Market Currency Systems
Most farmers markets using a centralized POS device (often located at a market manager’s booth or a market information stand) use some form of market currency—also known as “scrip”—to facilitate SNAP transactions. Many markets use wooden or plastic tokens, some use paper scrip (i.e., paper currency), and some markets have also explored using electronic tokens.
Note: markets using a market currency to represent SNAP benefits may wish to use a similar system to represent debit and credit purchases so that customers without cash are also able make purchases at vendors that do not have their own debit/credit card machines.
Case Study Spotlight: Crescent City
Learn how a market currency system enabled a farmers market to accept SNAP benefits in New Orleans, Louisiana.
Read the Case Study- How do market currency systems work?
- How does the market reimburse vendors for these non-cash transactions?
- Does the market need to request permission to create a market currency, like tokens?
- Is a market-administered system with market currency right for my market?
- What legal responsibilities do markets assume when they operate a centralized POS device to accept SNAP EBT?
- How can a market using market currency protect against trafficking, fraud, and counterfeit scrip?
- Can a market use the same tokens/scrip to represent SNAP benefits and credit or debit purchases?
- Can markets give customers cash change for items purchased with SNAP tokens or paper scrip? What about for tokens representing credit/debit payment?
- Can a market accept market currency from another market?
- Is a SNAP customer required to spend all of his or her market currency during the market visit in which the tokens are received?
- Can a market put expiration dates on SNAP currency?
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How do market currency systems work?
Markets can chose between using tokens or paper scrip as their form of market currency:
1) Tokens
- A customer visits the market’s centralized SNAP POS device and informs the operator how many SNAP dollars he or she would like to spend at the market.
- The POS device operator processes the customer’s SNAP EBT card, charging the requested amount, and then provides the customer with tokens of equivalent value.
- The customer shops at the market, purchasing SNAP-eligible products using the tokens. For more information on SNAP-eligible foods, click here. Markets commonly require that vendors never give change back with SNAP tokens for a variety of reasons (see note below). SNAP customers who wish to have change returned to their SNAP EBT card may do so at the main POS device. However, vendors can provide change when customers use debit/credit tokens, if the market provides them.
When choosing SNAP market currency denomination, markets should consider that the smaller the token or scrip’s denomination, the less change a customer risks losing in a transaction where the foods purchased amount to less than the token or scrip’s value. To maximize the SNAP dollars, markets predominately use $1 tokens denomination to represent $1 in SNAP benefits, although other denominations are often used too.
Note: Federal regulations currently state that SNAP recipients are able to receive change in cash up to 99 cents from SNAP transactions. (See regulation here.) However, the common practice of most farmers markets, written advice from national farmers market organizations, and guidance in SNAP training materials from FNS itself (see here at page 9) is to never give change in cash for SNAP transactions. Exchanging SNAP benefits for cash in general is considered a form of trafficking, which can result in penalties for the market (see the Enforcement and Penalties page for more information).
Visually Distinct Tokens
According to FNS, if your market provides tokens in exchange for credit/debit payments (so that customers without cash can make purchases from vendors without their own credit/debit card machines), it must make SNAP and non-SNAP tokens VISUALLY DISTINCT so that the market, vendor, and customer may recognize the different currencies and comply with their associated rules. Specifically, SNAP and credit/debit tokens must either:
- Be of different denominations (Example: $1 vs. $5), or
- Feature distinct designs.
2) Paper Scrip
Markets using a centralized POS device may instead use paper scrip (paper currency similar in appearance to coupons) in the same manner outlined above for tokens. That is, they may permit customers to use SNAP EBT cards (and debit or credit cards) to purchase paper currency for use with vendors. As with tokens, vendors return the scrip to the market for reimbursement. Like tokens, paper scrip for SNAP must be visually distinct from any non-SNAP market currency. Additionally, paper scrip must be non-photocopiable.
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How does the market reimburse vendors for these non-cash transactions?
After market day, vendors submit the market currency that they received to the market manager or other responsible person for reimbursement. Often, reimbursement is not immediate, but follows a schedule that market leaders and vendors have agreed upon in advance.
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Does the market need to request permission to create a market currency, like tokens?
No. If a market intends to implement a token/scrip program, it must inform FNS as part of the application process for becoming a SNAP-authorized retailer. But it does not need FNS’s permission to do so.
