Appendix C WIC-Vendor Management Handbook

Appendix C WIC-Vendor-Management-Handbook-Public-Version-9.17-508.pdf

Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Program Regulations - Reporting and Recordkeeping Burden

Appendix C WIC-Vendor Management Handbook

OMB: 0584-0043

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2024-04-25 - Revision of a currently approved collection

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Appendix C
WIC Vendor Management and Food Delivery Handbook
Information Collection Burden for the Special Supplemental
Nutrition Program for Women, Infants and Children (OMB
#0584-0043)

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The WIC Vendor Management and Food Delivery Handbook was developed by USDA’s Food and
Nutrition Service (FNS) to serve as a resource manual for State and federal staff who operate and
oversee the Special Supplemental Nutrition Program for Women, Infants and Children (WIC).
The handbook is a comprehensive summary of regulations, policy, and guidance related to WIC Vendor
Management and Food Delivery. It does not replace or supersede federal regulations or policies that
govern the WIC Program.
In accordance with 5 U.S.C. § 552(b)(7)(E), select chapters are not available for public sharing.

Table of Contents
1

INTRODUCTION.............................................................................................................................. 1

FOOD DELIVERY METHODS ....................................................................................................... 2

2.1
2.1.1

Management............................................................................................................................................. 2
Delegation of Vendor Management Related Activities ....................................................................................3

2.2
2.2.1

Issuance of Supplemental Foods, Food Instruments and Cash Value Vouchers ......................................... 3
Additional Requirements for FIs and CVVs .......................................................................................................4
2.2.1.1 FI and CVV Security ...................................................................................................................................5
2.2.1.2 FI and CVV Disposition ..............................................................................................................................5

2.3

Home Delivery .......................................................................................................................................... 5

2.4

Direct Distribution ..................................................................................................................................... 6

2.5
2.5.1

Retail ......................................................................................................................................................... 6
Issuance of FIs and CVVs in Retail.....................................................................................................................6
2.5.1.1 Additional Requirements for FIs and CVVs in Retail .................................................................................7
2.5.2 Redemption Procedures in Retail Food Delivery Systems ................................................................................7
2.5.3 Vendor Discounts and Incentives .....................................................................................................................9
2.6
2.6.1
2.6.2

Electronic Benefit Transfer ........................................................................................................................ 9
EBT Minimum Lane Coverage ...........................................................................................................................9
EBT Costs and Fees .........................................................................................................................................10
2.6.2.1 Third-Party Processing Costs and Fees ...................................................................................................10
2.6.2.2 Interchange Fees .....................................................................................................................................10
2.6.2.3 Ongoing Maintenance and Operational Costs ........................................................................................10
2.6.3 Electronic Benefit Requirements ....................................................................................................................11
2.6.4 EBT Management and Reporting ...................................................................................................................11
2.6.5 Other EBT Requirements ................................................................................................................................12
2.6.5.1 EBT Technical Standards and Requirements...........................................................................................12
2.6.5.2 EBT Customer Service Standards ............................................................................................................12
2.6.5.3 National Universal Product Code Database ............................................................................................12
2.6.5.4 Exemptions from the EBT Mandate ........................................................................................................13

VENDOR AUTHORIZATION....................................................................................................... 14

3.1

General Vendor Application/Authorization Requirements ...................................................................... 14

3.2

Limiting Criteria ....................................................................................................................................... 15

3.3
3.3.1

Vendor Selection Criteria ........................................................................................................................ 16
Federally Mandated Selection Criteria ...........................................................................................................16
3.3.1.1 Minimum Variety and Quantity of Supplemental Foods ........................................................................16
3.3.1.2 Business Integrity ....................................................................................................................................18
3.3.1.3 Current SNAP Disqualification or Civil Money Penalty for Hardship ......................................................19

3.3.1.4 Competitive Price ....................................................................................................................................19
3.3.1.5 Incentive Items........................................................................................................................................20
3.3.1.6 EBT Capability .........................................................................................................................................20
3.3.2 State Agency Imposed Selection Criteria........................................................................................................20
3.3.3 Participant Access Considerations ..................................................................................................................20

VENDOR AGREEMENTS.............................................................................................................. 22

4.1

Vendor Agreement Provisions ................................................................................................................. 23

4.2

Additional Agreement Requirements ...................................................................................................... 27

4.3

Terminating Vendor Agreements ............................................................................................................ 27

5
5.1

VENDOR TRAINING ..................................................................................................................... 29
Interactive Training ................................................................................................................................. 29

VENDOR COST CONTAINMENT {Redacted}........................................................................ 31

HIGH RISK VENDOR IDENTIFICATION SYSTEM {Redacted}......................................... 32

MONITORING & INVESTIGATIONS {Redacted}.................................................................. 34

SANCTIONS .................................................................................................................................... 35

9.1
9.1.1
9.1.2
9.1.3
9.1.4

Vendor Sanctions .................................................................................................................................... 35
Participant Access Determination ..................................................................................................................35
Pattern of Violations .......................................................................................................................................35
Notification of Violations ................................................................................................................................36
Mandatory Federal Vendor Sanctions ............................................................................................................36
9.1.4.1 Permanent disqualification .....................................................................................................................36
9.1.4.2 Six year disqualification ..........................................................................................................................37
9.1.4.3 Three year disqualification......................................................................................................................37
9.1.4.4 One year disqualification ........................................................................................................................37
9.1.4.5 Second mandatory sanction ...................................................................................................................37
9.1.4.6 Third or subsequent mandatory sanction ...............................................................................................38
9.1.4.7 Disqualification based on a SNAP disqualification or CMP for hardship.................................................38
9.1.5 State Agency Vendor Sanctions ......................................................................................................................38
9.1.6 Civil Money Penalties .....................................................................................................................................38
9.1.6.1 Calculating a CMP ...................................................................................................................................39
9.1.7 Violation Location ...........................................................................................................................................39
9.2

Participant Sanctions............................................................................................................................... 40

VENDOR CLAIMS ...................................................................................................................... 41

ADMINISTRATIVE REVIEW .................................................................................................. 42

11.1

Adverse Actions Subject to Full Administrative Review ........................................................................... 42

11.2

Adverse Actions Subject to Abbreviated Administrative Review ............................................................. 42

11.3

Actions Not Subject to Review ................................................................................................................ 43

11.4

Farmers and Farmers’ Markets................................................................................................................ 44

11.5
Administrative Review Procedures.......................................................................................................... 44
11.5.1
Notification of Adverse Action ...................................................................................................................44
11.5.1.1 Notification to Vendors.........................................................................................................................44
11.5.1.2 Notification to FNS ................................................................................................................................45
11.5.2
Full Administrative Review Procedures......................................................................................................45
11.5.3
Abbreviated Administrative Review Procedures .......................................................................................46

FARMERS AND FARMERS’ MARKETS ................................................................................ 47

12.1

Authorization of Farmers and Farmers’ Markets ..................................................................................... 47

12.2
Farmer and Farmers’ Market Agreements ............................................................................................... 47
12.2.1
Farmer and Farmers’ Market Agreement Provisions .................................................................................48
12.3

Monitoring Farmers and Farmers’ Markets ............................................................................................. 48

MISCELLANEOUS ...................................................................................................................... 50

13.1
Confidentiality of Vendor Information .................................................................................................... 50
13.1.1
Agreements ................................................................................................................................................51
13.1.2
Conflicts with State Law .............................................................................................................................52
13.1.3
Subpoenas and Search Warrants ...............................................................................................................52
13.2
Recordkeeping Requirements ................................................................................................................. 53
13.2.1
State Agency Records .................................................................................................................................53
13.2.2
Vendor Records ..........................................................................................................................................54
13.3

The Integrity Profile (TIP) ........................................................................................................................ 54

13.4

Conflict of Interest .................................................................................................................................. 54

13.5

List of Infant Formula Providers .............................................................................................................. 54

13.6

Complaints .............................................................................................................................................. 55

13.7

Reciprocal SNAP Disqualification for WIC Program Disqualifications....................................................... 55

13.8

Military Commissaries ............................................................................................................................. 56

13.9

Suspension and Debarment Procedures .................................................................................................. 56

FNS MONITORING AND REVIEW ......................................................................................... 57

14.1

Management Evaluations ........................................................................................................................ 57

14.2

Corrective Action Plans ........................................................................................................................... 57

14.3
Claims against State Agencies ................................................................................................................. 58
14.3.1
Fraud/Misuse .............................................................................................................................................58
14.3.2
Loss/Theft/Embezzlement .........................................................................................................................58
14.3.3
Improper Disposition .................................................................................................................................58
14.3.4
Failure to Achieve Above-50-Percent Vendor Cost Neutrality ...................................................................59
14.3.5
Interest .......................................................................................................................................................59
14.3.6
Penalties .....................................................................................................................................................59

STATE PLAN REQUIREMENTS ............................................................................................. 60

APPENDIX A GLOSSARY ........................................................................................................................ I
APPENDIX B WIC ACRONYMS ......................................................................................................... VII
APPENDIX C SELECTED REGULATION CITATIONS ................................................................. VIII
16

APPENDIX D SELECTED WIC POLICY MEMORANDA ..................................................... XI

D.1
WIC Policy Memorandum 2014-3: Vendor Management: Incentive Items, Vendor Discounts and
Coupons............................................................................................................................................................... xii
D.2

MOU: Military Commissaries as WIC Program Vendors. .......................................................................... xx

D.3
WIC Policy Memorandum 2014-5: Reporting Permanently Disqualified WIC-Only/Authorized Store
Owners to the System for Award Management (SAM). ......................................................................................xxii

APPENDIX E WIC VENDOR MANAGEMENT TIP SHEETS {Redacted}............................. XXIV

Introduction

The WIC Vendor Management and Food Delivery Handbook is intended to serve as a resource manual
for State and federal WIC staff, but does not replace or supersede federal regulations or policies that
govern the WIC Program. To identify the regulations and policies that support any section of this
handbook, please see Appendix C - Selected Regulatory Citations.
For additional requirements related to WIC electronic benefit transfer (EBT), see WIC EBT regulations
and guidance, which are located on FNS’ public website.
This handbook will be updated periodically; the issuance date is included on the cover and in the footer.

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Food Delivery Methods

A WIC food delivery method is a system used by State and local agencies to provide supplemental foods
to participants. The State agency may operate up to four types of food delivery systems/methods:
home delivery, direct distribution, retail, or electronic benefit transfer (EBT).
Requirements for all four types of food delivery systems/methods are included in sections 2.1 and 2.2,
below. See Handbook sections 2.3 (Home Delivery), 2.4 (Direct Distribution), and 2.5 (Retail) for
information specific to each method.

2.1

Management

The State agency is responsible for managing and operating its food delivery systems/methods. This
includes providing guidance to local agencies on how to operationalize its methods at the local level.
The State agency must:
•

•

•
•

•

Design all food delivery systems/methods to be used within its jurisdiction. Each food delivery
system/method must be uniform and:
o Use consistent procedures in all areas where the system/method is used within the
State agency’s jurisdiction.
o Ensure adequate participant access to foods.
o If food instruments (FIs) are used, they must be uniform. FIs are vouchers, checks,
electronic benefit transfer (EBT) cards, coupons or other documents that are used by a
participant to obtain supplemental foods.
Ensure all contracts/agreements entered into by the State or local agency for the management
and operation of food delivery systems/methods conform to federal contracting requirements
located at 2 CFR part 200, Appendix II.
Ensure that food delivery systems/methods are compatible with the delivery of services to
participants, including health and nutrition education and breastfeeding counseling.
Ensure there is no conflict of interest (as defined by applicable State laws, regulations, and
policies) between the State agency and any vendor, farmer, farmers’ market, or direct
distribution or home delivery contractor. This also applies to any local agency and any vendor,
farmer, farmers’ market, or direct distribution or home delivery contractor under the local
agency’s jurisdiction.
Have procedures to document the handling of complaints by participants, parents/caretakers of
infant or child participants, proxies, vendors, farmers, farmers’ markets, and direct distribution
or home delivery contractors. Complaints of civil rights discrimination must be handled in
accordance with WIC regulations at 7 CFR 246.8(b), FNS Instruction 113-1, and applicable FNS
policy memoranda.
Employ at least one staff member designated for food delivery system management. This staff
may perform additional duties. FNS recommends that the staff member:
o Be knowledgeable about the State agency’s entire food delivery system/method.
o Have a thorough understanding of regulations and policies related to vendor
management and food delivery.
o Be accountable for resolving issues and problems involving food delivery.
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The State agency is prohibited from charging vendors for any vendor management cost for which it
receives federal funding. This includes, but is not limited to: processing applications for authorization,
contracting activities, processing FIs, providing training, conducting reviews, and conducting
administrative appeals.
FNS oversight: FNS may require revisions to a State agency’s proposed or current food delivery
system(s)/method(s). If revisions are required, FNS will give written notice of the cause and will allow
reasonable time for changes to be made.

2.1.1 Delegation of Vendor Management Related Activities
The State agency may delegate certain vendor management activities to its local agencies, but must
provide supervision and instruction to ensure the uniformity and quality of local agency activities.
The State agency may delegate the following responsibilities to local agencies if the State agency
indicates its intention to do so in its State Plan (see Handbook Chapter 15 for more information):
•
•
•

Authority to sign vendor agreements.
Vendor training.
o This may also be delegated to contractors and vendor representatives.
Vendor monitoring and compliance.
o This may also be delegated to another entity, including another WIC State agency.
o The entity conducting monitoring or investigations acts as a contractor and must:
 Follow the rules and procedures of the contracting State agency.
 Use the contracting State agency’s food instruments for any buys that are
conducted during monitoring or investigations.

Although it may be delegated to other entities, FNS recommends that the State or its local agencies
conduct routine monitoring.
If the State agency delegates any vendor management activities, including the signing of vendor
agreements, vendor training, or vendor monitoring to a local agency, it must evaluate the local agency’s
effectiveness in carrying out these responsibilities.
Additionally, State agencies may want to solicit feedback from local agencies to inform their vendor
management decisions. Local agencies may provide valuable input about:
•
•
•
•

2.2

Areas of participant concentration.
Participant access issues.
Reputations of local vendors.
Service quality provided to WIC participants at local vendors.

