How to Turn Food Stamps into Cash

According to federal officials in the United States, the black market in food stamps is estimated to account for  a little over 1 percent of the total food stamp program in the United States. In an article by the New York Times, the food stamp program was reported to be a $79.8 Billion program. Thus, the black market in food stamps is roughly $800 Million.

The black market in food stamps exists when people exchange the food stamps for cash. There are two types of black markets involving food stamps.  One such method would be for users to use their EBT cards are retails and simply receive cash back. An owner of a store stated that he would keep 30 cents for each dollar of food stamp that he dispensed for cash. Another method is to purchase food directly in return for cash. The Times reported on people advertising on Twitter and Craigslist who would pay cash for food. So the food stamp recipient would buy $200 worth of food using the food stamps, and then receive $100 in cash when handing over the groceries to the buyer.

Source:  Kim Severson, “Food Stamp Fraud, Rare but Troubling,” New York Times, December 18, 2013.