System Glitch Leads to EBT Shopping Spree (Oct. 16, 2013)
A system disruption last weekend enabled public assistance recipients in 17 states to make purchases using Electronic Benefits Transfer cards with no spending limits. Xerox, one of three companies that operate the payment system for the Supplemental Nutrition Assistance Program (SNAP), said a routine test of a backup generator on Saturday caused the company’s EBT system to experience a “temporary shutdown.”
While the system was down, daily spending limits were disabled on cards in states including California, Illinois, Georgia, Ohio, Michigan, Pennsylvania and Texas. Some cardholders in Louisiana quickly took advantage; police were called to a pair of Walmart stores near Shreveport, La., after managers reported customers went on buying sprees with the unlimited EBT cards, leaving the stores’ grocery sections “decimated,” according to police. By 9 p.m. Eastern on Saturday, the glitch was corrected and spending limits returned to normal. “We appreciate our clients’ patience while we resolved this issue and apologize for any inconvenience,” Xerox said in a statement. “We continue to investigate the cause of the issue, so we can take steps to ensure a similar interruption does not re-occur.”
SNAP—formerly known as the Food Stamp Program—reimburses merchants for purchases made with EBT cards, up to a daily limit. It remains unclear, however, whether affected retailers will be reimbursed for the goods sold over the card limits. A spokesman for the Louisiana Department of Children and Family Services told Reuters that emergency procedures are in place to enable retailers to call a phone number to receive authorization for purchases whenever the EBT system is down. “Some retailers chose not to follow that process,” the spokesperson told Reuters. Those businesses are only being reimbursed by SNAP up to the regular card limits, he said, adding that who will pay the balance “is a conversation between Xerox and the retailer.”
