Many California counties were impacted by severe storms, flooding, landslides, and mudslides in February and March 2023. SNAP beneficiaries in the Golden State were affected the most, having lost scarce food purchased with SNAP benefits due to power outages and other adverse effects of the storms. Since early March, USDA’s Food & Nutrition Service (FNS) has approved numerous requests from California’s Department of Socal Services (CDSS) to waive the 10-day reporting requirement in more than twenty counties for replacement of food purchased with SNAP benefits that were lost as a result of prolonged power outages due to those winter storms. FNS has also granted three waivers of the statutory definition of “food” to permit SNAP households to purchase hot foods with SNAP benefits. While the first two waivers have expired, on May 8, 2023, FNS granted another hot foods waiver in Alpine, Fresno, Glenn, Humboldt, Inyo, Lake, Madera, Mariposa, Mendocino, Merced, Mono, Sonoma, Tehama, Trinity, and Tuolumne countries. This FNS waiver is in effect in those counties until May 31, 2023. SNAP retailers should have been notified of FNS’s waiver via email and/or telephonic notice. At this time, a hot foods waiver is also active until May 28, 2023, in 13 counties in Mississippi following storms, derechos, and tornados in the Magnolia State.
The Food and Nutrition Act of 2008 generally prohibits the sale of hot foods in exchange for SNAP benefits. That prohibition has been temporarily waived, permitting SNAP beneficiaries to use their benefits to purchase hot foods at a time they may not have access to cooking facilities. During non-waiver periods, many SNAP retailers across the country avoid this restriction by selling cold-eligible food items to customers who pay for the items with SNAP benefits, and then heating or cooking them, post-sale. FNS has repeatedly confirmed that this practice is permissible as long as SNAP benefits are not used to pay for any heating or cooking charges. FNS characterizes those retailers as “you buy, we fry” stores. Those types of retailers should be wary of these practices if their sales of hot and cold foods prepared on-site (pre-sale or post-sale) constitute more than 50% of their gross receipts. If those sales exceed the 50% threshold, FNS will conclude that the retailer is a restaurant pursuant to its December 2016 Final Rule. Other retailers that sell substantial amounts of hot and cold prepared foods should also be extremely wary because FNS’s snare is indiscriminate and the agency has withdrawn the SNAP authorization of many retailers who neither cook nor heat staple food items for customers post-sale.
Retailers who apply for SNAP authorization or re-authorization should also take care regarding their reported sales data on FNS Forms 252 and 252-R. Firms that indicate that a majority of their gross receipts are derived from the sale of hot or cold prepared foods are likely to receive numerous supplemental requests for sales spreadsheets, register receipts, Z-tapes, and other data. FNS’s guidance regarding prepared foods is hardly a model of clarity and results in widespread confusion for retailers regarding how to calculate sales figures for FNS reporting purposes. OFW Principal Stewart Fried has over a decade’s experience representing SNAP retailers on matters ranging from applications for SNAP authorization to responding to charge letters to litigation against the federal government across the country and is able to assist grocery stores, convenience stores, supermarkets, and other retailers in navigating these complex waters.
