Retailers and SNAP Discounts: Understanding USDA’s Equal Treatment Rule and Its Implications

In recent years, especially during times of economic hardship and government shutdowns, many businesses have stepped up to support low-income families who rely on the Supplemental Nutrition Assistance Program (SNAP). While restaurants and nonprofits have offered discounts and donations with impunity, grocery retailers have faced a surprising barrier: a USDA regulation that prohibits them from offering exclusive discounts to SNAP recipients. This article explores the origins, enforcement, and implications of this rule, clarifies who it applies to, and examines the broader ethical and policy debates surrounding it.

What Is the USDA Equal Treatment Rule?

The USDA’s Food and Nutrition Service (FNS), which administers SNAP, enforces a regulation known as the Equal Treatment Rule. This rule mandates that:

“You must offer eligible foods at the same prices and on the same terms and conditions to SNAP-EBT customers as other customers, except that sales tax cannot be charged on SNAP purchases. You cannot treat SNAP-EBT customers differently than any other customers.”

Originally designed to prevent discrimination against SNAP recipients—such as charging them more for the same items—the rule has evolved to prohibit preferential treatment as well. That means retailers cannot offer discounts or services exclusively to SNAP customers, unless they have received a formal waiver from the USDA.

Why the Rule Exists: From Protection to Paradox

The Equal Treatment Rule was intended to ensure fairness and dignity for SNAP recipients. By requiring that they pay the same prices as other customers, the USDA sought to prevent stigmatization and exploitation. However, in recent years, the rule has been interpreted to mean that offering lower prices to SNAP customers is also a violation.

This interpretation has sparked confusion and backlash. During the 2025 government shutdown, several retailers—including DoorDash and Instacart—offered discounts to SNAP users. The USDA responded by sending notices warning that such actions could violate federal law.

Who Must Comply—and Who Doesn’t

The rule applies only to SNAP-authorized retailers, meaning businesses that accept SNAP benefits as payment for eligible food items. These include:

- Grocery stores

- Supermarkets

- Online food retailers (e.g., Instacart, Amazon Fresh)

- Convenience stores authorized by FNS

Restaurants, nonprofits, and other businesses that do not accept SNAP are not bound by this rule. That means:

- A local diner offering free meals to SNAP recipients is not violating any law.

- A food bank giving extra groceries to SNAP families is not subject to USDA enforcement.

- A restaurant offering 10% off to SNAP cardholders is acting legally and ethically.

This distinction is crucial. While retailers are subject to USDA oversight due to their participation in the SNAP program, non-SNAP entities are free to offer support without regulatory interference.

Consequences for Violating the Rule

Retailers who violate the Equal Treatment Rule face serious consequences. According to USDA guidance:

- Administrative action: The USDA may revoke a retailer’s authorization to accept SNAP benefits which can cause considerable financial strain.

- Monetary penalties: Fines may be imposed for violations.

- Criminal prosecution: In cases of fraud or repeated violations, legal action may be pursued.

The USDA’s enforcement arm, the Food and Nutrition Service (FNS), monitors compliance and investigates violations. Retailers found to be offering unauthorized discounts risk losing access to a program that fuels billions in food sales annually.

Waivers and Exceptions

Retailers can apply for a SNAP Equal Treatment Waiver, which allows them to offer certain discounts to SNAP customers. These waivers are rare and typically granted under pilot programs or special circumstances. For example:

- DoorDash and Instacart received blanket waivers during the 2025 shutdown to reduce delivery fees for SNAP users.

- Some online retailers have been allowed to offer promotional pricing as part of USDA-approved pilot programs.

However, brick-and-mortar stores must apply individually, and approval is not guaranteed. The waiver process is opaque, and many small retailers lack the resources to navigate it.

Restaurants and the Ethics of Support

Restaurants and food service businesses have played a vital role in supporting food-insecure families. During the 2025 shutdown:

- Bill Miller Bar-B-Q donated $192,000 to Meals on Wheels.

- H-E-B contributed $6 million to food banks and senior meal programs.

- Cities like San Antonio distributed H-E-B gift cards to thousands of households.

These actions, while not subject to USDA regulation, reflect a broader ethical commitment to community welfare. They also highlight the limitations of the Equal Treatment Rule: in trying to prevent discrimination, the rule may inadvertently discourage generosity.

Policy Debate: Fairness vs Flexibility

Critics argue that the Equal Treatment Rule, as currently enforced, is counterproductive. By prohibiting discounts, the USDA may be:

- Discouraging retailers from supporting vulnerable customers

- Creating confusion and fear among well-meaning businesses

- Undermining community efforts during crises

Supporters of the rule maintain that it protects SNAP recipients from being singled out or treated differently. They argue that waivers offer a path to flexibility, and that the rule ensures consistency across the program.

Retailer Perspective: Caught in the Middle

Independent grocers and national chains alike have expressed frustration with the rule. The National Grocers Association (NGA) warned that SNAP disruptions could lead to:

- Reduced employee hours

- Perishable food losses

- Declining sales for community grocers

Retailers want to help—but fear losing SNAP authorization if they do. This tension has led some to retract planned discounts, even amid widespread food insecurity.

What Retailers Can Do

To stay compliant while supporting SNAP customers, retailers can:

- Offer discounts to all customers, including SNAP users

- Apply for a waiver through the USDA’s Food and Nutrition Service

- Partner with nonprofits to distribute food or gift cards outside the SNAP framework

- Educate staff on SNAP rules and enforcement risks

Retailers must tread carefully—but they are not powerless.

💬 Conclusion: Compassion Within Compliance

The USDA’s Equal Treatment Rule is rooted in fairness, but its enforcement has raised complex questions about compassion, compliance, and community support. While retailers must follow strict guidelines, restaurants, nonprofits, and unaffiliated businesses remain free to offer help—and many have done so with grace and generosity.

In a time of economic uncertainty, the challenge is not just to feed people, but to do so with dignity. The USDA’s rule may protect against discrimination, but it must also evolve to support the spirit of generosity that defines true public service.

Sources:

Fast Company – USDA email warns stores: Discounts for SNAP users could violate federal law

Yahoo News – USDA warns retailers against giving food discounts amid SNAP cuts

Yahoo News – Fact Check: USDA prohibits SNAP discounts during shutdown unless retailers have waivers

Snopes – USDA prohibits SNAP discounts unless retailers have waivers

Abasto – No SNAP-Only Discounts: Retailers Warned by USDA