Issuance of Supplemental Foods, Food Instruments and Cash Value
Vouchers

Participants must receive authorized supplemental foods free of charge through the State agency’s food
delivery system(s)/method(s). Most State agencies use a food delivery system/method by which
participants transact food instruments (FIs) or cash value vouchers (CVVs) for authorized supplemental
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foods. FIs are vouchers, checks, EBT cards, coupons, or other documents used to obtain supplemental
foods. CVVs are fixed-dollar amount checks, vouchers, or other documents used to obtain authorized
fruits and vegetables. Cash Value Benefits (CVBs) is the term used to describe fruit and vegetable
benefits that are included on an EBT card.
The State agency must:
•

•

•
•

•

Ensure that participants, parents/caretakers of infant and child participants, and proxies receive
instructions on the proper use of FIs and CVVs, or on the procedures for obtaining authorized
supplemental foods when FIs or CVVs are not used.
Establish uniform procedures that allow parents/caretakers of infant or child participants and
proxies to obtain and transact FIs and CVVs or to obtain authorized supplemental foods on
behalf of a participant.
o In determining whether a particular participant or parent/caretaker should be allowed
to designate a proxy or proxies, the State agency must require the local agency or clinic
to consider whether adequate measures can be implemented to provide nutrition
education and health care referrals to that participant or, in the case of an infant or
child participant, to the participant’s parent/caretaker.
Ensure that the participants, parents/caretakers of infant or child participants, and proxies sign
for receipt of FIs, CVVs, or authorized supplemental foods.
Ensure that participants, parents/caretakers of infant and child participants, and proxies are
informed that they have the right to complain about improper vendor, farmer, farmers’ market,
and home delivery contractor practices.
Ensure that no more than a 3 month supply of FIs and CVVs or a 1 month supply of authorized
supplemental foods is issued at any one time to any participant, parent/caretaker of an infant or
child participant, or proxy.
Require participants, parents/caretakers of infant or child participants, and proxies to pick up
benefits in person when scheduled for a certification or nutrition education appointment.

The State agency may:
•

Provide for issuance through an alternative means such as mailing paper FIs and CVVs unless
FNS determines that such actions would jeopardize the integrity of Program services or
accountability.
o If the State agency opts to mail FIs and CVVs it must:
 Provide justification in its State Plan for mailing FIs and CVVs to areas where
Supplemental Nutrition Assistance Program (SNAP) benefits are not mailed.
 Establish and implement a system that ensures that FIs and CVVs are returned
to the State or local agency if a participant no longer resides or receives mail at
the address where the FIs and CVVs were sent.

2.2.1 Additional Requirements for FIs and CVVs
In addition to following the issuance procedures listed in Handbook section 2.2, all State agencies that
issue FIs or CVVs must meet the following requirements.

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2.2.1.1 FI and CVV Security
The State agency must develop standards to ensure the security of FIs and CVVs from the time the FIs or
CVVs are created to the time they are issued.
For pre-printed FIs and CVVs, the standards must include:
•
•
•
•

Maintenance of perpetual inventory records of FIs and CVVs.
Monthly physical inventory of FIs and CVVs on hand.
Reconciliation of perpetual and physical inventories of FIs and CVVs.
Locking up all FIs and CVVs, except for supplies needed for immediate use.

For EBT and print-on-demand FIs and CVVs, the standards must provide for accountability and security
in the manufacturing and issuance of FIs and CVVs/CVBs.

2.2.1.2 FI and CVV Disposition
The State agency must account for the disposition of all FIs and CVVs through a one-to-one
reconciliation process.
FIs and CVVs must be classified as:
•
•

Issued or voided.
Redeemed or unredeemed.

Additionally, redeemed FIs and CVVs must be identified as:
•
•
•
•
•
•

Validly issued.
Lost.
Stolen.
Expired.
Duplicate.
Not matching valid enrollment or issuance records.

In an EBT system, the above requirement is met through the linking of the Primary Account Number
(PAN) associated with the electronic transaction to valid issuance records, and can be conducted by
matching the electronic benefit record for the household to redemptions by EBT card number (PAN) at
the aggregate household benefit level.
In both paper and EBT, this process must be:
•
•

Performed within 120 days of the first valid date for participant use of the FI or EBT benefits.
Conducted in accordance with the financial management requirements of WIC regulations at 7
CFR 246.13.

The State agency may be subject to claims for redeemed FIs or CVVs that do not meet these conditions
(see Handbook section 15.3 for more information).

2.3

Home Delivery

Home delivery is the WIC food delivery system in which supplemental foods are delivered directly to the
participant’s home.
A State agency that operates a home delivery system must:
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•

•
•

•

2.4

Procure supplemental foods in accordance with WIC regulations (see Handbook section 2.2 for
more information), which relate to actions such as the purchase of food in bulk lots and the use
of available discounts.
Issue supplemental foods to participants within 10 days of notifying them of their certification.
Ensure that foods are delivered by:
o Paying home delivery contractors only after the delivery of supplemental foods to
participants.
o Routinely (at least once per month) verifying the correct delivery of supplemental foods
to participants.
Keep records of the delivery of supplemental foods, bills sent, and payments received for at
least 3 years. These records must be made available to federal, State, and local authorities, on
request.

Direct Distribution

Direct distribution is the WIC food delivery system in which participants, parents/caretakers, or proxies
pick up authorized supplemental foods from storage facilities operated by the State agency or its local
agencies.
A State agency that operates a direct distribution system must:
•
•
•

•
•
•

2.5

Have adequate storage and insurance coverage against theft, spoilage, infestation, fire, and
other causes to minimize loss.
Have adequate control of inventory (i.e., manage when food is stocked and issued).
Procure supplemental foods in accordance with WIC regulations at (see Handbook section 2.2
for more information), which relate to actions such as the purchase of food in bulk lots and the
use of available discounts.
Ensure that supplemental foods are accessible to participants and potential participants who
live far from storage facilities or distribution centers.
Ensure that supplemental foods are issued to participants within 10 days of notifying them of
their certification.
Ensure that any contractor operating any part of the direct distribution system meets applicable
requirements listed above.

Retail

A retail food delivery system is one in which participants, parents/caretakers of infant and child
participants, and proxies receive supplemental foods from authorized retail vendors using FIs and CVVs.
A State agency that operates a retail food delivery system must authorize, train, manage, oversee, and
monitor its authorized vendors. Participants must be allowed to obtain supplemental foods from any
vendor authorized by the State agency.

2.5.1 Issuance of FIs and CVVs in Retail
In addition to the FI and CVV requirements listed in Handbook section 2.2, the State agency must ensure
that all local agencies that issue retail benefits meet the following requirements.
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Local agencies:
•

•

Must issue FIs and CVVs to the participant at the same time the participant is notified of
certification. These FIs and CVVs must:
o Provide benefits for the current month or the remaining portion of the month.
o Be redeemable immediately upon receipt by the participant.
May mail initial FIs and CVVs with notification of certification to participants that meet the
criteria for the receipt of FIs and CVVs through the mail (see Handbook section 2.2 for more
information).

2.5.1.1 Additional Requirements for FIs and CVVs in Retail
Printed paper FIs and CVVs must plainly show:
•
•
•

•

•
•
•

•

List of supplemental foods the participant may obtain.
First date of use.
Last date of use (or number of days FI or CVV is valid).
o The last date of use must be at least 30 days from the first date, or in the month of
February, 28 or 29 days.
o Exception: On the participant’s first month of issuance, the last date of use may be
extended to the end of the month or valid cycle.
Redemption period (dates during which the vendor must submit FIs or CVVs for redemption).
o The last date of the redemption period must be no more than 60 days from the first
date of use.
o The last date of the redemption period may be fewer than 60 days from the first date of
use if the State agency ensures there is sufficient time for vendors to submit the FI or
CVV without undue burden.
Serial number (a unique, sequential number).
A space for the purchase price to be entered by the vendor (or by the participant, at State
agency option).
FNS does not recommend either printing a maximum price on an FI, or publicly posting the
maximum price.
o If a maximum price is printed on the FI, the space for the purchase price must be clearly
distinguishable from the maximum price.
A space for participants, parents/caretakers of infant or child participants, or proxies to sign.

See Handbook section 2.6 for information on EBT requirements.

2.5.2 Redemption Procedures in Retail Food Delivery Systems
The State agency must clearly document and train vendors on its redemption procedures. The vendor
must submit FIs and CVVs for redemption in accordance with the State agency’s redemption procedures.
The State agency must ensure that vendors meet the following requirements:
•
•

Accept FIs and CVVs only from participants, parents/caretakers of infant and child participants,
or proxies.
Accept an FI or CVV only within the specified time period.
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•

•
•

Provide only the authorized supplemental foods listed on the FI or CVV.
o The vendor may not provide unauthorized food items, non-food items, cash, or credit
(including rain checks) in exchange for FIs or CVVs.
o The vendor may not provide refunds or permit exchanges for authorized supplemental
foods obtained with FI or cash value vouchers.
Exception: The vendor may exchange an identical (exact size and brand) authorized
supplemental food item if the original food item was defective, spoiled, or has exceeded
its “sell by,” “best if used by,” or other date limiting the sale or use of the food item.
o The vendor may only provide the authorized infant formula listed on the FI, obtained
from sources included on the State agency’s list of infant formula providers (see
Handbook section 14.5 for more information).
Enter the purchase price for FIs and CVVs in accordance with the State agency’s redemption
procedures.
o The purchase price must include only the authorized supplemental food items actually
provided and must be entered on the FI or CVV before it is signed.
o The State agency must determine whether the vendor or the participant enters the
purchase price.
Require that the participant, parent/caretaker of an infant or child participant, or proxy signs the
FI or CVV in front of the cashier after the purchase price has been entered.
o In EBT, a Personal Identification Number (PIN) is used instead of a signature.
Do not collect sales tax on supplemental foods obtained with FIs or CVVs.
Allow the participant, parent/caretaker of an infant or child participant, or proxy to pay the
difference when a CVV fruit and vegetable purchase exceeds the value on the CVV.
o The difference/overages are considered non-WIC items and should be taxed consistent
with the form of payment used to pay for them (e.g., if SNAP, do not apply tax; if cash,
apply tax).

Additionally, the State agency must:
•

Not pay a vendor more than the maximum allowable reimbursement levels (MARLs) applicable
to the vendor and FI or food item (in EBT).

•

Implement procedures to ensure that the vendor that submitted each FI and CVV can be
identified.
o Each store location operated by a single business entity must be separately identifiable.
o The State agency may require all authorized vendors to stamp or enter their names or a
vendor identification number on all FIs and CVVs prior to submitting them for
redemption.

The State agency may:
•

Pay vendors for FIs and CVVs submitted after the valid redemption period if the vendor provides
justification and documentation.
o

If the total value of FIs and CVVs submitted at one time exceeds $500.00, the State
agency must obtain FNS approval before payment.

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2.5.3 Vendor Discounts and Incentives
See WIC Policy Memorandum 2014-3: Vendor Management: Incentive Items, Vendor Discounts and
Coupons.

2.6

Electronic Benefit Transfer

Each State agency must implement Electronic Benefit Transfer (EBT) statewide by October 1, 2020,
unless granted an exemption by FNS (see Handbook section 2.6.5 for more information). The State
agency is responsible for EBT coordination and management.
Note: FNS has the authority to modify regulatory provisions if, after an assessment of a specific
situation, it determines that an EBT system provides adequate safeguards that serve the purpose of the
regulatory provisions being modified.

2.6.1 EBT Minimum Lane Coverage
WIC vendors are required to have point of sale (POS) terminals that support WIC EBT. This section
outlines the requirements for minimum lane coverage (i.e., the minimum number of POS terminals that
a vendor must have, based on size and type). Statewide EBT States must have implemented minimum
lane coverage requirements by March 1, 2017. State agencies transitioning to EBT after that date must
meet all requirements at the time of statewide implementation.
All vendors must have at least one POS terminal, and may be required to have up to four, depending on
the store type and volume of monthly WIC redemptions (considered over the prior 12 months). POS
terminals may be single-function (WIC-only) or multi-function (WIC and any other tender types).
Vendors must meet the minimum lane coverage requirements, which are as follows:
•

•

•
•

Superstores and supermarkets (which are defined as having at least $2 million annually in food
sales), based on monthly WIC business:
o $0 to $11,000: 1 terminal
o $11,001 to $22,000: 2 terminals
o $22,001 to $33,000: 3 terminals
o $33,001 and more: 4 terminals
All other vendors, based on monthly WIC business:
o $0 to $8,000: 1 terminal
o $8,001 to $16,000: 2 terminals
o $16,001 to $24,000: 3 terminals
o $24,001 and above: 4 terminals
Farmers and farmers’ markets:
o The State agency must determine the number of appropriate POS terminals.
Newly authorized WIC vendors the State agency considers necessary for participant access:
o One POS terminal, unless the State agency determines other factors in this location
warrant additional terminals.

Any authorized vendor that has been equipped with a POS terminal by the State agency may submit
evidence that additional terminals are necessary after the initial POS terminals are installed. The State
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agency may provide authorized vendors with additional (up to four) POS terminals above the minimum
number required:
•
•

To permit WIC participants to obtain a shopping list or benefit balance.
As long as the number of terminals provided does not exceed the number of lanes in the vendor
location.

Notes:
1. The State agency may use an alternative minimum lane coverage formula with FNS approval.
2. Excess terminals may be removed, but reductions must be consistent with the minimum
requirements.

