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Summary of the California Depart. of Social Services’ invitation to partner for electronic benefits

For more information contact:

West Coast Office





Revised October 30, 2000

Description of the EBT system

Electronic Benefit Transfer (EBT), the new way to deliver food stamps and potentially cash benefits is federally mandated to be implemented in all states by October 2002.

The State’s bid request describes an EBT system where the State contracts with a private vendor to provide electronic delivery of Food Stamp Program benefits. The system will be designed to also provide cash grants including CalWORKs and General Assistance. Each county must decide whether to also use EBT for cash benefits.

The technology that will be used is similar to an automated teller machine (ATM) or debit card in which the recipient conducts transactions using a wallet-sized card with a magnetic stripe and a personal identification number (PIN). The balance and transaction information is stored and relayed in the same manner debit card information is.


What is the role of the county?

Counties will continue to handle eligibility determination, emergency benefits, and benefit adjustments. Counties will also process requests to replace a lost card, and will handle appeals of denials by the contractor to resolve errors in the account. Counties will have to decide whether to issue new cards and replacement cards over-the-counter or to have the contractor mail them to recipients.

When will benefits be available?

Benefits will be available by 5 a.m. on the designated issuance day.

Staggering of benefits

CalWORKs benefits will be staggered over the first three calendar days of the month. Food stamp benefits will be staggered over the first ten calendar days of the month. Counties choosing to use EBT for General Assistance/General Relief (GA/GR) benefits must stagger over at least three days, but may stagger over a longer period at the county’s discretion. Counties are free to switch to benefit cycling similar to that used in Fresno County.

Unused benefits

Accounts will be designated as dormant if there have been no debits (purchases or withdrawals) for 45 to 89 days. The county will send a notice to the recipient after 60 days of inactivity. After 90 days, food stamp benefits are moved offline. The benefits are still in the account, but can be reached only if the county requests that the benefits be restored to on-line status. This takes up to 24 hours after the county makes the request. Benefits are expunged (eliminated) after they have been in offline storage for 180 days. Benefits will be expunged for both cash and food stamp accounts. The bid request does not require the contractor to send any notice to the recipient before benefits are expunged.

Other Benefits

The EBT system will be set up initially to disburse food stamp benefits, CalWORKs, RCA/ECA, CAPI and GA/GR. Over the life of the contract, the State reserves the right to add the following benefits to the system: foster care payments, child care payments, child support payments, Welfare-to-Work, In-Home Supportive Services, special circumstances, vendor payments, WIC, Worker’s Compensation, Low-Income Home Energy Assistance Program, and direct federal benefits.

EBT cards and Personal Identification Numbers (PINs)

EBT cards will look and work like bank debit cards. They will bear a magnetic stripe and be read by a machine at the retailer, called a point of sale (POS), or by an ATM.

Card issuance

Counties will have to choose whether to mail activated EBT cards or to issue the cards over-the-counter at county designated locations. A county initially choosing over-the-counter delivery will later have the option to change to mail issuance and vice-versa.

Recipients in counties choosing the over-the-counter method will receive via mail a prescheduled appointment to report to a card issuance location to obtain an EBT card and select a PIN. Face-to-face training will be provided to recipients only on request or if the recipient is identified by the county welfare office as having special needs.

Recipients in counties choosing to mail EBT cards will receive pre-assigned PINs two to three days after receiving their EBT cards. Recipients desiring training during the initial period of conversion to EBT may contact a toll-free training support number or they may go to a walk-in training center.

PIN selection

A pin will be used in every transaction with an EBT card. Recipients in counties choosing over-the-counter issuance will select their PINs at the counties’ designated locations. Recipients in counties choosing to mail EBT cards will receive a pre-assigned PIN. Recipients wishing to change their PINs may do so at designated county locations or by calling the customer service phone line.

Multiple cards permitted per household

The recipient head of household may request additional cards for other adult household members. Each card will have its own number and PIN. The head of household may cancel any card on his or her account at any time by calling the customer service line.

Replacement cards

Recipients are eligible for free replacement cards as needed. The State reserves the right to charge a replacement fee in the future.

The EBT contractor must get a replacement card to the recipient within three business days after an EBT card is deactivated when it is reported lost or stolen. Counties may choose to issue replacement cards over-the-counter in the county office or have the contractor mail the card.

Expiration date

EBT cards will not expire.

When will a card stop working?

A card will stop working immediately if the cardholder calls in and requests that it be deactivated. This request can be made 24 hours a day. The card will also stop working after the wrong PIN is entered three consecutive times in any one day. A card that is deactivated for erroneous PINs will be deactivated only until midnight of that day. The card will be useable again the next day. Cards may accidentally become unusable if stored near a magnet.