Historically, FNS required markets to complete a waiver application with their state SNAP agency in order to use a scrip currency system. However, in 2010, as these alternative systems became increasingly common at farmers markets, FNS revised its policy “[i]n the interest of streamlining the implementation of farmers market scrip.” Namely, FNS eliminated the waiver requirement with respect to both scrip systems and SNAP incentive programs. As a result, markets are no longer required to submit proposals or annual reports to FNS to operate scrip or incentive programs; however, if a program is funded by a private institution, the private institution may have its own documentation requirements.
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Is a market-administered system with market currency right for my market?
It depends. Consider the following advantages and disadvantages of a market-administered SNAP program with market currency:
Farmers Markets
Advantages Disadvantages Enables markets to expand access to food, broaden market accessibility within the community, and potentially increase market and vendor revenue. Cost of implementing the system (POS equipment & fees, market currency materials, labor, administration, accounting, etc.). Note: free SNAP EBT POS equipment may be available in your state. Check with the Farmers Market Coalition (FMC) and/or your state or regional association. As the authorized retailer, the market is liable and subject to penalties for illegal SNAP transactions (even those by vendors). Vendors
Advantages Disadvantages Potential increase in sales (to SNAP-eligible customers who might not otherwise shop at the market). Reimbursements for SNAP transactions are not always immediate. Scrip transactions are as fast as cash transactions. Vendors must distinguish between SNAP and debit/credit scrip, ensure that only SNAP-eligible items are being purchased with SNAP scrip, and track all scrip received. Vendors may lose or misplace scrip. Customers
Advantages Disadvantages SNAP customers may purchase foods from all vendors selling SNAP-eligible items, regardless of whether the vendor has their own POS device. SNAP customers do not receive cash change for scrip purchases, so they risk losing SNAP funds in exchanges where the dollar value of food purchased is less than the market’s lowest SNAP scrip denomination. SNAP customers may feel stigmatized if scrip is only used for SNAP payments (not debit/credit). To customers, the scrip system may feel unfamiliar or uncomfortable. Customers may lose or misplace scrip.
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What legal responsibilities do markets assume when they operate a centralized POS device to accept SNAP EBT?
Farmers markets that are SNAP-authorized retailers must follow all SNAP laws, regulations, and the terms of their state or private POS device retailer agreements. To review the laws and rules governing SNAP, click on the links in the table below.
SNAP Statute SNAP regulations The law Congress passed establishing the SNAP program and authorizing the USDA to create program rules (7 U.S.C. 51). The rules the USDA created to implement the SNAP statute (7 C.F.R. 271-285). Among other requirements, markets must:
- Become licensed by FNS to accept SNAP benefits (i.e., become a SNAP-authorized retailer) and undertake reauthorization as required.
- Design and purchase tokens or print paper scrip. According to FNS, the scrip must be hard to counterfeit. For paper scrip, non-photocopiable paper is required. (FNS advises placing sequential serial numbers on all paper scrip.)
- Train all market personnel and vendors in SNAP rules and procedures. (The market’s ability to accept SNAP benefits could be jeopardized if a vendor commits a SNAP violation while operating under the market's FNS license.) For training requirements and materials, review:
- FNS’s SNAP Training Expectations
- FNS’s Retailers Store Training Information
- Farmers Market Coalition’s EBT Vendor Policies & Training
- Post a sign designed and provided by FNS which provides information on how people may report abuses they have observed in the operation of the SNAP program.
- Develop an accounting system and a method for reimbursing vendors.
- Determine a secure place where the POS equipment, tokens, and supplies will be stored when not in use, and decide who will be responsible for proper storage.
- Provide refunds. Under federal law, SNAP customers are entitled to refunds on their EBT cards - not in cash - for unused SNAP tokens/scrip.
- Guard against trafficking. In short, “trafficking” is the exchange of SNAP benefits for cash or non-eligible items. (Read a full definition of “trafficking” here.) Trafficking can result in disqualification from the SNAP program, monetary penalties, and/or criminal prosecution. For tips on avoiding trafficking, see next question below. For more on potential consequences of SNAP violations, click here.
- Guard against fraud. In short, fraud involves being dishonest to the government. Examples include lying on an application to become SNAP authorized or knowingly accepting EBT cards from people who have no right to possess them. Fraud can result in disqualification from the SNAP program, monetary penalties, and/or criminal prosecution. For tips on avoiding fraud, see next question below. For more on SNAP fraud, click here.
- Guard against counterfeit scrip. SNAP-authorized farmers markets must “take all precautions necessary” to avoid accepting SNAP benefits presented in an unauthorized or counterfeit form, including:
- (1) Accepting false tokens or photocopied paper scrip.
