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54. Electronic Benefits Transfer (EBT) system

What is EBT?

General authority: 7 U.S.C. § 2016(i)(1); 7 C.F.R. § 274.12; Welf. & Inst. Code §§ 10065 et seq. and 10072; MPP Division 16 – Electronic Transfer System Manual.

All states have replaced paper food stamp coupons with a federally mandated Electronic Benefits Transfer (EBT) system. [7 U.S.C. § 2016(i)(1).] Food stamp recipients now use this electronic “debit” card system instead of the old-style “paper coupons” to purchase food. Federal food stamp regulations and related federal EBT policies dictate specific operational and functional requirements for EBT systems, including nation-wide interoperability among all states and territories. [See, generally, 7 C.F.R. § 274.12.

The California EBT Project provides official information about EBT operations in California, including among other things links to applicable federal laws and regulations and frequently asked questions (FAQs). See also the California State Hearing Division’s paraphrased regulations related to specific EBT issues.

California completed its transfer to EBT in July 2004. The California Electronic Benefits Transfer Act, Welf. & Inst. Code § 10065, et seq., governs EBT in California. The California EBT regulations are located at MPP Division 16, Electronic Benefit Transfer System Manual. All County Letters (ACLs) and All County Information Notices (ACINs) also govern EBT. (For example, see ACIN I-25-03, April 16, 2003 (EBT Questions and Answers); ACL 03-58, December 22, 2003 (Using EBT to voluntarily repay overissuances and use of expunged benefits); and ACL 05-28, (regarding applying “dormant” EBT food stamp amounts to overissuances.

For more information about California All County Letters and All County Information Notices, see this guide’s selective list of food stamp-related ACLs and ACINs.

EBT and Cash Benefits

As of December 20 2004, all 58 counties in California use EBT issuance for food stamps. [ACIN I-84-04.] In addition, counties may choose to also use the EBT system to deliver CalWORKs [TANF] and General Assistance (GA) cash payments. Fifty-one of California’s 58 counties have elected to use the EBT card for either CalWORKs or General Assistance or both.

How the EBT system works

Golden State Advantage Card

The EBT system relies on what is essentially a “debit” card system. Each county welfare department issues recipients the Golden State Advantage Card, a magnetic stripe card that works like a commercial ATM or debit card, to buy food at authorized grocery stores. [MPP § 16-001.12.] To use the system, recipients swipe their cards through a machine at the checkout counter called a “point of sale” or POS machine and enter a personal identification number or PIN for verification. [MPP § 16-001.13.] The EBT system automatically deducts the food’s cost from the monthly allotment and issues a receipt showing the balance. [7 C.F.R. § 274.12 (f)(3)(i), MPP §§ 16-001.134-.136, 16-310.21-.22.]

States must give the POS machines to stores that want them. [7 C.F.R. § 274.12(g)(3).] And must supply a POS for every checkout lane in any store where food stamp purchases account for at least 15 percent of total food sales. [7 C.F.R. § 274.12(g)(4)(ii)(A).] Stores cannot make recipients use a special “food stamps only” checkout line. [7 C.F.R. § 274.12(g)(4)(i).] Whenever the store is open, even in the middle of the night, at least one checkout lane with an EBT machine must be open. [7 C.F.R. § 274.12(f)(9).]

The U.S. Department of Agriculture, Food and Nutrition Service (FNS), requires authorized food stamp merchants to continue to accept food stamp coupons until further notice. Authorized merchants also must continue to accept food coupons even though an EBT system operates at a particular store location. [See FNS FAQs About Becoming an Authorized Retailer.]

EBT regulations recognize the need to provide manual transactions as a backup when the EBT system is down. However, USDA permits retailers to choose when to use the manual system if the electronic system is down. [7 C.F.R. § 274.12 (e)(2)(v), (h)(3)(ii)(D), (h)(4)(ii)(A).]