2.6.2 EBT Costs and Fees
A State agency must not impose the costs of single-function equipment required for WIC EBT
transactions on any authorized vendor, farmer, or farmers’ market, except as otherwise provided in this
section.
The State agency may develop cost-sharing criteria for multifunction equipment, in accordance with
federal cost-sharing principles:
•

•
•

Cost-sharing agreements must be developed between a State agency and its vendors, farmers,
or farmer’s markets. Agreements depend on the type, scope, and capabilities of shared
equipment.
Costs shared by a WIC State agency must be proportional to the usage for the WIC Program.
The State agency must provide its allocation and cost-sharing methodology to FNS as part of the
Advance Planning Document (APD) for review and approval before incurring costs.

2.6.2.1 Third-Party Processing Costs and Fees
Vendors must not charge the State agency for any third-party commercial processing or transaction
costs or fees incurred by the vendor from EBT multi-function equipment.
The State agency must:
•

•

Not pay or reimburse vendors, farmers, or farmers’ markets for third-party processing costs or
fees for vendors, farmers, or farmers’ markets that elect to accept EBT using multi-function
equipment.
Not charge any fees to authorized vendors for use of single-function equipment.

2.6.2.2 Interchange Fees
The State agency must not pay or reimburse the vendor for interchange fees related to WIC EBT
transactions.

2.6.2.3 Ongoing Maintenance and Operational Costs
The State agency will not pay for ongoing maintenance, processing fees or operational costs for multifunction vendor systems and equipment used to support WIC EBT after the State agency has
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implemented WIC EBT statewide. This requirement must be implemented in statewide EBT States by
March 1, 2018. State agencies transitioning to EBT after that date must comply with this requirement at
the time of statewide implementation.
Exceptions:
The State agency must pay ongoing maintenance and operational costs:
•
•

If the vendor is needed for participant access.
If the vendor was provided with single-function equipment by the State agency prior to
statewide rollout.

2.6.3 Electronic Benefit Requirements
Each electronic benefit must contain the following information:
•
•
•

•

Authorized supplemental foods: The supplemental foods authorized by food category,
subcategory and benefit quantity, to include the CVB.
First date of use: The first date of use on which the electronic benefit may be used to obtain
authorized supplemental foods.
Last date of use: The last date on which the electronic benefit may be used to obtain authorized
supplemental foods. This date must be a minimum of 30 days, or in the month of February 28 or
29 days, from the first date on which it may be used to obtain authorized supplemental foods.
o Exception: For the participant’s first month of issuance when it may be the end of the
month or cycle for which the electronic benefit is valid.
Benefit issuance identifier: A unique and sequential number. This number enables the
identification of each benefit change (addition, subtraction or update) made to the participant
record.

The State agency must ensure each EBT purchase submitted for electronic payment is matched to an
authorized vendor, farmer, or farmers’ market prior to authorizing payment. Each vendor operated by a
single business entity must be identified separately by matching the authorized vendor ID number with
each purchase record during EBT processing.

2.6.4 EBT Management and Reporting
The State agency must follow Advance Planning Document (APD) requirements and submit Planning and
Implementation APDs and appropriate updates for FNS approval.
If a State agency plans to incorporate additional programs in its EBT system, the State agency must
consult with State officials responsible for administering the programs prior to submitting the Planning
APD (PAPD) and must include the outcome of those discussions in the PAPD submission to FNS for
approval.
Each State agency must have implemented an active EBT project by August 1, 2016. An active EBT
project is one that is in a formal process of planning, implementation, or has completed statewide
implementation of WIC EBT.

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Annually, as part of the State plan, the State agency must submit an EBT project status report. At a
minimum, the annual status report must contain:
•
•

Until statewide EBT implementation: an outline of the EBT implementation goals and objectives
that demonstrate the State agency’s progress toward statewide EBT implementation.
After statewide EBT implementation: any information on future EBT changes and procurement
updates affecting present operations.

2.6.5 Other EBT Requirements
2.6.5.1 EBT Technical Standards and Requirements
By March 1, 2018, each statewide EBT State agency, contractor, and authorized vendor must follow, and
demonstrate compliance with:
•
•

WIC EBT Operating Rules, standards, and technical requirements issued by FNS.
Other industry standards, as required by FNS.

State agencies transitioning to EBT after that date must comply with this requirement at the time of
statewide implementation.

2.6.5.2 EBT Customer Service Standards
EBT Customer Service Standards outline how customer service will be provided to participants and
proxies.
The State agency must:
•
•

Respond to any report of a lost, stolen, or damaged card within one business day of the date of
report.
Replace EBT cards and transfer benefit balances within 7 business days of the date of report.

The State agency must establish procedures to:
•

Provide customer service during non-business hours that enable participants or proxies to:
o Report a lost, stolen, or damaged card.
o Report other card or benefit issues.
o Receive information on the EBT balance.
o Receive the current benefit end date.

The State agency may implement alternatives to the minimum service standards with FNS approval.

2.6.5.3 National Universal Product Code Database
The National Universal Product Code (NUPC) database is to be used by all State agencies using EBT to
deliver WIC food benefits.

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2.6.5.4 Exemptions from the EBT Mandate
FNS may grant an exemption to the October 1, 2020 statewide implementation requirement. To be
eligible for an exemption, a State agency must demonstrate that one or more of the following applies:
•
•
•

Unusual technological barriers to implementation exist.
Operational costs are not affordable within the nutrition services and administration (NSA)
grant.
The exemption is in the best interest of the Program.

Exemptions will remain in effect until:
•
•
•

The State agency no longer meets the conditions on which the exemption was based.
FNS revokes the exemption.
The exemption expires, or 3 years has lapsed since the date the exemption was granted,
whichever occurs first.

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Vendor Authorization

Vendor authorization is the process the State agency uses to assess, select, and enter into agreements
with applicant vendors. Vendors must apply and be selected for authorization before they can transact
WIC food instruments (FIs) or cash value vouchers (CVVs). Only authorized vendors, farmers and
farmers’ markets, home food delivery contractors, and direct distribution sites are permitted to accept
FIs and CVVs.
The State agency must choose vendors based on its current selection criteria for both initial
authorizations and reauthorizations. All contracts or agreements the State or local agency enters into for
the management or operation of food delivery systems must conform to the requirements of 2 CFR part
200, Appendix II.
The State agency must authorize the number and distribution of vendors that ensures:
•
•
•

The lowest practical food prices.
Adequate participant access to supplemental foods.
The most effective State agency management, oversight, and review of its authorized vendors.

Vendors must follow State agency policies and procedures to apply and become WIC authorized
vendors.

3.1

General Vendor Application/Authorization Requirements

State agencies must accept and process vendor applications at least once every 3 years. They may limit
vendor application periods, but they must have procedures for processing applications when a vendor is
needed to ensure adequate participant access to supplemental foods.
The State agency must collect all information needed to assess the vendor against the federal and State
selection criteria at application.
The State agency:
•

•

•
•

Must review application materials to determine whether the vendor meets all selection criteria.
o The State agency may streamline the application process for obtaining and assessing
shelf prices of chain stores. However, the process must apply the competitive price
selection criterion (CPSC) in a fair, consistent manner.
Must conduct an onsite, preauthorization visit prior to or at the time a new vendor is
authorized.
o Must review either the inventory invoices for food items, or the actual food items
present at the preauthorization visit to ensure the vendor meets minimum stocking
requirements (MSR) (see Handbook section 3.3.1.1 for more information).
Must collect the vendor applicant’s Supplemental Nutrition Assistance Program (SNAP)
authorization number if the vendor applicant is SNAP authorized.
Must ask and determine whether vendor applicants are expected to be above-50-percent (A50)
vendors, even if the State agency does not authorize A50 vendors.

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Must calculate or request from the vendor applicant the percentage of anticipated food
sales by type of payment (i.e., cash, SNAP, WIC, and credit/debit card) in order to
determine A50 status).
o Must determine whether WIC authorization is required for the store to open for
business (and must classify such vendors as A50).
May authorize vendors for a maximum of 3 years.
May not authorize a vendor applicant if it determines the store has been sold by its previous
owner in an attempt to circumvent a WIC sanction. To make this determination, the State
agency may consider whether the store has been sold at below fair market value or to relatives
of the previous owner.
Is encouraged to consider the impact of authorization decisions on small businesses.
o

•
•

•

When the State agency provides written notice of the expiration of the vendor agreement, it may, if
appropriate, notify the vendor that it does not meet the State agency’s current selection criteria, based
on recent redemption history or other factors. The State agency must not prohibit the vendor from
reapplying for vendor authorization. It must assess the vendor’s subsequent application along with
other vendor applicants and authorized vendors.
When a State agency terminates a vendor for cause, there is no minimum period a vendor must wait
before reapplying. The State agency may impose a minimum waiting period if this is established through
vendor sanctions or vendor selection criteria (recommended). The timeframes must be reasonable, as
stated in Handbook section 11.5.2. Some State agencies have found restrictions on application periods
useful in establishing annual work plans for their limited staffs.

3.2

Limiting Criteria

The State agency may establish limiting criteria to limit the number of stores it authorizes. When limiting
criteria is established, the State agency must apply the criteria consistently. If used, limiting criteria must
be included in the State Plan, as outlined in Handbook Chapter 15.
State agencies have the authority to limit the number of vendors and determine the geographical
distribution of authorized vendors. Vendor authorization should be governed by the access needs of
participants and qualifications of the vendor.
As not every vendor meeting the basic qualifications is needed to ensure participant access to
supplemental foods, limiting criteria can be used to ensure that the State agency authorizes a
manageable number of vendors. This practice may save resources related to, among other things:
vendor authorization, training, monitoring, and investigating.
To implement limiting criteria, State agencies must decide how many vendors should be authorized and
where they will be located.
State agencies must:
•
•

Apply limiting criteria consistently across the State agency, and with clear rationale.
Establish a system to revise and reapply limiting criteria, depending on demographic shifts or
significant changes in local caseload allocation, growth, or decline.
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While there are no specific criteria for limiting vendor numbers, State agencies may consider
participant-to-vendor ratios for sub-areas based on:
•
•
•
•

3.3

Population density.
Distribution of participants, local agencies, and clinics.
Availability of public transportation and road systems to the WIC population.
Supply of WIC vendors.

Vendor Selection Criteria

Vendor selection criteria are the minimum requirements that a vendor applicant must meet in order to
become WIC authorized. Implementing sound vendor selection criteria will ensure that the State agency
authorizes only vendors that provide supplemental foods and quality customer service to WIC
participants and that offer competitive prices to the Program.
The State agency must:
•
•
•

Develop and implement vendor selection criteria to select stores for authorization.
Include all federally mandated selection criteria (see Handbook section 3.3.1 for more
information) in its selection criteria.
Apply its selection criteria consistently throughout its jurisdiction.

The State agency should have procedures in place to periodically assess that vendors continue to meet
the current selection criteria. The State agency may reassess any authorized vendor at any time using
the current vendor selection criteria, and any vendor found out of compliance must have their vendor
agreement terminated.

3.3.1 Federally Mandated Selection Criteria
The State agency’s vendor selection criteria must include the six criteria described in federal regulations:
•
•
•
•
•
•

Minimum variety and quantity of supplemental foods
Business integrity
Current SNAP disqualification or civil money penalty for hardship
Competitive price
Incentive items management
Electronic Benefit Transfer (EBT) capability

In certain cases, vendor selection criteria must be waived to ensure participant access (see Handbook
section 3.3.3 for more information).

3.3.1.1 Minimum Variety and Quantity of Supplemental Foods
The State agency must establish minimum stocking requirements (MSRs) for the variety and quantity of
supplemental foods that a vendor applicant must stock at all times. The State agency may not authorize
any vendor applicant that fails to meet the MSR.

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State agencies are required to ensure that all WIC food categories are made available to participants
(see 7 CFR 246.10(b)(2)(ii)(B) for more information). State agencies typically meet this requirement, in
part, through the development of a comprehensive MSR.
All MSRs must include at a minimum, the following federally required supplemental foods:
•
•
•

Two different fruits.
Two different vegetables.
One authorized whole grain cereal authorized by the State agency.

Additionally, MSRs must require that infant formula is obtained only from sources on the State agency’s
list of infant formula retailers, wholesalers, and distributors (see Handbook section 14.5 for more
information).
Different minimums may be established for different vendor peer groups. When establishing the
minimum variety and quantity requirements, State agencies should consider:
•
•
•
•

Participants’ ability to purchase the full range of prescribed foods in order to fully meet their
supplemental nutrition needs.
Availability of various package sizes, brands, and types of supplemental foods.
Shelf space at different types of vendors.
If any exceptions to MSRs will be offered.

If exceptions to MSRs will be offered, the State agency must:
•

•
•

•

Ensure that exceptions are outlined in MSRs.
o The MSRs must also outline the process the State agency will use to review and grant
exceptions in a consistent manner.
Ensure that exceptions do not include the federally required supplemental foods or overrule the
requirement to purchase infant formula from the State agency’s list of suppliers.
Determine whether the exception criteria apply:
o Universally to all vendors, or
o Specifically to peer groups, or
o Specifically to ethnic, religious, or other specialty stores.
Ensure that MSRs are applied consistently so that all vendors are held to the same standard, at
least within peer groups.

Examples of exceptions to MSRs:
•

Ethnic or religious stores may request an exception from stocking items that are not purchased
by their patrons. For example, a store patronized by participants that strongly prefer beans may
be granted an exception from stocking peanut butter; Kosher and Halal stores may be granted
an exception from stocking non-Kosher or non-Halal foods.

•

Stores located in areas without a particular category of participant may request an exception
from stocking items that are only prescribed to those categories (e.g., infant formula, infant
foods). A State agency exercising this type of exception should include in its State Plan any
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conditions of the exception, such as making the excepted foods available within 72 hours for any
participant new to the area.

