Online grocery shopping is increasingly popular in the United States—approximately 70 percent of U.S. households placed one or more online grocery order last year—but unfortunately, this option is mostly out of reach for the 46 million Americans who rely on government programs to pay for groceries. However, there are several steps that the federal government can take to make it easier for individuals facing food insecurity to buy groceries online.
The U.S. Department of Agriculture (USDA) runs two major federal food assistance programs: the Supplemental Nutrition Assistance Program (SNAP) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). Recipients receive benefits on an Electronic Benefits Transfer (EBT) card which they can use to pay for groceries. Unfortunately, not many grocery stores accept EBT for online shopping for SNAP, and none accept it for WIC. Moreover, individuals cannot use their existing SNAP benefits to pay for any fees associated with shipping, local delivery, or pick-up and some people do not have a secondary digital payment method to use to cover these fees. As a result, many SNAP and WIC recipients cannot benefit from the convenience, time savings, and product and price transparency that online grocery offers, or use online shopping to find eligible items and adhere to a budget.
The government has made some progress on this issue in the past few years to address this problem. The USDA launched the SNAP Online Purchasing Pilot in 2019 to test the feasibility and implications of using EBT to pay for online grocery purchases. The pilot, which initially selected eight retailers in eight states, expanded rapidly due to the pandemic, ultimately reaching 90 percent of SNAP households by August 2020. However, despite broad reach, online purchasing accounted for less than four percent of all SNAP benefit redemption in fiscal year 2021, even as online grew to 13 percent of total grocery spending in the United States.
There are three important steps the government can take to expand access to online grocery shopping to SNAP and WIC recipients.
First, the USDA should develop clear guidelines for states to establish WIC online purchasing programs. Guidelines should rely on information learned from SNAP’s online purchasing pilot and address concerns unique to WIC, such as specific product availability, product replacement, and stocking requirements. Establishing federal guidance would help states begin the transition to online WIC purchasing and ultimately expand online grocery eligibility for six million Americans.
Next, Congress should pass legislation to formalize SNAP’s use for buying groceries online. The Expanding SNAP Options Act of 2021 would increase retailer utilization of online SNAP purchasing by creating a technical assistance center and a secure EBT redemption portal. This legislation would simplify the e-commerce authorization process for retailers by removing the need for retailers to develop these features at their own cost. Increasing grocery retailer options would improve flexibility for recipients and provide greater choice for benefit redemption.
Finally, the USDA should launch a short-term pilot program to research the impact of allowing SNAP recipients to pay online grocery delivery fees with existing benefits. While some grocery delivery services have waived these fees for SNAP recipients—Instacart offers a limited free delivery trial, while Amazon offers free grocery delivery for EBT purchases without requiring a Prime membership—most retailers still charge fees in the range of $5 to $10. The option to pay these fees from their existing benefits could give many individuals, such as the 25 percent of SNAP recipients who are elderly or have disabilities or consumers without access to credit or debit cards, more choices and flexibility for using their benefits and increase access to groceries. Online grocery shopping could also benefit the 12 percent of Americans who live in food deserts (census tracts where a significant percentage of low-income residents live more than one mile in urban areas or 10 miles in rural areas from the nearest grocery store). Many SNAP recipients will likely prefer to continue using their limited government assistance on groceries rather than on delivery fees, but creating this option for the nation’s top anti-hunger program may allow recipients greater freedom and dignity.
To ensure Americans have access to healthy, affordable food, policymakers should take additional steps to modernize nutritional assistance programs so that recipients can access online shopping options. These steps would help improve utilization of benefits, increase options for consumers, and better support individuals struggling with food insecurity.