October 24, 2026 09:00 AM PST
(PenniesToSave.com) – The U.S. Department of Agriculture has proposed a rule that would require every state to replace magnetic-stripe SNAP cards with chip-and-tap cards, the same protection most Americans have carried on their debit and credit cards for more than a decade [1]. The goal is to cut off the skimming rings that copy card data at store registers and drain benefits meant for groceries [4]. According to a ProPublica investigation, about $470 million in Supplemental Nutrition Assistance Program, or SNAP, benefits was stolen from recipients last year alone [1].
The fix carries a real price tag, though a modest one next to the losses. ProPublica puts the estimated combined federal and state cost at $283 million [1], and Supermarket News reports USDA’s own estimate at more than $280 million [2]. Because the federal government has been replacing stolen benefits with public funds, every dollar skimmed at a checkout lane is ultimately a cost shared by taxpayers as well as a hardship for the family that lost it [4].
The proposal is not final. The public has until Dec. 22 to weigh in [2], states would then have two years to comply [1], and the question of who pays for new cards and upgraded store equipment remains unsettled in Congress [1]. For families who depend on the program, for the stores that serve them, and for the taxpayers who fund it, the outcome carries real stakes.
Quick Links
- What Exactly Is Changing With SNAP Cards?
- How Big Has the Skimming Problem Become?
- Who Is Behind the Theft, and How Are Prosecutors Responding?
- Why Does This Matter at the Grocery Checkout?
- What Will Stores and Banks Need to Do?
- Who Pays for the Switch, and Could It Stall?
What Exactly Is Changing With SNAP Cards?
The proposed rule would require all 50 states to move from Electronic Benefits Transfer, or EBT, cards that rely only on a magnetic stripe to cards with digital microchips and tap-to-pay capability [1]. ProPublica identifies the issuing agency as USDA’s Food and Nutrition Administration [1], and the Foundation for Government Accountability (FGA), a nonprofit think tank that supports the rule, links to the proposal on that agency’s website [4]. Magnetic stripes hold data that thieves can copy with hidden devices, a weakness banks moved away from years ago [4].
The rule reaches beyond the cards themselves. It would establish new federal SNAP EBT Operating Standards, which federal and state officials would revise on an ongoing basis to keep up with credit card industry practices and the changing tactics of fraudsters [1]. FGA says the proposal would also give households tools to monitor their accounts, restrict out-of-state transactions, and protect their cards, and would require states to improve monitoring of EBT terminals [4]. Those household features are described in FGA’s statement but not in the other coverage of the rule [4].
The public has 60 days to submit comments [1], with a deadline of Dec. 22 [2]. Once the rule is finalized, states would have two years to make the switch [1][2]. Accounts differ slightly on timing: FGA released its statement describing the proposal on Oct. 22 [4], while ProPublica reports the rule was officially issued on Friday [1]. Either way, the change has been a long time coming. Congress directed USDA to address card theft in 2022 [2], and ProPublica reports the rule had been in development since 2023 before repeated delays [1].
How Big Has the Skimming Problem Become?
The losses are substantial by any measure. ProPublica’s investigation found that about $470 million in SNAP benefits was stolen from recipients last year [1]. The outlet also reports that more than $600 million in SNAP and other public benefits is stolen from existing cards every year, a broader figure that covers programs beyond food assistance [1].
Federal replacement data tells a similar story, though the sources describe it differently. FGA, citing a USDA dashboard, says the federal government replaced more than $360 million in stolen food stamp benefits for more than 750,000 households between October 2022 and December 2024 [4]. Supermarket News reports at least $360 million in replaced benefits but places the period through the second quarter of fiscal year 2025 [2]. The two accounts attach different time frames to the same dollar amount, and neither explains the gap. FGA adds that USDA’s inspector general projected another $233 million could be lost over the following two years, a figure not reported in the other sources [4].
The damage shows up locally too. In New York City, more than 34,000 claims for stolen SNAP benefits totaling about $17.1 million were filed over the past year, according to a release from State Senator John Liu, which attributes the figures only to reports [3].
