John Klar: The fraud of EBT cards

Vermont Agency of Human Services

Official sites for Vermont Electronic Benefit Transfer cards caution that they are for use to buy groceries only. Here’s what you can’t buy with EBT: alcoholic beverages, tobacco products, and lottery tickets/gambling. But buy them they do.

Most Vermonters have no problem with those in need receiving assistance, especially during winter. But abuses of the “system” for public assistance should be policed and curtailed: currently they are not, and this is a significant problem. Many recipients of public subsidies use the money to purchase lottery tickets, alcohol and tobacco products.

This is not legal — official sites for Vermont Electronic Benefit Transfer (EBT) cards caution that they are for use to buy groceries only. The Vermont Department of Children and Families (DCF) states on its website:

You cannot use an ATM or make purchases using your cash benefits at a casino,  gaming establishment, liquor store, or strip club. Any benefits used at restricted locations will have to be repaid.

An instructive site similarly states:

Here’s what you can’t buy with EBT:

  • Alcoholic beverages
  • Tobacco products
  • Lottery tickets/gambling

But buy them they do. While the pretense of prohibition is presented by the government, the Catch-22 is that recipients can and do buy these verboten products using cash advances. DCF offers assistance for “personal needs and incidentals”: “Benefits are paid directly to vendors — except for personal need items, which are paid on EBT cards.”

The State’s link directs users to this explanation:

How It Works

  1. We send you an EBT card.
  2. You select a 4-digit Personal Identification Number (PIN).
  3. Your benefits are added to your card on the same date each month depending on the program — even on weekends and holidays.
  4. You use your card to buy goods or get cash, and your account balance decreases accordingly.

“How it works” is classic incompetent bureaucracy: recipients freely extract cash advances and then make their next purchase — of beer, cigarettes or alcohol — from the cashier who handed them back the cash. It’s easy:

After making a purchase, you may receive cashback above the cost of your purchase. More importantly, you may withdraw cash from your account in the stores even if you do not make any purchases. … It is important to note that an EBT card can be accessed for cash and benefits. It is possible to go with Authorized ATM and retail stores for cash benefits. When you are going to make any purchase, you can get cashback after using your EBT card.

In states where cannabis has been legalized for commercial sale, it is alleged EBT cards can be used to buy pot directly. Regardless, cash withdrawals permit those receiving assistance to buy pot on the black market as easily. Cash is also ready currency for prostitution (legalized or not), fentanyl, cocaine or heroine.

Ironically, welfare recipients often have children who are exposed to risk when their parents use alcohol or other drugs, or smoke cigarettes that expose children to second-hand smoke. More, gambling is a serious addiction; lottery tickets in particular are regressive, and disproportionately impact low-income people who often buy them in desperate hopes of crawling out of poverty.

People who work long hours and pay taxes to eke out a living in wintery Vermont must pay for their own alcohol, lottery tickets, cigarettes and illicit drugs (and, when legalized in Vermont, prostitutes). The cash register workers who dispense cash to EBT card holders are among those workers, and rightly express resentment. Meanwhile, Vermont provides free fentanyl test strips but not free insulin test strips, free Suboxone, and free transgender hormones and surgeries, but not free root canals or other provision for life-threatening dental issues.

As Thomas Sowell explains, government interventions to “create equity” always create new inequities. The bureaucratic corruption of the EBT card system is evident, but evidently will not be fixed: there is no incentive for the government to steward other people’s money. State workers at DCF get paid to process funds, not process them with integrity; progressive legislators push ever more programs to “help the poor,” not help those who work for a living and are made poor by ever higher taxes to fund inefficient, patently unfair programs.

Like the emperor with no clothes, the Vermont bureaucracy enables this open fraud while taxpayers watch in contempt, and the poor suffer most of all. Those who do not abuse the system are discredited by those who do; those who do abuse the system use alcohol, tobacco or lottery tickets to their own disadvantage, and that of their children; those who work for a living are made poorer by an unaccountable tax-and-spend bureaucracy that siphons off their hard-earned wealth to fund an immoral and corrupt set-up that looks like something from Uzbekistan or Rwanda.