Lost and Stolen Cards

Recipients should report lost or stolen EBT cards immediately. Unlike in the private banking market, EBT users are liable for any benefits stolen using their cards and PINs until they report the card lost or stolen. Because the recipient does not have any protection from theft until he or she reports to the EBT contractor that the card is missing, it is very important that recipients do not write their PINs on the cards. Once the card has been reported lost or stolen, the contractor will deactivate it and a new card will be issued to the recipient within three business days.


The EBT contractor will mail printed EBT training materials to recipients. In counties choosing to issue cards over-the-counter, this material will also include a prescheduled appointment for recipients to receive their cards and select their PINs.

The EBT contractor must prepare training materials at a sixth-grade reading level in English, Spanish, Cantonese, Vietnamese, Cambodian, Russian, Hmong, Armenian, Lao, and Farsi. Each county must decide which training materials to have on hand based on local language needs.

Recipients will receive wallet-sized reference cards that will provide illustrations and text on EBT topics such as transaction processing, customer service access, and reporting lost or stolen cards.

The contractor will prepare posters to be distributed to county welfare departments three months prior to implementation in each area and a 15-minute training video. In-person training will be offered on an as needed basis.

Account Information

Account statements

Recipients will not receive monthly statements. A recipient can call toll-free to hear the past ten transactions on the phone, or to request that a two-month transaction history be mailed to the head of the household within five business days.

Balance information

To find out how much is left of the month’s food or cash benefits, the recipient can:

  • call the telephone help line at no charge;
  • look at the most recent receipt, which must show the remaining balance; or
  • for cash balances, pay a possible fee to the contractor, plus a possible surcharge for a balance inquiry at an ATM.

Money Orders and Bill Payment Services

Though offering money orders and bill payment services are not required, the State will consider the provisions of such services favorably as it determines who will be awarded the contract.

Customer Service Phone Line

The contractor must provide a toll-free customer service phone line. The phone line must operate 24 hours a day. It will provide:

  • the ability to report a lost or stolen card;
  • balance inquiries (to find out how much is left in the account);
  • immediate “hotcarding” to turn off a card at the recipient’s request.


Customer service with live operators will be available in English and Spanish 24 hours a day. Customer service with live operators will be available between 7 a.m. and 9 p.m. every day in English, Spanish, Cantonese, Vietnamese, Cambodian, and Russian. Live operators will also be available 24 hours a day in ten languages for the purpose of reporting a lost or stolen card.

Twenty-four hour pre-recorded customer assistance will be provided in ten languages: English, Spanish, Cantonese, Vietnamese, Cambodian, Russian, Hmong, Armenian, Lao, and Farsi. The pre-recorded system must permit recipients to inquire about their balances and request information on the last ten transactions in each of these languages.

Training materials will be provided at a sixth-grade reading level in English, Spanish, Cantonese, Vietnamese, Cambodian, Russian, Hmong, Armenian, Lao, and Farsi. Each county must decide which training materials to have on hand based on local language needs.


Sources of Fees

There are two potential sources of fees for recipients using EBT. The first is from the EBT contractor, whose fees are restricted by its contract with the State. The contractor cannot charge a fee for the first four cash withdrawals per month. The second source of fees is the owner of the ATM or POS. The contractor must offer locations where the owner of the ATM or POS will not impose a surcharge for the first four cash withdrawals per month. These free locations are yet to be determined. There might be fees for transactions at non-designated locations and there will be fees for cash withdrawal transactions totaling more than four per month.

Food stamps purchases

There is no fee for any food stamp transaction.

Purchases with cash benefits

Recipients who live in counties where cash benefits are part of the EBT system can make purchases with their benefits at any retailer who chooses to accept EBT, including non-food retailers. No fees can be imposed by the contractor for these purchases. However, retailers can charge a fee if they charge such a fee to their non-EBT customers.

Cash back from a non-food stamp purchase

The EBT contractor cannot charge a fee for cash back after a purchase at a POS. However, the owner of the POS, the retailer, may charge a fee if it also charges fees to other customers. The retailer also can limit the dollar amount of cash back.

Cash Withdrawals

The contractor must offer ATM or POS locations at which no fee will be charged for the first four cash withdrawals per month. Transactions made at non-designated sites may be subject to a surcharge by the owner of the ATM or POS, which is not restricted in amount. The contractor cannot charge a fee for the first four transactions, no matter where they occur. If an ATM is used for a withdrawal, at least $200 per transaction must be available.