The method itself is simple. Skimming rings hide devices on store card readers, copy card numbers, build counterfeit cards, and drain balances meant for groceries [4]. Because victims often learn of the theft only after the money is gone, regular account checks are among the best ways to track your expenses and catch unauthorized activity early.
Who Is Behind the Theft, and How Are Prosecutors Responding?
Much of the theft traces to organized operations rather than lone bad actors. Stephanie Johnson, senior vice president and head of government affairs at the National Grocers Association (NGA), attributed EBT card skimming to multinational criminal organizations [2].
Federal enforcement has stepped up in recent days. FGA reports that the Justice Department and USDA announced actions this week against more than 40 defendants in cases involving nearly $42 million in food stamp fraud [4]. In the largest case, two Chicago store owners allegedly ran stolen Ohio EBT cards through their registers, sometimes seconds apart, in a scheme worth nearly $30 million, and prosecutors say some of the money bought cars that were shipped overseas [4]. FGA notes that both stores had been approved to accept food stamps under the Biden administration [4].
In another case, a crew that FGA describes as made up mostly of Romanian nationals in the country illegally allegedly used skimming devices to steal benefits, while its partners allegedly shipped more than 124,000 pounds of baby formula bought with those benefits for resale on the black market [4]. ProPublica reports that Attorney General Todd Blanche and other officials detailed ongoing Oregon cases in which criminal groups allegedly used stolen account numbers and PINs to buy bulk goods such as energy drinks and baby formula, which were resold for more than $3 million [1]. These cases remain allegations, and each defendant is entitled to a presumption of innocence.
This rule takes the war to the checkout line.
Jonathan Ingram, Vice President of Policy and Research, Foundation for Government Accountability [4]
The officials presented the Oregon cases at a Wednesday press conference in Ohio called by Vice President JD Vance, whose roles include serving as the administration’s fraud czar, according to ProPublica [1].
Why Does This Matter at the Grocery Checkout?
For families who rely on SNAP, theft usually surfaces at the worst possible moment. Vance described the experience of standing in a checkout line with children, presenting the card, and being turned away because a fraudster had already drained the account, adding that hundreds of thousands of families have been through it [1]. The NGA made the same point, saying too many families discover the loss while trying to buy food [2].
The case for acting is strong on value alone. The estimated $283 million cost of the transition compares with more than $600 million in SNAP and other benefits stolen from existing cards each year [1]. California offers a preview: ProPublica reports that theft of SNAP and other public benefits there fell 83% within two years of the state adopting chip cards [1]. The NGA says states that adopted chip cards have seen a significant drop in skimming fraud [2].
Justin King, policy director at Propel, a company that helps SNAP recipients access their benefit information, argued that updating one state at a time only pushes criminals elsewhere, while a national standard leaves them nowhere to go [1].
Theft rings don’t care about state lines.
Justin King, Policy Director, Propel [1]
The stakes may be rising for victims. New York City Council Member Sandra Ung said the federal program that helped reimburse stolen benefits has lapsed, making recovery harder, a claim that does not appear in the other sources [3]. A sudden loss of benefits is exactly the kind of shock an emergency cushion is meant to absorb, and learning how to automate your savings can help build one in small, steady amounts.
What Will Stores and Banks Need to Do?
New cards only work if checkout equipment can read them. Supermarket News reports that retailers will need to update their systems to accept the new cards under the federal proposal [2].
New York offers an early look at how that transition plays out, though its rollout is a separate state effort that predates the federal rule. The push there traces to a February legislative budget hearing, after which funding for the switch was included in New York’s fiscal year 2027 budget [3]. The state’s Office of Temporary and Disability Assistance (OTDA) has asked all authorized SNAP retailers, including farmers’ markets and restaurant meal providers, along with financial institutions, to update point-of-sale equipment and ATMs by Dec. 1, 2026 [3]. New York’s chip cards are expected to be issued in early 2027 and will not work at terminals that have not been updated [3].