Though, it is admittedly unfair to disparage Uzbekistan or Rwanda by comparing them to Vermont. Surely those nations wouldn’t enable a scheme this easily manipulated.

John Klar is an attorney and farmer residing in Brookfield. © Copyright True North Reports 2022. All rights reserved.

Image courtesy of Vermont Agency of Human Services
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17 thoughts on “John Klar: The fraud of EBT cards

  1. If a person wants to buy “luxury” or “feel good” items or lottery tickets, get a job!! An EBT card is supposed to supply you with the basics. Vermont is way too government-dependent.

  2. I live in NH and I don’t understand how this is happening in Vermont.
    Over here, our EBT cards simply do not allow any purchases that are not FOOD only..
    When you cash out, all food items are totaled and the EBT card is used. Then the balance gets paid by the card holder on their own.. however they want to do this, cash, another card, whatever.
    And when I say Food, it’s FOOD. Toothpaste, vitamins, mouthwash, these are not covered, it truly sorts out and covers food and that is it.

    So how is it not working this way in Vermont?
    The technology exists for the card to simply not cover anything at all that is not food.

    • You don’t know that it is happening. You only know partisan hyperbole.

      Because of the trashing of the poor as evidenced on this site, it is reasonable for EBT users to withdraw as much cash as they can so that they don’t have to face judgment in at the check out counter each time they use it.

      They could VERY likely be putting the cash away for the next time they need to grocery shop.
      I’ve seen MANY non-EBT people load up their carts with garbage. It’s just as disgusting as EBT users. But, seems folks on here have saved their bashing for poor people.

  3. “There is no documentation…….how serious is the problem?”
    There would be documentation and we would know how serious the problem if anyone cared, don’t you think?

    • Well, do you care? If you do, nothing’s stopping you from figuring out how to find the data. It’s quite disappointing that somebody would write such an unsupported article. It’s almost as though they simply want to make people irritable.

  4. People buy unhealthy foods for several reasons. One is that they are cheaper. Another is that those foods are packaged to attract the uninformed buyers. Another is that buyers never learned about the basics of good nutrition (consider that 40 percent of schoolchildren make their own breakfasts and that not a one of them knows about the effects of simple carbohydrates, complex carbohydrates and fats on blood glucose levels).

    So, solutions to the as-yet-unproven massive fraud of EBT card use are: 1) Tax foods that are harmful to buyers (okay, who wants to start with cookies and Lucky Charms?). 2) Provide more funding for what used to be Home Economics in school so that children learn to properly value unprocessed over processed foods (e.g., potatoes versus potato chips). 3) Provide teachers, students, employers and employees information about how they are affected by deficient and excessive blood glucose levels. 4) Give women the right to have as many children as they want, so they can avoid having to hold two jobs to feed them and can be home to make breakfast for them when their significant male can’t.

    • You’re off in unicorn and fairy dust land , again.

      The solution is simple…K.I.S.S….food stamps (EBT) no longer be valid for any and all junk food, soda, chips, ice cream etc… I suppose we have to allow some frozen dinners….but majority of it must be spent in these aisles…..Dairy, Fresh Vegetables, Fresh fruits…fresh meat, decent breads,,……..cheese…pasta

      This is easily accomplished as most all packaged goods have UNIVERSAL BAR CODES…so it is easy to remove Lay’s potato chips.

      • good points, jeffery, but they do nothing to remove the fog of ignorance the users shop in. Let’s shoot for something that liberates them from commercials!

  5. Vermont’s Electronic Benefit Transfer (EBT) Card, now that’s a real boondoggle,
    but what else would one expect from the Government and allowing this card to be used
    for ” cash” withdrawals……. with no verification of the usage for the cash, now there is a
    problem !!