3.3.1.2 Business Integrity
The State agency must consider the business integrity of vendor applicants. To determine business
integrity, the State agency may rely solely on known facts and on vendor application information. State
agencies are not required to establish a formal system of background checks, but are encouraged to
check with appropriate State and federal authorities to verify business integrity.
The State agency may not authorize a vendor if, during the past 6 years, the vendor applicant or any of
its owners, officers or managers were convicted of crimes that show a lack of business integrity or had a
civil judgment entered against them. Crimes that show a lack of business integrity include:
•
•
•
•
•
•
•
•
•
•
•

Fraud.
Antitrust violations.
Embezzlement.
Theft.
Forgery.
Bribery.
Falsification or destruction of records.
Making false statements.
Receiving stolen property.
Making false claims.
Obstruction of justice.

FNS has not distinguished between felonies and misdemeanors because of the wide variation between
States in designating these criminal offenses.
The State agency may add other types of convictions, civil judgments, serious WIC and SNAP violations,
or other business integrity related criteria, including any of the following:
•
•
•

•
•
•
•

WIC sanctions imposed by another State agency.
Serious non-Program violations, even without a conviction.
Violations determined administratively.
o Examples: A finding from the Equal Employment Opportunity Commission that the
vendor has discriminated against minority staff. A finding from the National Labor
Relations Board that the vendor had committed unfair labor practices.
Debarment from federal contracts.
Administrative citations for unsafe working conditions or environmental hazards.
Committing vendor violations in another store location (e.g., overcharging while acting as
cashier).
Committing vendor violations while unauthorized, such as transacting WIC benefits and
submitting them for redemption through authorized vendors.
o The prohibition on authorizing these vendors may begin on the date when the pattern
requirement for the violation type was met, or the date of the first violation detected by
the State agency.
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The prohibition must not last longer than the length of the related sanction.

FNS recommends adding the following question to the vendor application: “During the past 6 years, has
any current owner, officer, or manager at your store been convicted of, or had a civil judgment, for any
of the following activities (listed above, plus any additional State agency criteria)? If so, please specify
the name of the owner, officer, or manager and the activities involved.” If the answer is “no,” and the
State agency is unaware of any contrary information, the State agency may assume the information
provided is correct and authorize the vendor. If the answer is “yes,” the State agency must determine
whether authorization of the vendor applicant is necessary to ensure adequate participant access. If a
State agency has any reason to doubt the truthfulness of these responses, the State agency is expected
to follow up.
Each store is a separate vendor and is authorized separately from other stores with the same owner. For
this reason, one store may not be disqualified because of the disqualification of another store. However,
if the circumstances of a disqualification result in the owner’s other stores’ failure to meet the selection
criteria for business integrity, the State agency may terminate the authorizations of all other stores
belonging to the owner.

3.3.1.3 Current SNAP Disqualification or Civil Money Penalty for Hardship
The State agency may not authorize a vendor applicant that is currently disqualified from SNAP or that
has been assessed a SNAP civil money penalty for hardship (and the disqualification period that would
otherwise have been imposed has not expired), unless denying authorization of such vendor applicant
would result in inadequate participant access.

3.3.1.4 Competitive Price
The State agency must establish competitive price selection criteria (CPSC) in order to assess the prices
of vendor applicants and authorize the vendors that provide the best prices to the Program while
ensuring participant access. The prices a vendor applicant charges for supplemental foods, compared to
the prices charged by other applicants and authorized vendors, are used to determine CPSC. FNS
recommends that the State agency use a vendor’s actual price history to verify the shelf prices
submitted with its current application.
The State agency must:
•
•
•
•
•
•

Develop and implement CPSC to evaluate the prices a vendor applicant charges compared to
other vendor applicants and authorized vendors.
Consider vendor applicants’ shelf or bid prices (bid prices may not exceed shelf prices).
Authorize vendors that offer the most competitive prices for supplemental foods.
Consider participant access by geographic area.
Establish CPSC levels for each peer group.
Establish procedures to ensure that authorized vendors do not increase prices to a level that
would make the vendor ineligible for authorization.

The State agency may include:

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•
•

A factor (such as inflation) in its price limitations to account for fluctuations in wholesale
prices.
An opportunity to lower prices after a store has been assessed as non-competitive in either
authorization or price monitoring processes.

FNS recommends setting CPSC by using a market basket of individual items. A State can construct a
market basket by considering a representative sample of the typical monthly quantities of food
prescribed for an individual food package or a combination of packages. The State agency may use:
•
•
•
•

Redemption request prices (EBT).
Shelf prices.
Bid prices.
Other FNS approved methodology.

A State agency may establish different CPSC levels for vendors in areas where the only stores have
higher prices than the rest of the peer group or in order to ensure adequate participant access.

3.3.1.5 Incentive Items
The State agency may not authorize, continue to authorize, or make payments to A50 vendors that
provide prohibited incentive items to participants. State agencies must approve of any incentive items
that are provided by an A50, based on federal guidelines.
For more information, see WIC Policy Memorandum 2014-3: Vendor Management: Incentive Items,
Vendor Discounts and Coupons.

3.3.1.6 EBT Capability
Once EBT has been implemented statewide, the State agency may not authorize a vendor applicant that
cannot successfully demonstrate EBT capability in accordance with State agency requirements. The only
exception is when the State agency determines the vendor is necessary for participant access and
chooses to provide equipment before authorization.

3.3.2 State Agency Imposed Selection Criteria
The State agency may develop selection criteria in addition to the federally mandated selection criteria.
Any additional criteria must be applied consistently and must not conflict with regulatory requirements,
such as the limitations on the lengths of disqualification periods for various kinds of Program violations.

3.3.3 Participant Access Considerations
The State agency must authorize an appropriate number and distribution of vendors to ensure adequate
participant access to supplemental foods. Two of the six mandatory vendor selection criteria, as well as
all State agency imposed criteria, must be waived to authorize vendor applicants needed for participant
access. For more information, see the chart below.

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Chart: Must selection criteria be waived to ensure participant access?
Selection Criteria

Must Be Waived

Minimum variety and quantity of supplemental foods (MSR)
Competitive price (CPSC)
Current SNAP disqualification/CMP for hardship
Business integrity
Incentive items
EBT Capability
All State agency criteria
* State agencies should work with vendors that do not meet CPSC to negotiate
the best possible prices for supplemental foods.
** This selection criteria applies only after EBT implementation. State agencies
must follow WIC EBT regulations and guidance related to equipping vendors that
are needed for participant access.

No
No*
Yes
Yes
No
No**
Yes

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Vendor Agreements

All State agencies that operate a retail food delivery system must enter into written agreements with all
authorized retail food vendors. The State agency must use a standard vendor agreement throughout its
jurisdiction, but it may make exceptions to meet unique circumstances, as long as it documents the
reasons for such exceptions.
To become a vendor, a retail store must:
•
•
•
•

Apply for Program authorization.
Meet or exceed the State agency’s selection criteria.
Be selected by the State agency for authorization.
Enter into an agreement with the State agency.
o Agreement must be signed by a representative that has legal authority to bind the
vendor and State agency representative.
o Vendors must accept the terms and are legally responsible for Program requirements.
o Vendors should thoroughly read and understand their vendor agreements before
signing them.

Vendor agreements must:
•
•
•
•

•

Be in effect for no more than 3 years.
Be a standard document that is used throughout the State agency’s jurisdiction.
Be signed by representatives with the authority to legally bind the vendor and the State agency.
Specify all vendors covered by the agreement.
o This enables the State agency to add or delete individual vendors without affecting the
other vendors.
Include all federally mandated vendor agreement provisions (see Handbook section 4.1 for more
information).

The State agency must:
•
•

•

Ensure that agreements are in place for all WIC authorized vendors.
Notify vendors of changes to federal or State statutes, regulations, policies, or procedures
governing the Program before the changes are implemented.
o The State agency should give as much advance notice as possible. If necessary, the
vendor agreement must be amended.
Require vendors that wish to remain WIC authorized to reapply at the expiration of their
agreements.

Provide vendors with no fewer than 15 days written notice of the expiration of their agreements. The
State agency may delegate the authority to sign vendor agreements to its local agencies. If the signing of
vendor agreements is delegated, the State agency must provide supervision and instruction to local
agencies to ensure the uniformity and quality of local agency activities.

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4.1

Vendor Agreement Provisions

The vendor agreement must contain the following provisions. The State agency may determine the
exact wording as long as all content is included.
1. Acceptance of food instruments and cash value vouchers. The vendor may accept food instruments
(FIs) and cash value vouchers (CVVs) only from participants, parents/caretakers of infant and child
participants, or proxies.
2. No substitutions, cash, credit, refunds, or exchanges. The vendor may provide only the authorized
supplemental foods listed on the FIs and CVVs.
•
•

•

The vendor may not provide unauthorized food items, non-food items, cash, or credit (including
rain checks) in exchange for FIs or CVVs.
The vendor may not provide refunds or permit exchanges for authorized supplemental foods
obtained with FIs or CVVs, except for exchanges of an identical authorized supplemental food
item. This applies only when the original authorized supplemental food item is defective,
spoiled, or has exceeded its “sell by,” “best if used by,” or other date limiting the sale or use of
the food item. An identical authorized supplemental food item is the exact brand and size as the
original authorized supplemental food item obtained and returned by the participant.
The vendor may provide only the authorized infant formula which the vendor has obtained from
approved sources to participants in exchange for FIs specifying infant formula.

3. Treatment of participants, parents/caretakers, and proxies. The vendor must offer participants,
parents/caretakers of infant and child participants, and proxies the same courtesies offered to other
customers.
4. Time periods for transacting food instruments and cash value vouchers. The vendor may accept FIs
or CVVs only within their specified time periods.
5. Purchase price on food instruments and cash value vouchers. The vendor must ensure the purchase
price is entered on FIs and CVVs in accordance with the procedures described in the vendor agreement.
The State agency may determine whether the vendor or the participant enters the purchase price. The
purchase price must include only the authorized supplemental food items actually provided and must be
entered on the FIs and CVVs before they are signed.
6. Signature on food instruments and cash value vouchers. For printed FIs and CVVs, the vendor must
ensure the participants, parents/caretakers of an infant or child participant, or proxies sign the FIs and
CVVs in the presence of the cashier. In EBT systems, a Personal Identification Number (PIN) may be used
in lieu of a signature.
7. Sales tax prohibition. The vendor may not collect sales tax on authorized supplemental foods
obtained with FIs or CVVs.
8. Food instrument and cash value voucher redemption. The vendor must submit FIs and CVVs for
redemption in accordance with the redemption procedures described in the Vendor Agreement. The
vendor may redeem FIs and CVVs only within the specified time period. As part of the redemption
procedures, the State agency:
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•
•

May make price adjustments to the purchase price on FIs submitted by the vendor for
redemption to ensure compliance with the price limitations applicable to the vendor.
Must establish and apply limits on the amount of reimbursement allowed for FIs based on a
vendor’s peer group and competitive price criteria.
o In setting allowable reimbursement levels, the State agency must consider participant
access in a geographic area and may include a factor to reflect fluctuations in wholesale
prices.

In establishing allowable reimbursement levels for A50 vendors, the State agency must ensure:
•
•

Reimbursements do not result in higher food costs than if the participants transacted their FIs at
vendors that are not A50 vendors.
Reimbursements do not result in higher average payments per FI to A50 vendors than average
payments to comparable vendors.

The State agency may make price adjustments to the purchase price on FIs submitted by the vendor for
redemption to ensure compliance with the allowable reimbursement level for the vendor.
A vendor’s failure to remain price competitive is cause for termination of the vendor agreement.
•
•

This applies even if actual payments to the vendor are within the maximum reimbursement
amount.
The State agency may exempt vendors that supply only exempt infant formula and/or WICeligible nutritionals and nonprofit A50 vendors from the allowable reimbursement limits.

9. Vendor claims. When the State agency determines the vendor has committed a vendor violation that
affects the payment to the vendor, the State agency will delay payment or establish a claim.
•
•
•
•
•

The State agency must delay payment or establish a claim in the amount of the full purchase
price of each FI or CVV that contained the vendor overcharge or other error.
The State agency will provide the vendor with an opportunity to justify or correct a vendor
overcharge or other error.
The vendor must pay any claim assessed by the State agency.
In collecting a claim, the State agency may offset the claim against current and subsequent
amounts to be paid to the vendor.
In addition to denying payment or assessing a claim, the State agency may sanction the vendor
for vendor overcharges or other errors in accordance with the State agency’s sanction schedule.

10. No charge for authorized supplemental foods or restitution from participants. The vendor may not
charge participants, parents/caretakers of infant and child participants, or proxies, for authorized
supplemental foods obtained with FIs or CVVs. In addition, the vendor may not seek restitution from
these individuals for FIs or CVVs not paid or partially paid by the State agency.
11. Split tender for cash value vouchers. The vendor must allow the participant, authorized
representative, or proxy to pay the difference when a fruit and vegetable purchase exceeds the value of
the CVV. This is called a split tender transaction.
12. Training. At least one representative of the vendor must participate in training annually.
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•
•

Vendor training may be provided by the State agency in a variety of formats, including
newsletters, videos, and interactive training.
The State agency will designate the date, time, and location of all interactive training. The State
agency will provide the vendor with at least one alternative date to attend the training.

13. Vendor training of staff. The vendor must inform and train cashiers and other staff members on
Program requirements.
14. Accountability for owners, officers, managers, and employees. The vendor is accountable for its
owners, officers, managers, agents, and employees who commit vendor violations.
15. Monitoring. The vendor may be monitored for compliance with program requirements.
16. Recordkeeping. The vendor must maintain inventory records used for federal tax reporting
purposes and other records the State agency may require for the period of time specified by the State
agency in the vendor agreement. On request, the vendor must make available to representatives of the
State agency, the Department, and the Comptroller General of the United States, at any reasonable time
and place for inspection and audit, all FIs and CVVs in the vendor’s possession and all program-related
records.
17. Termination. The State agency will immediately terminate the agreement if it determines that the
vendor has provided false information in connection with its application for authorization. Either the
State agency or the vendor may terminate the agreement for cause after providing advance written
notice of a period of not less than 15 days to be specified by the State agency.
18. Change in ownership or location or cessation of operations. The vendor must provide the State
agency advance written notification of any change in vendor ownership, store location, or cessation of
operations. In such instances, the State agency will terminate the vendor agreement.
Exception: The State agency may permit vendors to move short distances without terminating the
agreement. The State agency has the discretion to determine the length of advance notice required for
vendors reporting changes under this provision, whether a change in location qualifies as a short
distance, and whether a change in business structure constitutes a change in ownership.
19. Sanctions. In addition to claims collection, the vendor may be sanctioned for vendor violations in
accordance with the State agency’s sanction schedule.
•
•

Sanctions may include administrative fines, disqualification, and civil money penalties instead of
disqualification.
The State agency must notify a vendor in writing when an investigation reveals an initial
incidence of a violation for which a pattern of incidences must be established in order to impose
a sanction, before another such incidence is documented, unless the State agency determines,
in its discretion, on a case-by-case basis, that notifying the vendor would compromise an
investigation.