OTDA advises retailers to contact their point-of-sale provider immediately and to confirm that their systems allow the new cards to fall back to magnetic stripe transactions [3]. OTDA Commissioner Barbara Guinn said New York is one of the first states transitioning to chip-based EBT cards [3], while ProPublica reports that a handful of states, including California, have already made the switch on their own [1].
The grocery industry is on board. The NGA applauded USDA’s move and described it as a strong first step toward better security for SNAP transactions [2]. New York’s Dec. 1 deadline applies only to that state; under the federal proposal, states would have two years after the rule is finalized [1].
Who Pays for the Switch, and Could It Stall?
Funding is the biggest open question. ProPublica reports that many states are budget-strapped, in large part because President Donald Trump’s One Big Beautiful Bill Act reduced funding for states’ SNAP administration, money that could have helped upgrade EBT systems and mail new cards [1]. Current and former agency officials and state administrators told ProPublica they worry the rule mandates expensive changes without federal money to pay for them [1].
Congress has not settled the issue. The Senate version of this year’s Farm Bill includes funding for the transition, while the House version does not [1]. Two separate bills also address the problem. Rep. Grace Meng’s Ending Stolen SNAP Benefits Act would help states cover the cost of switching cards [3], and the NGA supports the bipartisan Enhanced Cybersecurity for SNAP Act, which it says includes further security measures [2].
The rule’s history shows how easily progress can slip. ProPublica attributes past delays to understaffing at USDA, cuts by the Department of Government Efficiency, and a backlog of other regulations prioritized by the White House budget office [1].
Accounts also differ on who deserves credit. ProPublica notes the announcement came a week after its own investigation, which two USDA officials told the outlet was shared around the department [1]. The NGA credited USDA and the Task Force to Eliminate Fraud [2], while FGA framed the rule as part of the administration’s broader push against fraud [4]. ProPublica also reports a shift in tone from Vance, whom it says previously portrayed recipients as perpetrators of fraud, but who this week emphasized that low-income families are often the victims and called SNAP one of the country’s most important social service programs [1].
Final Thoughts
At its core, the proposal is a commonsense step toward program integrity. Chip technology has protected ordinary bank cards for years, and extending it to SNAP would close an opening that criminal rings have exploited at the expense of both struggling families and the taxpayers who fund the program [1][4]. Grocers, benefit advocates, and government accountability groups have all welcomed the move [1][2][4].
Real questions remain. Funding for new cards and store equipment has not been resolved, and states’ ability to meet a two-year deadline will depend on budgets that are already under pressure [1]. Retailers will need to upgrade their equipment, and in New York the clock is already running [3].
The next milestones are the Dec. 22 comment deadline [2] and the Farm Bill funding debate [1]. Households that use SNAP should watch for notices from their state about new cards, and every family can benefit from knowing how to create a budget that leaves room for unexpected losses. Protecting public dollars and protecting the families who depend on them turn out to be the same goal.
Works Cited
[1] Hager, Eli. “After Millions in Stolen SNAP Benefits, Trump Administration Moves to Fight Theft.” ProPublica, 23 Oct. 2026, www.propublica.org/article/snap-theft-chip-cards-trump-rule.
[2] Wilson, Bill. “USDA Finally Takes a Stand on SNAP Card Skimming.” Supermarket News, 23 Oct. 2026, www.supermarketnews.com/food-accessibility/usda-finally-takes-a-stand-on-snap-card-skimming.
[3] Liu, John C. “Liu, Rozic Announce Major Fraud Prevention Measure to Protect SNAP Recipients.” The New York State Senate, 22 Oct. 2026, www.nysenate.gov/newsroom/press-releases/2026/john-c-liu/liu-rozic-announce-major-fraud-prevention-measure-protect.
[4] “FGA Applauds USDA Proposal to Protect Food Stamps from Skimmers and Thieves.” Foundation for Government Accountability, 22 Oct. 2026, thefga.org/press/fga-applauds-usda-proposal-to-protect-food-stamps-from-skimmers-and-thieves/.