WIC EBT Feasibility Study and Cost‐Benefit Analysis

Virginia Department of Health WIC EBT Feasibility Study and Cost-Benefit Analysis
Comments received in interviews and from the survey indicated that one of the greatest
difficulties, and greatest time consumer in-lane, is the client who is at the register and has either
forgotten an item on the instrument or has selected a non-WIC authorized item, such as wrong
brand, wrong size, etc. The cashier and customers behind the WIC client then have to wait until
the client selects the appropriate product. This would not be avoided with the card, but clients
will be provided with a printed receipt of food items that they are authorized to purchase,
regardless of the technology.
3.4.3 RETAILER COSTS
Retailers incur incremental costs associated with repeated transactions. During the assessment
year, the following data associated with retailer transactions were recorded by the banking
contractor, Covansys:
Transaction Categories Sub-Categories Quantity Value
Payments 4,582,471 $93,819,551
ACH Payments 2,212 $413,717
Check Payments 4,580,259 $93,819,551
Net Rejections 39,723 $992,591
Fatal Rejections 8,588 $179,723
Altered FI 2 $37
Signature Missing 4,143 $77,236
Cashed Early 2,422 $50,649
Previously Rejected 667 $24,956
Price Not In Ink 374 $7,113
Signature Not In Ink 88 $1,896
Cashed Late 748 $14,531
Unauthorized Vendor 144 $3,305
Transactions Over Amount Allowable 14,863 $483,940
• Payments were made on over 4.5 million food instruments.
• ACH transactions are those exception payments, including adjustments, which required
review and approval by State staff. Once approved, the State authorizes an ACH
payment to the retailer’s financial institution. If FI redemption must go through State
review, there is a delay in payment to the retailer (cost of money).
• Net rejections are the number of rejected FIs handled by the bank over the course of the
year. Retailers deposit FIs using the same banking processes as when depositing checks.
Prior to deposit, all FIs must be stamped with a WIC Retailer Stamp, which contains the
retailer’s unique identifier number for the WIC Program. Some types of rejects, such as
an unreadable vendor number, can be sent back to the retailer for correction and representment
for payment. Those that cannot be corrected are considered to have a “fatal
rejection”. Regardless of whether the food instrument can be corrected, retailers pay a
bank fee for rejection handling, estimated to be $0.46 per reject, or $18,273 over the
assessment year.
• Fatal rejections are those food instruments rejected due to non-compliance with program
policies and that cannot be corrected by the retailer. Transactions that result in fatal
52 V 1.2 August 20, 2008 Appendix B: Baseline Analysis