20. Conflict of interest. The State agency will terminate the agreement if the State agency identifies a
conflict of interest, as defined by applicable State laws, regulations, and policies, between the vendor
and the State agency or its local agencies.
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21. Criminal penalties. A vendor who commits fraud or abuse in the Program may be prosecuted under
applicable federal, State, or local laws. Those who willfully misapply, steal, or fraudulently obtain
program funds will be subject to a fine of not more than $25,000 or imprisonment for not more than 5
years or both, if the value of the funds is $100 or more. If the value is less than $100, the penalties are a
fine of not more than $1,000 or imprisonment for not more than 1 year or both.
22. Not a license/property interest. The vendor agreement does not constitute a license or a property
interest.
•
•

If the vendor wants to stay authorized beyond the period of its current agreement, the vendor
must reapply for authorization.
If a vendor is disqualified, the State agency will terminate the vendor’s agreement, and the
vendor will have to reapply in order to be authorized after the disqualification period is over.
o In all cases, the vendor’s new application will be subject to the State agency’s vendor
selection criteria and any vendor limiting criteria in effect at the time of the
reapplication.

23. Compliance with vendor agreement, statutes, regulations, policies, and procedures. The vendor
must comply with the vendor agreement and federal and State statutes, regulations, policies, and
procedures governing the Program, including any changes made during the agreement period.
24. Nondiscrimination regulations. The vendor must comply with the nondiscrimination provisions of
Departmental regulations (7 CFR parts 15, 15a and 15b).
25. Compliance with vendor selection criteria. The vendor must comply with the vendor selection
criteria throughout the agreement period, including any changes to the criteria. Using the current
vendor selection criteria, the State agency may reassess the vendor at any time during the agreement
period. The State agency will terminate the vendor agreement if the vendor fails to meet the current
vendor selection criteria.
26. Reciprocal SNAP disqualification for WIC Program disqualifications. Disqualification from the WIC
Program may result in disqualification as a retailer in SNAP. Such disqualification may not be subject to
administrative or judicial review under SNAP.
27. [Effective March 1, 2017] EBT minimum lane coverage. Point of Sale (POS) terminals used to support
the WIC Program shall be deployed in accordance with the minimum lane coverage provisions of 7 CFR
246.12(z)(2). The State agency may remove excess terminals if actual redemption activity warrants a
reduction consistent with the redemption levels outlined in 7 CFR 246.12(z)(2)(i) and (z)(2)(ii).
28. EBT third-party processing costs and fees. The vendor shall not charge to the State agency any thirdparty commercial processing costs and fees incurred by the vendor from EBT multi-function equipment.
Commercial transaction processing costs and fees imposed by a third-party processor that the vendor
elects to use to connect to the EBT system of the State shall be borne by the vendor.
29. EBT interchange fees. The State agency shall not pay or reimburse the vendor for interchange fees
related to WIC EBT transactions.

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30. [Effective March 1, 2018] EBT ongoing maintenance and operational costs. The State agency shall
not pay for ongoing maintenance, processing fees or operational costs for vendor systems and
equipment used to support WIC EBT after the State agency has implemented WIC EBT statewide, unless
the equipment is used solely for the WIC Program or the State agency determines the vendor using
multi-function equipment is necessary for participant access. This provision also applies to authorized
farmers and farmers’ markets. Costs shared by a WIC State agency will be proportional to the usage for
the WIC Program.
31. [Effective March 1, 2018] Compliance with EBT operating rules, standards and technical
documents. The vendor must comply with the Operating rules, standards and technical requirements
established by the State agency.

4.2

Additional Agreement Requirements

The vendor agreement must also include all of the following (in the agreement, or as attachments/web
links):
•

•
•
•

•

4.3

Notification of program changes. The State agency must notify vendors of changes to federal or
State statutes, regulations, policies, or procedures governing the Program before the changes
are implemented. The State agency should give as much advance notice as possible.
Purchase price and redemption procedures. The redemption procedures must ensure that the
State agency does not pay a vendor more than the price limitations applicable to the vendor.
Sanction schedule. The State agency must include its sanction schedule in the vendor
agreement.
Actions subject to administrative review and review procedures. The State agency must
include the adverse actions a vendor may appeal and those adverse actions that are not subject
to administrative review and the State agency’s administrative review procedures in the vendor
agreement.
Allowable and prohibited incentive items for above-50-percent (A50) vendors. The vendor
agreement for an A50 vendor must include the State agency’s policies and procedures related to
the provision of incentive items, including the State agency’s policies for approving incentive
items.
Compliance with EBT operating rules, standards and technical requirements. The vendor must
comply with the Operating rules, standards and technical requirements established by the State
agency.

Terminating Vendor Agreements

When the State agency disqualifies a vendor, it must terminate the vendor agreement. The State agency
may not accept voluntary withdrawal of the vendor as an alternative to disqualification for mandatory
federal sanctions (see Handbook section 9.1.4 for more information). The State agency must enter the
disqualification on the vendor’s record. Additionally, the State agency may not use nonrenewal of the
vendor agreement as an alternative to disqualification.
The State agency must terminate the vendor agreement if the State agency determines that the vendor
has provided false information on its application, as outlined in the vendor agreement (see Handbook
section 4.1 for more information).
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If a vendor grants power of attorney to another person to operate the business, this does not mean that
ownership has been transferred to the other party. It means the other party has been legally granted
the power to make business decisions on the owner’s behalf. Thus, granting power of attorney should
not be cause for termination of the vendor agreement.

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Vendor Training

The State agency must train all vendors annually. Each year, the State agency must provide training to
one or more representatives of each vendor; this is referred to as annual training. Annual training may
be presented in a variety of formats, including webinars, newsletters, videos, etc. At least every 3 years,
annual training must be presented in an interactive format (see Handbook section 5.1 for more
information).
The purpose of vendor training is to improve vendors’ understanding of Program rules and requirements
to enhance compliance and prevent errors. Training for vendors must be designed to prevent errors and
noncompliance, and to improve service. At a minimum, annual training must include:
•
•
•
•
•
•
•
•
•
•

The purpose of the WIC Program.
Approved supplemental foods.
Minimum stocking requirements.
The requirement to obtain infant formula only from sources included on the State agency’s list
of infant formula providers.
Procedures for transacting and redeeming WIC FIs and CVVs.
The vendor sanction system.
The vendor complaint process.
Claims procedures.
Incentive item policies.
Changes to Program requirements since the last training. This includes changes to federal and
State statutes, regulations, policies, or procedures affecting the Program.

The State agency must document the content covered and vendor participation in all trainings. The
State agency may delegate vendor training to a local agency, contractor, or a vendor representative. If
training is delegated, the State agency must also provide instruction and supervision to ensure the
uniformity and quality of delegated vendor training.
If the State agency provides training to a chain store’s trainer, the State agency must document that it
provided enough training materials for each vendor (i.e., each chain store location).
The vendor is accountable for its owners, officers, managers, agents, and employees who commit
vendor violations.

5.1

Interactive Training

The State agency must provide training in an interactive format before or at the time of a vendor’s initial
authorization, and at least every 3 years thereafter.
Interactive training must cover all topics required in annual training and must provide vendors the
opportunity to ask questions and receive immediate answers. The vendor must inform and train cashiers
and other staff on Program requirements.
Examples of interactive training include:
•

On-site cashier training.
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•
•

Off-site classroom training.
Train-the-trainer sessions.

The State agency must:
•
•
•
•

Set the date, time, and location of the interactive training.
Specify the audience (e.g., managers, cashiers) for the training.
Provide vendors with at least one alternative date to attend training.
Document the training’s content and vendor participation.

When scheduling training, the State agency:
•
•

Should take into account the scheduling limitations of vendors with small staffs.
May delegate interactive vendor training to local agencies or a contractor.

If delegated, the State agency must provide supervision and instruction to ensure the uniformity and
quality of the vendor training.
•

An interactive, onsite preauthorization visit that takes place before the effective date of the
vendor agreement may count toward the interactive training requirement.

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Vendor Cost Containment {Redacted}

! In accordance with 5 U.S.C. § 552(b)(7)(E), this information is not available for public sharing.

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High Risk Vendor Identification System {Redacted}

! In accordance with 5 U.S.C. § 552(b)(7)(E), this information is not available for public sharing.

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Monitoring & Investigations {Redacted}

! In accordance with 5 U.S.C. § 552(b)(7)(E), this information is not available for public sharing.

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Sanctions

Sanctions are adverse actions taken by State agencies in response to violations of Program rules, policies
or procedures by vendors or participants. Participant and vendor sanctions must be based on evidence.

9.1

Vendor Sanctions

State agencies that operate a retail food delivery system must develop and implement a system for
sanctioning vendors that violate Program rules. This system must include a sanction schedule, which
must include all mandatory federal and State agency vendor sanctions (see Handbook sections 8.1.4 and
8.1.7 for more information). Sanctions may include administrative fines, disqualification, and civil money
penalties (CMPs) in lieu of disqualification. Vendors must be sanctioned for vendor violations in
accordance with the State agency’s sanction schedule.
The State agency may not accept voluntary withdrawal of the vendor from the Program as an alternative
to disqualification; the disqualification must be recorded in the vendor’s file and notification must be
sent to SNAP, as appropriate. In addition, the State agency may not use nonrenewal of the vendor
agreement as an alternative to disqualification.

9.1.1 Participant Access Determination
The State agency must develop participant access criteria, which allows it to determine if participants in
a certain area have adequate access to supplemental foods. Checking a vendor location against the
established participant access criteria is called a participant access determination. When the State
agency develops participant access criteria, it must consider the availability of other authorized vendors
in the same areas and any geographic barriers to these vendors.
Before disqualifying a vendor (for non-permanent disqualifications), the State agency must determine if
it would result in inadequate participant access. The State agency may also make a participant access
determination before imposing permanent disqualification if it includes this provision in its State Plan.
If a participant access determination finds that the disqualification of a vendor would result in
inadequate participant access, the State agency must impose a civil money penalty (CMP) instead of
disqualification (see Handbook section 9.2 for more information). However, the State agency may not
impose a CMP for third or subsequent sanctions for violations with mandatory disqualification periods
(see Handbook sections 9.1.4.2, 9.1.4.3, and 9.1.4.4 for more information). Participant access
determinations for all vendors that receive a disqualification or CMP instead of a disqualification must
be documented in the vendor file.

9.1.2 Pattern of Violations
Some mandatory federal sanctions (see Handbook section 9.1.4 for more information) and all State
agency vendor sanctions must be based on a pattern of violations. For the purpose of establishing a
pattern of violations, all incidences of a violation that occur during the first compliance buy of a
compliance investigation must be considered one incidence.
The State agency must develop a definition of pattern of violations.
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•
•
•
•

•

Patterns should be defined such that a sufficient number of buys are conducted to indicate
noncompliance with WIC vendor requirements.
The definition of a pattern of violations may be different for different types of violations (e.g., to
account for severity).
State agencies may use “two or more buys,” as their definition of pattern of violations in order
to allow for flexibility in its investigative and sanctioning activities.
FNS recommends that the State agency seek advice from its Attorney General or General
Counsel’s Office to determine the definition of pattern that is sufficient for a sanction to be
issued.
Patterns used for sanctioning must be for the same type of violation.

When, during the course of a single investigation, the State agency determines a vendor has committed
multiple violations (which may include violations subject to State agency sanctions), the State agency
must disqualify the vendor for the period corresponding to the most serious (i.e., longest) mandatory
federal violation. The State agency must include all violations in the notice of adverse action. If the most
serious mandatory federal sanction is not upheld on appeal, the State agency may impose a State
agency sanction.

9.1.3 Notification of Violations
For violations that require a pattern of incidences (except for a pattern of claiming reimbursement for
the sale of an amount of a specific supplemental food item which exceeds documented inventory), the
State agency must notify a vendor in writing when an investigation reveals an initial incidence of a
violation. Notification must be provided before another incidence of a violation is documented. The
State agency may continue its investigation after the notice of violation is received, or presumed to be
received, by the vendor. The State agency may use the same notification method it uses to notify a
vendor of the time and place of an administrative review (see Handbook Chapter 11 for more
information).
Exception: If the State agency determines that notifying a vendor would compromise an investigation, it
is not required to notify the vendor. It must, however, document in the vendor file the reason(s) for
determining that notification would compromise the investigation. Such determination must be made
on a case-by-case basis, and documentation must be filed before a sanction is imposed.

9.1.4 Mandatory Federal Vendor Sanctions
The State agency must include in its sanction schedule all mandatory federal vendor sanctions (see
below).

9.1.4.1 Permanent disqualification
The State agency must permanently disqualify a vendor for:
•
•

One conviction for buying or selling food instruments (FIs) or cash value vouchers (CVVs) for
cash (trafficking).
One conviction for selling firearms, ammunition, explosives, or controlled substances (as defined
in section 102 of the Controlled Substances Act (21 U.S.C. 802)) in exchange for FIs or CVVs.
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A vendor is not entitled to receive any compensation for revenues lost as a result of such violation.
If reflected in its State Plan, the State agency may impose a CMP instead of a disqualification for this
violation when it determines, in its sole discretion, and documents that either:
•
•

Disqualification of the vendor would result in inadequate participant access.
The vendor had, at the time of the violation, an effective policy and program in effect to prevent
trafficking; and the ownership was not aware of, did not approve of, and was not involved in the
conduct of the violation.