- (2) Accepting tokens or paper scrip that are not original to or distributed by the market or authorized organization.
- (3) Accepting scrip or tokens that were acquired under false pretenses (such as tokens ordered from a manufacturer without the market’s permission).
For tips on avoiding counterfeit scrip, see the next question.
Note: At the time of this publication, there are no known instances of farmers markets being penalized for fraud or trafficking. Nonetheless, FNS continues to emphasize its “zero tolerance policy on fraud.”
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How can a market using market currency protect against trafficking, fraud, and counterfeit scrip?
Training
Markets can train personnel involved in operating SNAP regarding key SNAP rules. Review:
- FNS’s SNAP Training Expectations
- FNS’s Retailers Store Training Information
- Farmers Market Coalition’s EBT Vendor Policies & Training
Careful Scrip Design
Markets should design scrip to include “anti-counterfeiting features” - design elements specific to the market.
- Most commonly, markets order wooden tokens that feature the name of the market and an image (like the market’s logo). These tailored tokens are more difficult to counterfeit than plastic poker chips or paper scrip.
- If the market is using paper scrip, the scrip should feature individualized bar codes or serial numbers, or other design elements specific to the market and to each piece of paper scrip.
- Paper scrip should also be created on paper that is not easily photocopied, such as “Kant Kopy” paper, paper that is laminated, or paper that includes a raised, embossed watermark.
Maintain Scrip Protocols
The market should ensure that only one member of the market is authorized to order additional tokens from the provider. In addition, markets should make sure that they have an organized system for handling and storing tokens that are not in use.
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Can a market use the same tokens/scrip to represent SNAP benefits and credit or debit purchases?
No. The USDA requires markets to distinguish between SNAP scrip (tokens or paper) and credit/debit scrip. The scrip may appear different in design, color, size, or denomination. This distinction ensures that SNAP currency is used only to purchase SNAP-eligible items.
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Can markets give customers cash change for items purchased with SNAP tokens or paper scrip? What about for tokens representing credit/debit payment?
Markets can always refund unused SNAP funds onto a customer’s EBT card. Federal regulations currently state that SNAP recipients are able to receive change in cash up to 99 cents from SNAP transactions. (See regulation here.) However, the common practice of most farmers markets, written advice from national farmers market organizations, and guidance in SNAP training materials from FNS (see here at page 9) is to never give change in cash for SNAP transactions. Exchanging SNAP benefits for cash in general is considered a form of trafficking, which can result in penalties for the market.
To avoid shortchanging customers for SNAP token or scrip transactions, markets should consider that the smaller the token or scrip’s denomination, the less change a customer risks losing in a SNAP transaction where the foods purchased amount to less than the token or scrip’s value. To maximize SNAP dollars, many markets use $1 tokens and recommend that vendors sell products in whole dollar amounts as much as possible.
By contrast, vendors may provide cash change to any customer using scrip that represents credit/debit dollars, which are not federal benefits and do not raise the same trafficking concerns. This distinction is important to understand for markets and vendors accepting scrip representing both SNAP EBT benefits and credit/debit purchases.
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Can a market accept market currency from another market?
No. Although a market may accept a SNAP EBT card from an out-of-state SNAP user, one farmers market may not accept SNAP tokens or paper scrip from another farmers market.
If a market (or vendor) accidentally accepts market currency from another market, it should attempt to return the market currency to the rightful market to enable that market to properly account for its SNAP transactions. Anti-counterfeit features on currency will help prevent or flag their accidental use at the wrong market.
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Is a SNAP customer required to spend all of his or her market currency during the market visit in which the tokens are received?
No. SNAP tokens and paper scrip do not expire (see more on expiration in the question below). Customers may return to the same market at any point and spend (or request a refund for) their leftover tokens or paper scrip.
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Can a market put expiration dates on SNAP currency?
There is no FNS rule or regulation that prohibits placing expiration dates on SNAP currency, but SNAP customers must be able to redeem tokens purchased with SNAP benefits at any time the market is open for business. SNAP customers are also entitled to refunds on their EBT cards for unused SNAP tokens/scrip. Placing expiration dates on SNAP currency may help markets reduce challenges associated with accounting for unredeemed/outstanding tokens, which represent money the market owes to third parties; however, it should not be done without seeking FNS guidance first. Some farmers markets have reported receiving direct guidance from FNS that expiration dates are impermissible, even though FNS does not currently have formal written guidance on this topic.
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