    Just let me say, I live a good life and have always lived within my means, when I go
    grocery shopping, I can always tell those on public assistants ” AKA” using an EBT card
    as I stand there with six or ten necessity items, the person in front of me has two, yes two
    shopping carts full to the brim with every piece of junk food known to man and then out
    comes the EBT card…..WOW, they don’t look like they are down and out, but just burning
    through this taxpayer benefit………pretty pathetic.

    Do I think some, if not all would abuse this benefit by buying alcohol, cigarettes, and lottery
    tickets…….. you bet and why wouldn’t they as there is no one in the government checking to
    verify any abuse !!

  6. I often saw EBT card holders getting some cash back and it went right into their pockets. So they just go to the next store and buy booze or cigs. But you miss the larger “fraud”. I hated being in my supermarket on the 1st of any month. b/c of massive checkout crowds – and it was with EBT. It wasn’t unusual to see them using two shopping carts…many with very young kids in tow.. I rarely saw them in the vegetable, dairy or fresh fruit aisles…but at checkout I’d see potato chips, ice cream, frozen foods (especially pizza), terrible canned vegetables, potato chip, soda, cookies etc….it was 80% JUNK food. Many of these EBT buyers were also very overweight and terrible diets. I’d venture many were diabetic…some w/ grossly swollen legs unable to walk… they needed electric carts & wheelchairs (both in store & out of store)… So many are of ill helth, but they won’t do anything about it…because all the junk food – to make them such poor helth, terrible diet (and thus their children)…is FREE & PAID FOR BY VERMONT….so after VT pays them – for a junk-fat poor diet…Vermont is LATER provides them with FREE MEDICAID. .VT causes much of poor diets & illness….then VT turns around and treats it… I saw so many, so overweight, so diabetic using electric wheelchairs…. no doubt are free and paid for…But then they say they are disabled and need specialized & subsidzed HOUSING…then free transportion. So.. get sick, get fat, get bad health…create problems and then you then can also get free/ subsidized housing (heat and elec included), free transportation and almost all the junk food you can eat, with some saved for cigs and booze after. Then, the next step is they fille for “Social Security Disbility” and get REAL money, monthly, for the rest of their life…with zero restrictions….drugs, booze, cgs…whatever you wish.

    First step of EBT “fraud” is to REMOVE all junk food from eligibility…especially if they have children.

  7. Um, there is no documentation supporting these claims. I can accept that there are probably some people who skirt the regulations, but how serious is the problem? 95% of them? 50%? 0.0125%? At what level of misuse do we want to end EBT and let the rest of the poor starve?

    This article is at the same level as dumping on Medicare because it allows little old grandmothers to indulge their hobby of hypochondria by visiting multiple doctors, when the real problem is Rick Scott bilking Medicare of $84 billion.

  8. As a recipient of your food stamp program. I do have a problem with people doing exactly what you say. But unless the rules have changed, people on real welfare do not get the chance to cash out a EBT card. IF you are like me and get on disability and or retirement and get food stamps it is listed under cash… Why, to pay for scripts and things like that, that must be paid for. Plus unlike most we shop around to truly local people for food and guess what, they don’t take “food stamps”, just cash.
    Until recently Amazon did not take that EBT cards. Had to convert to cash first.
    I think your gripe is with the people who are afforded Social Security simply because they are in this country. It is standard to get money from both Federal and State coffers when you are an alien, whether illegal or not. I worked most of my life and PAID into that system against my will and then had to fight after a brutal injury not of my making, to get a pittance from that same government. No, I do see where you have confused people like me with the welfare scum that live, I am sorry in the Burlington area or where ever the government has dropped them. I don’t gamble nor do I drink. I don’t go to the pot shops and I resent people who make it so you have to question a program like that, that has saved so many of various ages. Remember if you bitch too much they may make it so you are restricted in what you buy with that same card. The State LOVES making life harder so they feel better. Just think about the new standards for home heat and for other such things,” all for the better”. Really? Who asked for it? Remember, “I’m from the government and I am here to help”.

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