9.1.4.2 Six year disqualification
The State agency must disqualify a vendor for 6 years for:
•
•

One incidence of buying or selling FIs or CVVs for cash (trafficking).
One incidence of selling firearms, ammunition, explosives, or controlled substances (as defined
in section 102 of the Controlled Substances Act (21 U.S.C. 802)) in exchange for FIs or CVVs.

9.1.4.3 Three year disqualification
The State agency must disqualify a vendor for 3 years for:
•
•
•
•

•
•

One incidence of the sale of alcohol, alcoholic beverages, or tobacco products in exchange for
FIs or CVVs.
A pattern of claiming reimbursement for the sale of an amount of a specific supplemental food
item that exceeds the store’s documented inventory of that food for a specified time.
A pattern of vendor overcharges.
A pattern of receiving, transacting, and/or redeeming FIs or CVVs outside of authorized
channels, including the use of an unauthorized vendor or an unauthorized person.
o See Handbook section 3.3.1 (Business Integrity) for information on unauthorized
vendors involved in this violation.
A pattern of charging for supplemental foods not received by the participant.
A pattern of providing credit or non-food items (other than alcohol, alcoholic beverages,
tobacco products, cash, firearms, ammunition, explosives, or controlled substances) in exchange
for FIs or CVVs.

9.1.4.4 One year disqualification
The State agency must disqualify a vendor for 1 year for:
•
•

A pattern of providing unauthorized food items in exchange for FIs or CVVs, including charging
for supplemental foods provided in excess of those on the food instrument.
A pattern of an A50 vendor providing prohibited incentive items to customers.

9.1.4.5 Second mandatory sanction
When a vendor receives a mandatory sanction for the second time (regardless of whether it is for the
same violation), the State agency must double the second sanction. CMPs may only be doubled up to
the maximum allowable CMP amount.
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9.1.4.6 Third or subsequent mandatory sanction
When a vendor receives a mandatory sanction after its second mandatory sanction (regardless of
whether it is for the same violation(s)), the State agency must double the sanction. The State agency
may not impose CMPs instead of disqualification for third or subsequent sanctions.

9.1.4.7 Disqualification based on a SNAP disqualification or CMP for hardship
The State agency must disqualify a vendor that has been disqualified from SNAP. Such disqualification:
•
•
•

Must be for the same length of time as SNAP disqualification.
May begin at a later date than the SNAP disqualification.
Is not subject to administrative or judicial review under the WIC Program.

The State agency may disqualify a vendor that has been assessed a CMP for hardship in SNAP (see
Handbook section 3.3.1.3 for more information). If a State agency exercises this option, it must:
•
•
•
•

Include this in its sanction schedule.
Disqualify the vendor for the same length of time that the vendor would have been
disqualified by SNAP.
Determine if disqualification of the vendor would result in inadequate participant
access. If it would, the State agency must impose a CMP instead of disqualification.
Include documentation of its participant access determination and any supporting
documentation in the vendor’s file.

9.1.5 State Agency Vendor Sanctions
The State agency may include additional violations and sanctions to its sanction schedule. All State
agency sanctions must be based on a pattern of violations.
State agency sanctions may include, but are not limited to:
•
•
•
•

Vendor violations that are not already addressed by the mandatory federal sanctions (see
Handbook 9.1.4 for more information).
Disqualifications (or CMPs in lieu of disqualification) not to exceed 1 year for violations
uncovered in a single investigation.
Administrative fines.
Reciprocal sanctions with other State agencies.
o The length of the disqualification must be for the same length of time as the
disqualification by the other WIC State agency, or in the case of a CMP instead of
disqualification assessed by the other WIC State agency, for the same length of time for
which the vendor would otherwise have been disqualified.

9.1.6 Civil Money Penalties
For vendor sanctions that require a participant access determination, the State agency must assess a
CMP instead of a disqualification if a vendor is needed to ensure adequate participant access. CMPs
must be calculated in accordance with federal regulations (see below).
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If a CMP is assessed instead of a disqualification, the State agency must include documentation of the
participant access determination, including supporting documentation, in the vendor file. The State
agency may use installment plans for the collection of civil money penalties and administrative fines.
If a vendor does not pay a CMP in full, the State agency must disqualify the vendor for the length of the
disqualification for which the CMP was assessed.

9.1.6.1 Calculating a CMP
For each violation subject to a mandatory sanction, the State agency must use the following formula to
calculate a CMP imposed instead of disqualification (up to the maximum allowable CMP amount, see
below):
•

•
•

•

Determine the vendor’s average monthly redemptions for at least the 6 month period
ending with the month immediately preceding the month during which the notice of
adverse action is dated.
Multiply the average monthly redemptions figure by 10 percent (.10).
Multiply the product by the number of months for which the store would have been
disqualified. This is the amount of the CMP, provided that it does not exceed the maximum
allowable CMP amount.
For a violation that warrants permanent disqualification, the amount of the CMP shall be
the maximum amount specified for each violation. When during the course of a single
investigation the State agency determines a vendor has committed multiple violations, the
State agency must impose a CMP for each violation.
The total amount of CMPs imposed for violations investigated as part of a single
investigation may not exceed the amount specified as the maximum penalty for violations
occurring during a single investigation.

The maximum CMP amounts are periodically updated. See 7 CFR 3.91(b)(3)(v-vi) for the most current
information. To date the maximum CMP amounts are as follows:
• Vendor convicted of trafficking in food instruments: maximum of $11,000 for each violation
(maximum penalty for violations occurring during a single investigation: $49,000).
• Vendor convicted of selling firearms, ammunition, explosives, or controlled substances in
exchange for food instruments: maximum of $11,000 for each violation (maximum penalty for
violations occurring during a single investigation: $49,000).

9.1.7 Violation Location
Most vendor violations occur on store premises or in administrative offices. Violations such as
overcharging or charging for supplemental foods not received, for example, cannot occur outside of a
WIC transaction. Other vendor violations, such as trafficking, can occur anywhere.
If a vendor’s owners, officers, or managers commit vendor violations that warrant a mandatory federal
sanction, the State agency must sanction the vendor no matter where the violations occurred.
If a vendor’s employee commits a violation outside of a WIC transaction on the vendor’s premises (e.g.,
in the store or parking lot), the State agency must consider sanctioning the vendor. FNS recommends
sending the vendor a warning letter indicating that one of its employees has committed a vendor
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violation that may affect the vendor’s continued authorization in the Program. When appropriate, the
State agency should refer the employee to federal, State, or local authorities for prosecution under
applicable laws.

9.2

Participant Sanctions

The State agency must establish procedures designed to control participant violations, including
violations that participants commit in collusion with vendors. The State agency must also establish
sanctions for participant violations, including the required 1 year disqualifications listed below.
Additional participant sanctions may include disqualification from the Program for up to 1 year. The
State agency may provide warnings before imposing participant sanctions.
The State agency must disqualify the participant for 1 year:
•
•
•

Any time it assesses a claim of $100 or more.
Any time it assesses a claim for dual participation.
Any time it assesses a second or subsequent claim of any amount.

Exception: The State agency may terminate a disqualification and allow a participant to reapply for
certification, or may decide not to impose a disqualification if, within 30 days of receipt of the letter
demanding repayment, one of the following occurs:
•
•
•

Full restitution is made.
A repayment schedule is agreed upon.
In the case of a participant under age 18, the State or local agency approves the designation of a
proxy.

When the State agency notifies a participant of a disqualification, it must:
•
•

Tell the participant how to obtain a fair hearing (see 7 CFR 246.9 for more information).
Make a referral, if appropriate, to federal, State, or local authorities for prosecution under
applicable statutes.

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Vendor Claims

The State agency must design and implement a system to review food instruments (FIs) and cash value
vouchers (CVVs) submitted by vendors for redemption to ensure compliance with the applicable price
limitations and to detect questionable FIs or CVVs, suspected vendor overcharges, and other errors. This
review may be completed before or after the State agency makes payments on FIs or CVVs (pre- or postedit – see below).
This review must:
•
•

Examine all or a representative sample of the FIs and CVVs.
Include a price comparison or other edit designed to:
o Ensure compliance with applicable price limitations.
o Assist in detecting vendor overcharges.

In addition, for printed FIs and CVVs, the system must detect the following errors:
•
•
•
•
•

Purchase price missing.
Participant, parent, caretaker, or proxy signature missing.
Vendor identification missing.
FIs or CVVs transacted or redeemed after the specified time periods.
Altered purchase price.

The State agency must take follow-up action within 120 days of detecting any questionable FIs or CVVs,
suspected vendor overcharges, or other errors. It must implement procedures to reduce the number of
errors when possible.
The State agency may detect vendor violations through compliance investigations, FI or CVV reviews, or
other reviews or investigations of a vendor’s operations.
When the State agency determines a vendor has committed a vendor violation that affects the payment
to the vendor, the State agency must delay payment or establish a claim.
The State agency may use the full purchase price of each FI or CVV that contained the overcharge or
error when delaying payment or establishing the claim.
For FI or CVV delayed payments and claims, the State agency must provide a vendor with an opportunity
to justify or correct the vendor overcharge or other error. If satisfied with the justification or correction,
the State agency must provide payment or adjust the proposed claim accordingly.
The State agency must deny payment or initiate claims collection action within 90 days or whichever is
later:
•
•

Detecting the vendor violation; or
Completing the review or investigation giving rise to the claim.

The State agency may collect claims through offsets against current and subsequent amounts owed to
the vendor.
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Administrative Review

The State agency must impose sanctions on vendors for non-compliance with the WIC Program’s
regulations, policies, and procedures (see Handbook Chapter 9 for more information). Vendors may
request an administrative review of certain sanctions and other adverse actions, in accordance with
Program rules.
The State agency must include a copy of the State’s administrative review procedures in the vendor
agreement (or as an attachment or a cross reference to the procedures’ location in State law or
regulations), or must include a statement that administrative review procedures are available on
request. The applicable administrative review procedures must also be provided with notification of an
adverse action subject to review.

11.1

Adverse Actions Subject to Full Administrative Review

The State agency must provide full administrative reviews (see Handbook section 11.5 for more
information) to vendors when they appeal any of the following:
•

•
•
•

11.2

Denial of authorization based on:
o Application of the vendor selection criteria for minimum variety and quantity of authorized
supplemental foods (see Handbook section 3.3.1 for more information).
o A determination that the vendor is attempting to circumvent a sanction (see Handbook
section 3.1 for more information).
Termination of an agreement for cause (see Handbook section 4.3 for more information).
Disqualification, except those disqualifications subject to abbreviated administrative review or
not subject to review (see Handbook sections 9.1, 11.2, and 11.3 for more information).
Imposition of a fine or a civil money penalty (CMP) instead of disqualification (see Handbook
section 9.1 for more information).

Adverse Actions Subject to Abbreviated Administrative Review

The State agency must provide abbreviated administrative reviews (see Handbook section 11.5 for more
information) for vendors that appeal any of the following adverse actions:
•

•

Denial of authorization based on:
o Vendor selection criterion for business integrity (see Handbook section 3.3.1 for more
information).
o Vendor selection criterion for current SNAP disqualification or CMP for hardship (see
Handbook section 3.3.1 for more information).
o State agency-established vendor selection criteria related to WIC vendor sanctions or SNAP
authorization (see Handbook section 3.3.2 for more information).
o State agency’s vendor limiting criteria (see Handbook section 3.2 for more information).
o Vendor submission of application outside of State agency timeframes.
o Determination of current SNAP authorization.
Disqualification based on any of the following (see Handbook section 9.1 for more information):
o Trafficking conviction.
o Imposition of a SNAP CMP for hardship.
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•
•
•
•

o Disqualification or CMP instead of a disqualification based on a mandatory federal sanction
imposed by another WIC State agency.
Application of vendor peer group criteria.
Application of criteria used to identify vendors that are A50 vendors or comparable to A50
vendors.
Termination of an agreement because of a change in ownership, location, or cessation of
operations (see Handbook section 4.1 for more information).
A WIC CMP imposed instead of disqualification based on a SNAP disqualification (see Handbook
section 9.1 for more information).

Note: The State agency may decide to provide full abbreviated reviews for any or all of the above listed
adverse actions.

11.3

Actions Not Subject to Review

The State agency may not provide administrative reviews to vendors that appeal the following actions:
•

•

•
•
•

•

The validity or appropriateness of any of the following:
o Vendor limiting criteria (see Handbook section 3.2 for more information).
o Vendor selection criteria (see Handbook section 3.3 for more information) for:
 Minimum variety and quantity of supplemental foods.
 Business integrity.
 Current SNAP disqualification or CMP for hardship.
 Competitive price.
o Peer group criteria.
o A50 vendor identification methods.
o Participant access criteria or determinations (see Handbook section 9.1.1 for more
information).
o Prohibition of incentive items.
o Denial of an A50 vendor’s request to provide incentive items.
The State agency’s determination of any of the following:
o Include or exclude an infant formula manufacturer, wholesaler, distributor, or retailer from
its list of suppliers (see Handbook section 13.5 for more information).
o Whether or not to notify a vendor in writing when an investigation reveals an initial violation
when a pattern is needed in order to impose a sanction.
o Whether a vendor had an effective policy and program in place to prevent trafficking, and
whether the owner was involved in any way (see Handbook section 7.1 for more
information).
Denial of authorization if the State agency’s vendor authorization is subject to the procurement
procedures applicable to the State agency.
Expiration of a vendor’s agreement (see Handbook Chapter 4 for more information).
Disputes regarding food instrument or cash value voucher payments and vendor claims (other
than to justify or correct a vendor overcharge or other error) (see Handbook section 4.1 for
more information).
Disqualification of a vendor as a result of disqualification from SNAP (see Handbook section
9.1.4 for more information).
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11.4

Farmers and Farmers’ Markets

The State agency will provide a hearing procedure for farmers or farmers’ markets to appeal adverse
actions that affect them. A farmer or farmers’ market may appeal the following:
•
•
•

Denial of application.
Sanction.
Disqualification.

