments. Under the EBT system, the food stamp rules are the same as before, and the same foods are eligible for purchase.

To get more information about food stamps, contact your local Division of Family Services Office or call the Food Stamp Hunger Line at 1-800-392-1261 between 8:00 a.m. and 5:00 p.m.

When you apply for food stamps, you have the right to:

If you believe that you or any group of individuals have been discriminated against by the Food Stamp Program because of age, sex, color, race, handicap, religious creed, national origin or political beliefs, write immediately to the Secretary of Agriculture, Washington, D.C. 20250.

Nutrition Education for Low-Income Missourians
Family Nutrition Education Programs

Family Nutrition Education Programs (FNEP) are part of University Outreach and Extension’s outreach to Missouri families and individuals with low incomes. Through a variety of classes and approaches, FNEP teaches skills and behaviors that help improve nutritional well-being and lead to healthier lives.

FNEP uses a peer educator model. Educators work within their home communities to offer nutrition classes in group settings or in their clients’ homes. University Outreach and Extension specialists supervise the peer educators and provide them with ongoing research-based training. Educators work with local partners to reach families.

According to Barbara Willenberg, state FNEP coordinator, a family who learns to make better decisions about their diets and food budgets often take more control of other important life functions as well. "Enrollment in FNEP is the first positive educational experience that some participants have had," says Willenberg. Last year, FNEP reached 60,000 individuals in 91 Missouri counties.

Why is FNEP Important?

Nutrition is an important link to a number of positive social outcomes. In light of Federal cuts in the food stamp program, getting the biggest nutritional "bang for the buck" becomes even more important. Research shows that:

FNEP offers programs tailored to a variety of learning styles, taking into account age, culture, reading ability, physical and developmental limitations and more. Lesson, handouts, and activities are designed for audiences ranging from parents and kids, to seniors, pregnant teens, and immigrant populations.

The lessons learned through FNEP build life-long skills. Years after enrolling in the program, participants often return to tell about how their experiences have impacted their own lives and the lives of their family members. Recently, while visiting in south central Missouri, a nutrition educator was approached by a young woman at a WIC clinic. The young woman had been enrolled in the program with her family when she was a young child and is now a mother of three children. She asked the educator to teach her children the same lessons that she had received as a child. She went on to tell about how the skills learned over ten years earlier were helping her raise her three small children better.

How Can You Get Involved?

FNEP’s success depends on community partners. Working with partners at the community level is the only way to get FNEP to the clients who need it the most. In communities all over Missouri, community partners refer clients to the program; serve on advisory committees; offer space, personnel time or equipment; or contribute cash. For more information about how you might be involved, contact your local Missouri County Extension Center. Ask about:

Some Food Stamp Facts

*Welfare reform legislation replaced the AFDC Program with a block grant program, known as Temporary Assistance for Needy Families (TANF).

A household is a group of people who live together and buy and prepare their food together.

Participation and cost figures are from current program statistics. Facts about the makeup of households are from the FY 1996 Advance Report updating the Household Characteristics Study.


An Introduction to EBT, Trainer’s Guide, IM Training and Development, Department of Social Services, Division of Family Services, Jefferson City, Missouri, May 1997.

EBT, Electronic Benefits Transfer, Department of Social Services, Division of Family Services, Jefferson City, Missouri, October 1997.

EBT FAQs, The State of Connecticut, Department of Social Services, http://www.dss.state.ct.us/digital/faq/ebtquest.htm, 1996.

EBT: What Price Progress?, Stores, November 1997.

Electronic benefits elicit mixed feelings, Columbia Missourian, Aug. 4, 1998.

Electronic benefits subject to erasure; poor, elderly fight, Columbia Missourian, May 25, 1998.

Food Stamp Program, Electronic Benefits Transfer (EBT) Project Status Highlights, http://www.usda.gov/fcs/stamps/fs.htm, July 1998.

Food Stamps: Americans, helping each other through hard times, Department of Social Services, Division of Family Services, Jefferson City, Missouri, September 1997.

Nutrition Program Facts, Electronic Benefit Transfer, USDA Food and Nutrition Service, http://www.usda.gov/fcs/ogapi/ebtunf~1.htm, December 1997.

Some Food Stamp Facts, http://www.usda.gov/fcs/stamps/fsfacts.htm.

Your Benefit Security Card Handbook, Department of the Treasury.

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Jeanne Bintzer, HES Extension Site Administrator

Brenda Procter, Consumer and Family Economics Specialist, Content Provider