States and Feds Consider a Simple Solution to SNAP Fraud

Why It Matters

Securing EBT cards protects vulnerable households, reduces wasteful government spending, and strengthens the integrity of the nation’s food‑assistance program.

Key Takeaways

• $320M SNAP fraud reported 2022‑2024
• Chip‑enabled EBT cards cut theft 83% in California
• Federal bill may mandate chip cards nationwide
• Implementation costs $2‑$5 per card, higher than magstripe
• States piloting mobile payments to bypass skimming

Pulse Analysis

The scale of SNAP fraud has become a fiscal and social crisis. Between late 2022 and 2024, the Government Accountability Office identified over $320 million in stolen benefits, a figure likely underreported due to limited detection. Criminals exploit the magnetic stripe on EBT cards, using skimmers to clone data and divert food assistance into resale markets. This not only deprives low‑income families of essential nutrition but also forces federal and state agencies to shoulder unrecoverable losses, eroding public confidence in safety‑net programs.

California’s transition to chip‑and‑tap EBT cards offers a concrete proof point that technology can curb this abuse. By issuing 4.4 million chip‑enabled cards in early 2025, the state saw reimbursements for stolen food benefits plunge from $8 million to under $1 million within a year, an 83 percent reduction. The chips generate single‑use transaction codes, rendering stolen data useless for future purchases. Other states—Oklahoma, Alabama, Maryland, New York—are replicating the model, while pilots in Massachusetts, Illinois, and Oklahoma explore mobile wallets that eliminate physical cards altogether. However, the upgrade carries a price tag of $2‑$5 per card, markedly higher than the 20‑40 cent cost of magnetic stripes, and requires retailers to update point‑of‑sale software.

Legislators are now moving to institutionalize these safeguards. A pending federal bill would require all states to adopt chip‑enabled EBT cards and compel retailers to accept them, with penalties on fraudsters earmarked for victim reimbursement. The USDA’s Food and Nutrition Service has already drafted technical standards, expected to be final by September 2026, but many states await clear guidance before committing resources. Accelerating nationwide adoption, coupled with complementary measures such as mobile‑payment pilots and stricter PIN policies, could close the fraud loop and restore confidence in SNAP’s ability to deliver nutrition to those who need it most.