Expiration of an agreement is not subject to appeal.

11.5

Administrative Review Procedures

State agency procedures must specify that both full and abbreviated review decisions are final. The
State agency must make adverse actions to vendors/farmers/farmers’ market effective on the following
dates:
•
•
•

On the same day the vendor/farmer/farmers’ market receives notice for denials of authorization
and disqualifications.
For all other adverse actions, no earlier than 15 days and no later than 90 days after the date of
the notice.
If the adverse action is subject to administrative review, no later than the date the
vendor/farmer/farmers’ market receives the review decision.

A local agency, farmer or farmers’ market or vendor appealing a decision is not relieved of the
responsibility of continued compliance with the terms of any written agreement with the State agency.
The State agency must inform a vendor, farmer or farmers’ market or local agency that it may be able to
pursue judicial review of the decision if the administrative review decision upholds the adverse action
against them.

11.5.1 Notification of Adverse Action
11.5.1.1 Notification to Vendors
The State agency must notify vendors in writing at the close of an investigation that reveals violations.
At a minimum, the notification must include:
•
•

•
•
•

The adverse action.
Cause(s) for the adverse action.
o All violations uncovered during an investigation should be included in the notice of
adverse action.
The effective date of the adverse action.
Procedures to follow to obtain a full administrative review, including relevant time periods and
deadlines.
When a vendor is disqualified due in whole or in part to mandatory federal violations, such
notification must include the following statement: “This disqualification from WIC may result in
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disqualification as a retailer in SNAP. Such disqualification is not subject to administrative or
judicial review under SNAP.”

11.5.1.2 Notification to FNS
The State agency must provide a copy of the notice of adverse action to the appropriate FNS office for
all vendors it has either disqualified or imposed a CMP instead of disqualification for all mandatory
federal violations. This notice must be provided within 15 days of the expiration of the vendor’s
opportunity to file for a WIC administrative review or after all of the vendor’s WIC administrative
reviews have been completed.
This notification must include:
•
•
•
•
•

Vendor name.
Vendor address.
Vendor identification number.
Type(s) of violation(s).
Length of disqualification (or length of the disqualification corresponding to the violation for
which the civil money penalty was assessed).

11.5.2 Full Administrative Review Procedures
The State agency must develop procedures for a full administrative review of the adverse actions. The
State agency must provide vendors, farmers, and farmers’ markets with all of the following:
•

•
•
•
•

•

Adequate advance notice of the time and place of the administrative review so all parties can
prepare for the review.
o The opportunity to present its case and at least one opportunity to reschedule the
review date upon request. The State agency may set standards on how many review
dates can be scheduled, as long as at least two review dates are allowed.
The opportunity to cross-examine adverse witnesses. A protective screen or other device may
be used to protect the identity of WIC Program investigators when necessary.
The opportunity to be represented by counsel.
The opportunity to examine the evidence the State agency used for the action prior to the
review.
An impartial decision-maker to review whether the State agency has correctly applied federal
and State statutes, regulations, policies, and procedures governing the Program, according to
evidence presented at the review. The State agency may appoint a reviewing official to review
appeal decisions to make sure they follow approved policies and procedures.
Written notification of the review decision, including the basis for the decision:
o Within 90 days from the date of receipt of the request for an administrative review from
a vendor, farmer, or farmer’s market.
o Within 60 days from the date of receipt of a local agency’s request for an administrative
review.

Note: The above timeframes are administrative requirements and are not a basis for overturning an
adverse action if the decision is not made within the timeframe.
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11.5.3 Abbreviated Administrative Review Procedures
Unless a State agency decides to provide full administrative reviews for adverse actions, the State
agency must develop procedures for an abbreviated administrative review. At a minimum, these
procedures must provide the vendor, farmer, or farmers’ market with the following:
•

•

Written notification of the adverse action, the procedures to obtain an abbreviated
administrative review, the cause(s) for and the effective date of the action, and an opportunity
to provide a written response.
A decision-maker to use the available information to determine whether the State agency has
correctly applied federal and State statutes, regulations, policies, and procedures governing the
Program. The decision-maker will be someone other than the person who made the initial
decision on the action.
Written notification of the review decision, including the basis for the decision, within 90 days of
the date of receipt of the request for an administrative review. This timeframe is an
administrative requirement and is not a basis for overturning an adverse action if the decision is
not made within 90 days.

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Farmers and Farmers’ Markets

This chapter describes provisions specific to farmers and farmers’ markets that accept CVVs for the WIC
Program. This chapter does not address the Farmers Market Nutrition Program (FMNP).
Farmers are individuals authorized by the State agency to sell eligible fruits and vegetables to
participants at farmers’ markets or roadside stands. A farmers’ market is an association of local farmers
who sell produce together at a specific location directly to consumers.

12.1

Authorization of Farmers and Farmers’ Markets

The State agency may authorize farmers, farmers’ markets, and/or roadside stands to accept CVVs for
eligible fruits and vegetables. Only farmers or farmers’ markets authorized by the State agency may
redeem CVVs. After statewide EBT implementation, the State agency may not authorize a farmer or
farmers’ market that cannot successfully demonstrate EBT capability in accordance with State agency
requirements, unless the State agency determines the farmer or farmers’ market is necessary for
participant access.
The State agency must enter into written agreements with all authorized farmers and/or farmers’
markets (see Handbook section 12.2 for more information). The State agency must require farmers or
farmers’ markets to reapply at the expiration of their agreements and must provide farmers or farmers
markets with not less than 15 days advance written notice of the expiration of the agreement.
The farmer or farmers’ market must not:
•
•
•

Collect sales tax on CVV purchases.
Seek restitution from WIC participants, parents or caretakers of child participants or proxies for
CVV not paid or partially paid by the State agency.
Issue cash change for purchases that are in an amount less than the value of the CVV.

The State agency may deny payment to the farmer or farmers’ market for improperly redeemed CVV
and may issue claims for payments already made on improperly redeemed vouchers.

12.2

Farmer and Farmers’ Market Agreements

The agreement must be signed by a representative who has legal authority to obligate the farmer or
farmers’ market and a representative of the State agency. The agreement period is not to exceed 3
years. Neither the State agency nor the farmer or farmers’ market is obligated to renew the agreement.
The State agency, the farmer, or farmers’ market may terminate the agreement for cause after
providing advance written notification.
Those State agencies that authorize farmers’ markets, but not individual farmers, must require
authorized farmers’ markets to enter into a written agreement with each farmer within the market that
is authorized to accept CVVs. The State agency will set forth the required terms for the written
agreement, and provide a sample agreement for use by the farmers’ market.

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12.2.1 Farmer and Farmers’ Market Agreement Provisions
The agreement must include all of the following provisions, although the State agency may determine
the exact wording. The farmer or farmers’ market must:
1. Assure that the CVV is redeemed only for eligible fruits and vegetables as defined by the State
agency.
2. Provide eligible fruits and vegetables at or below the current price charged to other customers.
3. Accept the CVV within the dates of their validity and submit the vouchers for payment within the
allowable time period established by the State agency.
4. Redeem the CVV in accordance with a procedure established by the State agency. The procedure
must include a requirement for the farmer or farmers’ market to allow the participant, authorized
representative or proxy to pay the difference when the purchase of fruits and vegetables exceeds
the value of the CVV (also known as a split tender transaction).
5. Accept training on CVV procedures and provide training to any employees with CVV responsibilities
on such procedures.
6. Agree to be monitored for compliance with program requirements, including both overt and covert
monitoring.
7. Be accountable for actions of employees in the provision of authorized foods and related activities.
8. Pay the State agency for any CVVs transacted in violation of this agreement.
9. Offer WIC participants, parent or caretakers of child participants or proxies the same courtesies as
other customers.
10. Comply with the nondiscrimination provisions of USDA regulations as provided in 7 CFR 248.7.
11. Notify the State agency if any farmers’ market ceases operation prior to the end of the authorization
period.

12.3

Monitoring Farmers and Farmers’ Markets

A farmer or farmers’ market that commits fraud or engages in other illegal activity is liable to
prosecution under applicable federal, State or local laws.
The State agency must:
•

•

Design and implement a system for monitoring its authorized farmers and farmers’ market for
compliance with program requirements.
o Note: Including authorized Farmers and Farmers’ Markets in the sample to be
monitored through the Farmers’ Market Nutrition Program (FMNP) is an acceptable
plan.
Document, at a minimum, the following information for all monitoring visits:
o
o
o

Name(s) of the farmer, farmers market, or roadside stand.
Name(s) and signature(s) of the reviewer(s); date of review.
Nature of problem(s) detected.

The State agency may disqualify a farmer or farmers’ market for Program abuse. The farmer or farmers’
market has the right to appeal a denial of an application to participate, a disqualification, or a Program
sanction by the State agency. However, the following may not be appealed:
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•
•

Expiration of an agreement with a farmer or farmers’ market.
Claims.

For compliance buys, the State agency must document all of the following:
•
•
•
•
•

•

The date of the buy.
A description of the farmer (and farmers’ market, if appropriate) involved in each transaction.
The types and quantities of items purchased.
Current retail prices or prices charged other customers.
Price charged for each item purchased, if available.
o Price information may be obtained prior to, during, or subsequent to the compliance
buy.
The final disposition of all items as destroyed, donated, provided to other authorities, or kept as
evidence.

See Handbook section 11.4 for information about Administrative Review for Farmers and Farmers’
Markets.

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Miscellaneous

13.1 Confidentiality of Vendor Information
Confidential vendor information is any information that individually identifies a vendor, except for the
types of information listed below. Information that meets this definition is confidential whether it is
obtained directly from the vendor or from another source. Confidentiality protection extends to all
vendors, whether they are currently authorized or not.
Vendor information that is not confidential:
•
•
•
•
•
•
•
•
•
•
•
•
•

Vendor’s name.
Vendor’s address.
Vendor’s phone number.
Vendor’s website.
Vendor’s email address.
Vendor’s store type.
Vendor’s authorization status.
Aggregate data that does not individually identify vendors.
Use of case studies by the State agency for participant or vendor training, as long as any
identifying information on individual vendors is altered or removed.
Vendor-specific data requested by the vendor about the vendor’s own operations.
Definitions used by the State agency for its peer groupings.
Aggregate data about the number of vendors in each peer group.
Aggregate or anonymous price information to demonstrate that the State agency correctly
applied its competitive price vendor selection criterion when it denied authorization to the
vendor applicant.
o If vendor-specific price information is requested by the hearing officer, the State agency
may provide such information to the hearing officer, who is permitted to view
confidential vendor information. FNS recommends that the State agency first seek legal
counsel from its General Counsel to determine what type of price information is
appropriate for presentation during administrative reviews.

Information that is confidential includes, but is not limited to:
•
•
•
•
•
•
•

Bank account information.
Medical history.
Personal correspondence.
Religious beliefs.
Peer group assignments (a vendor may only be given information on its own assignment).
Pricing information.
WIC redemption information.

The State agency must restrict the use or disclosure of confidential vendor information to:

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•

People directly connected with the administration or enforcement of the WIC Program or SNAP
that the State agency determines have a need to know the information for purposes of these
programs. This may include:
o Personnel from its local agencies.
o Personnel from other WIC State and local agencies.
o People who are investigating or prosecuting WIC or SNAP violations under federal,
State, or local law.
o Those directly connected with the administration or enforcement of any federal or State
law or local law or ordinance.
 Prior to releasing the information to one of these parties (other than a federal
agency), the State agency must enter into a written agreement with the
requesting party specifying that such information may not be used or redisclosed, except for purposes directly connected to the administration or
enforcement of a federal, or State law.
A vendor that is subject to an adverse action, including a claim, to the extent that the
confidential information is about the vendor subject to the adverse action and is related to the
adverse action.
The State agency must restrict the use or disclosure of information about SNAP retailers
obtained from SNAP, including information provided pursuant to Section 9(c) of the Food and
Nutrition Act of 2008 (7 U.S.C. 2018(c)) and 7 CFR 278.1(q), to persons directly connected with
the administration or enforcement of the WIC Program.
o Exceptions: Information that is not confidential may be shared. Information that is
confidential may be shared for administration or enforcement purposes, as described
above.
The State agency must provide the USDA and the Comptroller General of the United States
access to all WIC Program records, including confidential vendor information (see 7 CFR
246.25(a)(4) for more information).
At the discretion of the State agency, all authorized vendors and vendor applicants may be given
information regarding vendor sanctions that have been imposed.
o The State agency may disclose only the vendor’s name, address, length of the
disqualification or amount of the civil money penalty, and a summary of the reason(s)
for the sanction that are listed on the notice of adverse action.
o This information may be disclosed only when all administrative and judicial reviews have
been exhausted, and the sanction has been upheld.

The reason for limiting the use and disclosure of vendor information is to encourage vendors to provide
the information necessary to authorize and monitor vendors, to avoid sharing private vendor records
with their competitors, and to avoid compromising State agency investigative techniques.

13.1.1 Agreements
Written agreements between State or local agencies disclosing confidential information, and the public
organization that will receive the information, are required when confidential information is shared.
Exceptions: A written agreement is not required to share information with personnel of the State
agency’s local agencies or with other WIC State and local agencies. Agreements are also not required
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when information is disclosed to federal agencies responsible for administrative or enforcement
activities related to WIC or SNAP.
If the State agency plans to disclose confidential vendor information on a regular basis, the State agency
may enter into a single written agreement that generically covers the disclosure and use of confidential
vendor information for such activities. Individual agreements for each disclosure of information are not
necessary.

