Why Doesn't Costco Accept Food Stamps?

The New York Times City Room blog asks an interesting question. Why doesn’t Costco accept food stamps? Even farmers markets accept them! What’s the deal, Costco?

From the NYT:

According to Mr. Gioia’s office, executives at Costco told the office that they declined to accept food stamps for three reasons.

They did not think they would qualify based on the federal government requirements.
It was too expensive to adapt their equipment to accept food stamps.
With their annual fee/bulk-purchase model, people on food stamps probably could not shop there anyway.

Are these valid concerns? If the corner bodega could qualify to accept food stamps, why would Costco, a publicly traded company with $71 billion in annual revenue, not qualify?

The article goes on to examine each concern — and none of them were particularly compelling. For example– the “too expensive” excuse: “…stores that average more than $100 a month in food stamp transactions per customer can receive devices from their state governments that accept the debit cards free of charge,” says the NYT.

The NYT also says that the government reimburses retailers 100% for food stamp purchases. And what about the argument that people who use food stamps wouldn’t want to shop at Costco?

While some food stamps recipients are destitute and could not come up with the $50, many surely would pay the fee if they knew that it would save them far more money over time, said Joel Berg, executive director of the New York City Coalition Against Hunger.

Mr. Gioia added, “Not only does it amount to 14 cents a day, but you’ll find that people who are on a fixed income and trying to feed their children become amazingly sophisticated at making smart economic choices.”

Mr. Berg noted that the Agriculture Department recently did a survey that found that food stamps recipients spent an average of $6 to travel for their food shopping, which probably means that many poor people are savvy enough to pay for car services and taxis to travel longer distances to buy food at discount stores that do accept food stamps.

“I am sure that many food stamp recipients would scrimp and save and borrow and do what it takes to get into a discount program — particularly since there are about 30,000 public housing residents near the Astoria Costco,” Mr. Berg argued.

Why Doesn’t Costco Accept Food Stamps? [NYT] (Thanks, Joanne!)
(Photo: greenwenvy08 )

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