Fees the EBT Contractor May Charge

In addition to the fees the owner of the POS or ATM may charge, the EBT contractor is permitted to charge fees for the following:

  • cash withdrawals at a POS or ATM after the first four cash withdrawals per month, and
  • balance inquiries at an ATM.


Food Stamp Access

Retailers are not required to accept EBT though the contractor must ensure that FNS authorized retailers are equipped to participate in EBT. Retailers without EBT equipment may receive it at no cost if they have at least $100 per month in food stamp redemptions. Retailers with lower volumes must pay for their own equipment or may use manual vouchers. The EBT terminal requires a telephone line.

Cash access locations

Counties will be able to choose if they would like to continue to use their current issuance system for cash benefits or if they would like to transition to the EBT system. Since counties have yet to decide if they will switch to EBT, specific cash access locations and numbers of machines are yet to be determined.

The successful bidder will provide plans for county cash access after the contract is signed. Considerations include locations within a zip code or other geographic regions, proximity to where clients live, and capacity for machines to meet the demand for cash.

ATM access

The bid request requires the contractor to enter into an agreement with a major regional network of ATMs. However, it is not required that access to these ATMs be free. In other words, the State would entertain bids that give no access to ATMs without a fee for the recipients of cash public assistance. Under such bids, recipients would have to make cash withdrawals at locations with a POS device, such as grocery stores, but would not be guaranteed access to any surcharge-free ATMs.

Access to the full monthly benefit

Bidders are not required to provide a means to withdraw all of the cash benefit in one transaction. However, the State will consider such service favorably as they determine who will receive the contract award.

Outside County Use

A card issued in any county in California must be usable without an extra fee throughout California.

Moving within California

A recipient who moves from one county to another must obtain a new EBT card in the new county. However, the account from the old county remains open until the benefits in it at the time of moving are used or are expunged due to nonuse.

Use outside of California

Federal legislation was passed in February 2000 requiring that EBT cards be interoperable between states. In other words, California recipients will be able to use their cards in other states.

Recipients leaving areas equipped with EBT

Recipients who are leaving areas equipped with EBT may request to have their electronic food stamp benefits converted to food stamp coupons. This will be handled at the county welfare office. The county can choose whether to keep the food coupons on hand or to have them mailed to the recipient by the EBT contractor. If the coupons are stored at the welfare department, they must be provided within one business day. If the contractor mails the food stamp coupons, they must be received by the recipient within three business days of the request.


What happens when the computer system is down?

Food purchases may be processed manually when the system is down, but retailers are not required to accept manual processing. The contractor must provide a voice authorization system for the approval of manual food stamp transactions. In a manual transaction, the retailer uses a paper sales draft and calls for a telephone authorization. The authorization puts a hold on the funds in the amount of the transaction. The retailer then has up to 15 calendar days to send in the form. If a retailer makes a manual food stamp transaction without prior telephone authorization, then the retailer is at risk if there are not enough funds in the account.

The contractor has an option to invoke a “floor limit” of $40 when the contractor’s system is down and the retailer is unable to get an authorization number. If the floor limit is invoked, the retailer may approve a food stamp transaction without authorization.

Who investigates errors and how long does it take?

The EBT contractor must document calls reporting an error or discrepancy about benefit amounts or transactions and give a control number to the recipient for tracking purposes. For food stamp benefits, federal regulations require that the error be investigated, resolved and re-credited (if appropriate) into the recipient account within 10 business days of the recipient reporting the error to the contractor. Federal regulations allow the recipient 90 calendar days in which to report an error.

The ITP contains some guidelines for resolving errors in cash benefits, but they are incomplete. The State plans to do more work in this area.

Non Traditional Use

Group living arrangements and homeless meal providers

If a group living facility or homeless meal provider is food stamp authorized, the EBT contractor must provide a POS if the monthly food stamp redemption amount is $100 or more. Group living facilities include housing for the elderly, drug and alcohol treatment centers, battered women shelters, foster family settings, and non-profit shelters for homeless people. At group living facilities, the recipient will use the EBT card at the facility’s POS to transfer the required amount of benefits to the facility. If the recipient leaves the facility before the end of the month, the facility must transfer back any funds owed to the recipient. These facilities may provide access to cash benefits using their POS if they choose to do so.

Farmers’ markets

There have been problems in other states with use of EBT at farmers’ markets because EBT technology requires a phone line for authorization to deduct benefits and many farmers’ markets do not have this technology available. If the merchant accepts the EBT card without telephone authorization, the merchant takes the risk that there may be no funds in the account. The bid request states “an immediate need to implement an innovative solution” for farmers’ markets. However, it does not require the contractor to submit its proposal for farmers’ markets until after the contract has been awarded.