Recipient protections

The California Electronic Benefit Act, MPP Electronic Benefit Transfer Manual, and Section 274.12 of the federal regulations provide recipients with statutory protections, including:

  • broadly defined statewide EBT system access.
  • reasonable access to the EBT system to accommodate challenges experienced by recipients related to physical and mental disabilities, language, lack of access, or other barriers. [MPP § 16-003.]
  • the option to select an individualized personal identification number (PIN). [7 C.F.R. § 274.12(f)(5)(i); MPP § 16-520.1.]
  • the right for households with more than one adult to obtain multiple EBT cards. [MPP § 16-505.1.]
  • 24-hour toll-free telephone access for reporting lost or stolen EBT cards and obtaining replacement EBT cards and PINs. [7 C.F.R. § 274.12(f)(10)(v); MPP §§ 16-515.1, 16-515.3.]
  • protection against loss of benefits to the recipient once an EBT card or PIN is reported lost or stolen. [MPP §§ 16-515.2, 16-515.4, 16-515.5, 16-517.2-.3, 16-520.32.]
  • prompt replacement of lost or stolen benefits. [MPP § 16-517.1.]

[See, generally, Welf. & Inst. Code § 10072(a)-(g).]

The rules for EBT cash benefits are different. In California, recipients are guaranteed four free cash withdrawals each month, but after that may be charged a fee, “not to exceed the amount allowed by applicable state and federal law and customarily charged to other customers.” [Welf. & Inst. Code § 10072(k).]

Recipients may buy as much food as they need until benefits run out. [MPP § 16-310.3.] Benefits do not need to be used in the month of issuance, and remain on the EBT card. If a recipient moves to a new county, he/she will get a new EBT card, but can also continue using any benefits left on the old card. However, if an EBT account is not accessed for 180 days, it will be listed as dormant; after 365 days, the account will be purged. ACIN I-64-08. Access to the account will be stopped after it becomes dormant; recipients must contact a worker to get the card reactivated for use. Id.

Federal rules prohibit charging recipients any fees for making food stamp EBT purchases. [7 C.F.R. § 274.12(f)(1).] And they need not buy a certain amount at each transaction. [7 C.F.R. § 274.12(f)(1); MPP § 16-310.3.] After each purchase, the receipt indicates the benefit amount remaining for the month. [7 C.F.R. § 274.12(f)(3); MPP § 16-310.22.] Recipients may request a “transaction history” of all the food purchases made with their EBT card during the last two months via a toll-free telephone number (the same number, listed above.) [7 C.F.R. § 274.12(f)(2); MPP §§ 16-130.1, 16-130.51.]

EBT systems must comply with the Americans with Disability Act of 1990 (ADA), 42 U.S.C. § 12101, et seq.. [7 C.F.R. § 274.12(h)(4)(i)(G); MPP § 16-003; Welf. & Inst. Code § 10072(d).] Authorized representatives are allowed to act on behalf of recipients who have a disability that prevents them from participating in an EBT environment. [MPP § 16-003; 57 Fed.Reg. 11218, 11220 (April 1, 1992) (Preamble to Final Regulations, Food Stamp Program Standards for Approval and Operation of Food Stamp Electronic Benefit Transfer Systems).]

The county must show recipients how to use the EBT system and give them a chance to practice. [7 C.F.R. § 274.12(f)(10); MPP § 16-601.1.] It must also give written instructions explaining how to use the system. [MPP § 16-601.2.] The written materials must be in simple language so that everyone can understand them. If recipients don’t speak English well and usually get notices from the food stamp office in another language, they should get the EBT information in that language too. [7 C.F.R. § 274.12(f)(10)(vi); MPP §§ 16-601.4, 16-601.41.]

Lost or stolen EBT cards

Lost or stolen cards should be reported immediately to the designated 24-hour telephone number: (877) 328-9677. [7 C.F.R. § 274.12(f)(10)(v); Welf. & Inst. Code § 10072(f); MPP § 16-515.3.] Once reported, the county will cancel the card immediately, and must give recipient a new card within two business days after the recipient reports the loss. [7 C.F.R. § 274.12(f)(5)(ii); but see MPP § 16-517.1 (indicates that county must provide a replacement EBT card to the card holder within three business days following a cardholder’s request).]