by Steven Richards
More than 5,000 liquor and smoke shops were approved as retailers under SNAP, raising fraud concerns. There's no way to determine how much alcohol, tobacco, or other "non-compliant" goods have been sold nationwide. At least 20 states refuse to share data with the feds.
Food stamps were first issued in 1939 as an assistance program to prevent starvation during the Great Depression. But 86 years later, thousands of liquor stores and smoke shops have become approved retailers, increasing the possibility of fraud, new research shows.
The longest ever government shutdown, which ended after 43 days of deadlock, thrust the federal food stamp program into the national spotlight as millions of recipients went without benefits. But, it also laid bare many abuses in the system.
Even before the shutdown, the Trump administration planned to crack down on fraud in the Supplemental Nutrition Assistance Program (SNAP) program and ensure any government assistance is used for healthy and nutritional foods, not junk. The One Big Beautiful Bill Act made specific changes to qualifying for the program, as well as a redefined list of products for which SNAP cannot be used.
An analysis of SNAP retailer data by the Foundation for Government Accountability published on Monday found that more than 5,000 liquor and smoke shops were approved retailers under the program, meaning they can accept food stamps, according to research findings shared exclusively with Just the News.
Breaking down the data, more than 4,000 stores promoted alcohol in their title and another 1,000 did so for tobacco. The foundation told Just the News the real numbers could be even higher, considering researchers only counted stores that referenced those products in their titles.
"Hotbeds of fraud": Benefits used for tobacco, alcohol
Food stamps cannot be used for purchases of either alcohol or tobacco. However, the FGA says the prevalence of stores that sell these products raises concerns about the potential for different kinds of SNAP fraud. These stores “become hotbeds of fraud” where benefit cards are bought and sold in exchange for alcohol or tobacco products, Senior Data Analyst at FGA Kristi Stahr told Just the News.
The Food Stamp Act of 1964, which first established the SNAP program in its modern form, permitted funds to be used for all items for human consumption except alcohol. That prohibition still stands. Recipients are also prohibited from buying cigarettes, tobacco products, and other items like pet food and cosmetics.
A review of SNAP fraud cases by a law firm shows that food stamp recipients and store owners have been involved in schemes to illegally sell benefits or swap them for non-eligible purchases at stores, such as alcohol or tobacco.
“Food stamps are meant to provide supplemental nutrition for vulnerable populations: low-income kids, the elderly, and people with disabilities,” said Michael Greibrok, Senior Research Fellow at FGA. “Letting smoke shops and liquor stores cash in on the program is not the safety net taxpayers envisioned and only funnels assistance away from the truly needy.”
Liquor and tobacco stores are not new to the SNAP list of approved vendors, but the data shows the majority of stores listed have only been approved in the last five years. According to FGA, half of all liquor and tobacco stores were approved as vendors during the four years of the Biden administration.
Smoke shops not likely to sell nutritional food products
Additionally, the prevalence of liquor and smoke shops on the approved vendor list raises questions about health. These stores are unlikely to provide food products of substantial nutritional value that SNAP is designed to supplement, FGA says.
“At best, places to buy your weekend six-pack and vape are unlikely to provide much nutritional value. At worst, smoke shops and liquor stores are ripe targets for scammers and fraud schemes. Keeping them on the ‘authorized retailers’ list makes defrauding and fleecing federal taxpayers easier and sends the wrong message to hardworking Americans,” Greibrok said.
High-risk retailers get approved as “authorized retailers” for SNAP/EBT even though they primarily sell alcohol and tobacco, which cannot be purchased with food stamps.
According to FGA, these kinds of stores should be considered “high-risk retailers” because of their vulnerability to food stamp fraud that puts a financial burden on the program and U.S. taxpayers. Even though these retailers would not normally be considered food vendors, they receive approval for SNAP/EBT benefits. But, because these benefits cannot be used to purchase alcohol or tobacco, they are ripe for fraud.
There have been many documented cases of illegal buying, selling, and trading of food stamp benefits. Both food stamp recipients and store owners have been involved in schemes to buy and sell benefits.
Just a handful of examples illustrate the problem. In 2018, one North Carolina grocery store was caught accepting SNAP benefits for non-food products in a $200,000 fraud scheme. The following year, a Virginia grocery store owner was sentenced to 20 years for trafficking more than $1.5 million in SNAP benefits. In 2020 in California, a man was convicted for selling SNAP benefits in exchange for cash, which resulted in a hefty fine and prison time.
According to the report from FGA, more than 70% of all food stamp traffickers are convenience stores like the liquor and smoke shops found in the database and about half of all liquor and smoke shops identified by the group were approved as retailers during the Biden administration.
Program costs explode
Costs for the federal food stamp program have soared. In 2025, the costs of the program are estimated to be just over $100 billion, up from the mere $17.1 billion cost for food stamps in 2000, U.S. Department of Agriculture data analyzed by FGA shows.
Department of Agriculture Secretary Brooke Rollins and the White House are working on reforming the SNAP program to eliminate waste and abuse.
Earlier this year, Rollins proposed changes to the program to increase the variety of staple foods like dairy and protein and to eliminate loopholes that allow stamps to be used for snack foods.
To understand the scope of the problems with the program, Rollins asked each state to send their SNAP data to the USDA. The secretary said that in the data already shared with the agency, the department has uncovered “massive fraud.” However, many states have refused to turn over their SNAP data on privacy grounds.
Reuters reported that more than 20 of those states sued the Trump administration this summer over the data request. California, the state with the greatest number of SNAP recipients at 5.3 million, led the lawsuit. California was joined by many Democrat-controlled states across the country, including New Jersey, New York, Michigan, and Illinois. In September, the District Court for Northern California issued a temporary restraining order blocking the Trump administration from enforcing SNAP cuts to states that refused to turn over the data. The court has yet to rule on the challenge.
Nearly half of all the alcohol and smoke shop retailers are located in California, FGA told Just the News.
In order to crack down on fraud without the full data, the Trump administration recently mandated that recipients of food stamps must reapply to the program to ensure eligibility, although the Agriculture Department’s timeline for implementing these changes is not clear.
Steven Richards
Source: https://justthenews.com/accountability/waste-fraud-and-abuse/mon-new-food-stamp-data-show-thousands-liquor-and-smoke-shops
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