EBT: COSTS ARE FEW, BENEFITS MANY (SECOND OF THREE PARTS)

Area retailers will experience initial costs but ongoing benefits when Southeast Missouri recipients of food stamps and cash benefits begin using their Electronic Benefits Transfer cards on Monday.

Electronic debit cards will replace paper checks and food stamps for Missouri. The program already has been piloted in southern Missouri, St. Louis, and parts of Jackson and St. Louis counties. EBT cards were issued to welfare recipients in 17 Southeast Missouri counties this summer.

Some local grocery stores already have conducted EBT transactions for shoppers who live near Poplar Bluff. Both Schnucks supermarket and Storey's Food Giant in Cape Girardeau have performed debits for traveling shoppers during the last two weeks, and store managers said the system shows promise.

"It's going to take the customers a little getting used to, but they're really great," said Storey's manager Mike Recker. "I think they're better for everyone all around."

John Morrison, director of the Missouri Grocers Association, said benefits of the new system outweigh its problems for retailers. The major benefit is fraud reduction because businesses don't have to worry about receiving fraudulent or stolen checks, he said.

There are about 12 different business scenarios associated with the EBT debit system, so retailers must make good business decisions when considering participation, he said. Retailers can receive government-issued equipment and participate in the food stamp portion of the EBT program without cost. Those who decide to also provide cash-debit services do so commercially and must purchase the equipment, which generally ranges from $800 to $900 per equipped lane, he said.

"From the standpoint of operations, obviously it's good," said Morrison. "Historically, where people draw their money they have tended to spend their money. Retailers are very interested in making it as convenient as possible for the recipient. They feel like, by catering to the recipient, they're going to recover some of those initial costs."

Morrison said MGA receives between 50 and 75 calls a week at their home office in Springfield from retailers seeking information about the EBT program. Retailers want to know their options, he said, and MGA is trying to help them make decisions based on their individual business.

Retailers of all kinds eventually will offer EBT services, but currently grocers and banks are the main retailers involved in the program. Melba Price, associate director for policy coordination with the Department of Social Services, said about 65 percent of retailers are accepting free equipment from the government to participate in the food stamp portion of the EBT program only.

Currently, only three of Missouri's eight bordering states work on the same debit system, which means recipients can only shop across the border in Arkansas, Kentucky and Tennessee. For Missouri retailers, this means lost revenue until the states work out their differences, she said.

"Whenever the state is issuing to the client, they have to worry about where that client can shop," Price said. "I consider the borders on the southern part of Missouri to be melted because our clients are totally free to go shop wherever they want to go."

Schnucks manager Dennis Marchi said he isn't sure how much his store will be affected while agencies in Missouri and Illinois work to develop interstate card usage. "It's going to affect it, sure, because we do get shoppers from Southern Illinois," he said. "But I'm not sure how much we'll be affected."

Morrison said fewer opportunities for fraud and the chance for increased sales mean retailers will benefit from the EBT program. MGA is communicating with the state on a daily basis to stay on top of problems encountered by retailers.

"I think if the program really does what it's supposed to do, which is reduce the fraud, it'll definitely have some benefits," he said. "The state's done an excellent job in my opinion of accommodating both the recipients' and the retailers' needs."

On Thursday, the impact of the EBT system on fraudulent transactions.