13.1.2 Conflicts with State Law
The State agency must adhere to all federal regulations and policy governing the Program, including
confidentiality requirements. Confidential vendor information may not be shared as a part of any
freedom of information, open records request, or similar.
If a State’s information/records laws conflict with WIC confidentiality requirements, the State agency
must take whatever steps are necessary to modify or obtain an exception from the law. In some cases,
there may not be a conflict because the State law already provides WIC an exception from the disclosure
requirement.

13.1.3 Subpoenas and Search Warrants
The State agency may disclose confidential vendor information pursuant to a valid subpoena or search
warrant in accordance with the following procedures:
Subpoena procedures:
In determining how to respond to a subpoena duces tecum (i.e., a subpoena for documents) or other
subpoena for confidential information, the State or local agency must use the following procedures:
1. Upon receiving the subpoena, the local agency must immediately notify the State agency.
2. Consult with legal counsel for the State or local agency and determine whether the information
requested is confidential and, therefore, prohibited from being used or disclosed as stated in the
subpoena.
3. If the State or local agency determines that the information is confidential and prohibited from
being used or disclosed as stated in the subpoena, it must attempt to quash the subpoena.
o Exception: Unless the State or local agency determines that disclosing the confidential
information is in the best interest of the Program.
o The determination to disclose confidential information without attempting to quash the
subpoena should be made infrequently.
o If the State or local agency seeks to quash the subpoena or decides that disclosing the
confidential information is in the best interest of the Program, it must inform the court
or the receiving party that this information is confidential and seek to limit the
disclosure by:
 Providing only the specific information requested in the subpoena, and no
further information.
 Limiting to the greatest extent possible the public access to the confidential
information disclosed.
Search warrant procedures:
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In responding to a search warrant for confidential information, the State or local agency must use the
following procedures:
1.
2.
3.
4.

13.2

Upon receiving the search warrant, the local agency must immediately notify the State agency.
Immediately notify legal counsel for the State or local agency.
Comply with the search warrant.
Inform the individual(s) serving the search warrant that the information being sought is
confidential and seek to limit the disclosure by:
o Providing only the specific information requested in the search warrant and no other
information.
o Limiting, to the greatest extent possible, public access to the confidential information
disclosed.

Recordkeeping Requirements

13.2.1 State Agency Records
Each State and local agency must maintain full and complete records concerning Program operations.
These records must comply with 2 CFR part 200 and the following requirements:
Records must include, but are not limited to, information related to:
•
•
•
•
•
•
•
•

Financial operations.
Food delivery methods.
Food instrument issuance and redemption.
Equipment purchases and inventory.
Certification.
Nutrition education, including breastfeeding promotion and support.
Civil rights.
Fair hearing procedures.

Retention schedules:
•
•

•

All records must be retained for a minimum of 3 years following the date of submission of the
final expenditure report for the period to which the report pertains.
If any litigation, claim, negotiation, audit or other action involving the records has been started
before the end of the 3 year period, the records must be kept until all issues are resolved, or
until the end of the regular 3 year period, whichever is later.
Records for nonexpendable property acquired in whole or in part with Program funds shall be
retained for 3 years after its final disposition.

All records must be available during normal business hours for representatives of FNS and the
Comptroller General of the United States to inspect, audit, and copy. Any reports or other documents
resulting from the examination of such records that are publicly released may not include confidential
applicant or participant information.
If FNS deems any Program records to be of historical interest, it may require the State or local agency to
forward those records to FNS whenever either agency is disposing of them.
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13.2.2 Vendor Records
In its Vendor Agreement (see Handbook section 4.1 for more information), the State agency must
require vendors to retain certain records and make them available to the WIC State agency, FNS, and
the Comptroller General of the United States, upon request.
These records include:
•
•
•

Inventory records used for federal tax reporting purposes.
All Program related records.
Any other records specified in the Vendor Agreement.

Food instruments and cash value vouchers in the vendor’s possession must also be provided to the
above listed parties, upon request.

13.3

The Integrity Profile (TIP)

The State agency must submit a summary of its vendor monitoring and investigations activities every
federal fiscal year. This summary must be submitted through TIP, which is an online tool managed by
FNS, by February 1 of the following fiscal year.

13.4

Conflict of Interest

The State agency must ensure that no conflict of interest exists—as defined by applicable State laws,
regulations, and policies—between the State agency and any vendor, farmer, farmers’ market, or home
delivery contractor, or between any local agency and any vendor, farmer, farmers’ market, or home
delivery contractor under its jurisdiction.

13.5

List of Infant Formula Providers

The State agency must notify vendors (through the vendor agreement and vendor training, at a
minimum) that they may only purchase infant formula from a source included on the State agency’s list
of infant formula providers (or from a source on another State agency’s list, if the State agency permits
this). This notification must also inform vendors that they may only provide infant formula to
participants with food instruments (FIs) that include that specific infant formula.
The State agency must provide the list of infant formula providers in writing or by other effective means
to all authorized retail vendors at least once per year. The list must include the names and addresses of
infant formula wholesalers, distributors, and retailers licensed* in the State in accordance with State
law, and infant formula manufacturers registered with the Food and Drug Administration (FDA) that
provide infant formula.
The State agency may not exclude a State-licensed entity from the list except when:
•
•

Specifically required or authorized by State law or regulations.
The entity does not carry infant formula.

*If more than one type of license applies, the State agency may choose which one to use.
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13.6

Complaints

The State agency must have procedures to document the handling of complaints by participants,
parents or caretakers of infant or child participants, proxies, vendors, farmers, farmers’ market, home
delivery contractors, and direct distribution contractors.

13.7 Reciprocal SNAP Disqualification for WIC Program
Disqualifications
Disqualification from the WIC Program may result in disqualification as a retailer in SNAP. This
disqualification is not subject to administrative or judicial review under SNAP. A statement must be
included on all notifications for any violations subject to mandatory federal sanctions (see Handbook
Chapter 9 for more information).

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13.8 Military Commissaries
FNS has a Memorandum of Understanding (MOU) with the Department of Defense regarding military
commissaries that are WIC Program vendors. Under the MOU, the State agency:
•
•

May not conduct on-site monitoring reviews, compliance investigations and routine monitoring
of commissaries unless “upon invitation by the constituted military authority.”
Is permitted to review FIs and CVVs submitted for redemption by commissary vendors before
payment.
o If there are errors or omissions, payment may be denied until justification or correction
is provided by the commissary.
o If the State agency identifies a potential problem, it should write to the commanding
officer of the installation and request: repayment, investigation, or other appropriate
action.
o The commanding officer or designee must take necessary action and promptly reply to
the State agency, including making repayment, if appropriate.
o If the State agency is not satisfied, it should refer the case to its FNS regional office.

The number of commissary vendors may be subtracted from the State agency’s total number of vendors
when calculating the 5 percent routine monitoring and compliance investigation requirements.
For more information and to view the MOU, see FNS Instruction 806-4R1: Food Delivery System: Military
Commissaries as WIC Program Vendors.

13.9 Suspension and Debarment Procedures
See WIC Policy Memorandum 2014-5: Reporting Permanently Disqualified WIC-Only/Authorized Store
Owners to the System for Award Management (SAM).

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FNS Monitoring and Review

14.1

Management Evaluations

FNS will assess each State agency through management evaluations (MEs). MEs will assess State
agencies’ adherence to Program rules and accomplishment of Program objectives. FNS will establish
standards and procedures to determine how well Program objectives are being accomplished by State
agencies, and will implement sanction procedures as warranted by State agencies’ performance.

14.2

Corrective Action Plans

The State agency must submit a corrective action plan, including implementation timeframes, within 60
days of receipt of an FNS management evaluation report containing a finding that the State agency did
not comply with Program requirements.
If FNS determines that the State agency has failed to demonstrate an efficient and effective
administration of its Program, or to comply with its corrective action plan, without good cause, FNS may
withhold up to 100 percent of the State agency’s nutrition services and administration funds for that
year.
The State agency may appeal sanctions imposed by FNS, in accordance with 7 CFR 246.22. Before
sanctions are carried out, these procedures must be followed:
•

•
•

•

FNS will notify the Chief State Health Officer or equivalent in writing of the deficiencies found
and of FNS’s intention to withhold nutrition services and administration funds unless an
acceptable corrective action plan is submitted by the State agency to FNS within 60 days after
mailing of notification.
The State agency must develop a corrective action plan with a schedule that specifies various
actions to correct the deficiencies and prevent future recurrence.
If the corrective action plan is acceptable, FNS will notify the Chief State Health Officer, or
equivalent, in writing within 30 days of receipt of the plan. The letter approving the corrective
action plan will:
o Describe the technical assistance that is available to the State agency to correct the
deficiencies.
o Advise the Chief State Health Officer or equivalent of the sanctions to be imposed if the
corrective action plan is not implemented according to the schedule set forth in the
approved plan.
After the State agency notifies FNS that corrective action has been taken, FNS will assess the
action, and, if necessary, will perform a follow-up review to determine if the noted deficiencies
have been corrected. FNS will then advise the State agency whether the actions taken were in
compliance with the corrective action plan, and whether the deficiency is resolved or if further
corrective action is needed.
If an acceptable, corrective action plan is not submitted within 60 days, FNS may withhold
nutrition services and administration funds through a reduction of the State agency’s Letter of
Credit or by assessing a claim against the State agency. FNS will notify the Chief State Health
Officer or equivalent of this action.
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•

14.3

If compliance with a corrective action is achieved before the end of the fiscal year in which the
funds are withheld, the funds shall be restored to the State agency’s Letter of Credit. FNS is not
required to restore funds withheld if compliance is delayed until the subsequent fiscal year. If
the 60 day warning period ends in the fourth quarter of a fiscal year, FNS may elect not to
withhold funds until the next fiscal year.

Claims against State Agencies

FNS may issue claims against WIC State agencies in accordance with federal regulations. The State
agency will have a full opportunity to submit evidence, explanation or information concerning alleged
instances of noncompliance or diversion before a final determination is made.

14.3.1 Fraud/Misuse
If FNS determines, through a review of the State agency’s reports, program or financial analysis,
monitoring, audit, or otherwise, that any Program funds provided to a State agency for supplemental
foods or nutrition services and administration (NSA) purposes were, through State or local agency
negligence or fraud, misused or otherwise diverted from Program purposes, a formal claim will be
assessed by FNS against the State agency.
The State agency must pay to FNS:
•

A sum equal to the amount of the NSA funds or the value of supplemental foods, food
instruments, or cash value vouchers misused, diverted, or lost.

The State agency has 30 days to either:
•
•

Pay the debt in full.
Contact FNS to reach a mutually acceptable repayment plan for the billed amount.

14.3.2 Loss/Theft/Embezzlement
If FNS determines that any part of the Program funds received by a State agency; or supplemental foods,
either purchased or donated commodities; or food instruments or cash value vouchers, were lost as a
result of theft, embezzlement, or unexplained causes, the State agency will, on demand by FNS, pay to
FNS a sum equal to the amount of the money or the value of the supplemental foods, food instruments,
or cash value vouchers lost.

14.3.3 Improper Disposition
FNS will establish a claim against any State agency that has not accounted for the disposition of all
redeemed FI and CVVs that cannot be matched against valid enrollment and issuance records, including
cases that may involve fraud, unless the State agency has demonstrated to the satisfaction of FNS that it
has made:
•
•

Every reasonable effort to comply with this requirement.
Identified the reasons for its inability to account for the disposition of each redeemed FI or cash
value voucher; and
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•

Provided assurance that it will take appropriate actions to improve its procedures.

14.3.4 Failure to Achieve Above-50-Percent Vendor Cost Neutrality
If FNS determines that a State agency has failed to ensure above-50-percent (A50) vendor cost
neutrality, it will establish a claim against the State agency to recover excess food funds expended and
will require remedial action.

14.3.5 Interest
If an agreement cannot be reached with the State agency for payment of its debts or to offset debts on
its current Letter of Credit within 30 days from the date of the first demand letter from FNS, FNS will
assess an interest (late) charge against the State agency.
Interest will begin to accrue on the 31st day after the date of the first demand letter, bill or claim.
Interest will be computed monthly on any unpaid balance as long as the debt exists. From non-federal
sources, the State agency must provide the funds necessary to maintain Program operations at the grant
level authorized by FNS.

14.3.6 Penalties
In accordance with the National School Lunch Act (42 U.S.C. 1786), anyone who embezzles, willfully
misapplies, steals or obtains by fraud any funds, assets or property provided under section 17 of the
Child Nutrition Act of 1966, as amended, whether received directly or indirectly from USDA, or whoever
receives, conceals or retains such funds, assets or property for his or her own interest, knowing such
funds, assets or property have been stolen, willfully misapplied or obtained by fraud will be fined up to
$25,000 or imprisoned up to 5 years, or both. If such funds are valued as less than $100, the responsible
party will be fined not more than $1,000 or imprisoned up to 1 year, or both.

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State Plan Requirements

The following State Plan requirements relate to Vendor Management, Food Delivery, and the State
agency Staffing Plan.
The State agency must provide a description of the food delivery method it operates, including:
EBT implementation: An outline of the State agency’s goals and objectives for improving Program
operations, to include EBT and/or EBT implementation.
Type of system/method: All food delivery systems/methods in use within the State agency’s
jurisdiction.
Vendor limiting and selection criteria: If used by the State agency and the vendor selection criteria
established by the State agency, consistent with 7 CFR 246.12(g)(3) and (g)(4).
A sample vendor, farmer and/or farmers’ market, if applicable, agreement: The sample vendor
agreement must include the sanction schedule, the process for notification of violations in accordance
with 7 CFR 246.12(l)(3), and the State agency’s policies and procedures on incentive items in accordance
with 7 CFR 246.12(g)(3)(iv), which may be incorporated as attachments or through citations to the
regulations if the sanction schedule, the process for notification of violations, or policies on incentive
items are in the State agency’s regulations. State agencies that intend to delegate signing of vendor,
farmer and/or farmers’ market agreements to local agencies must describe the State agency supervision
and instruction that will be provided to ensure the uniformity and quality of local agency activities.
Vendor monitoring: The system for monitoring vendors to ensure compliance and prevent fraud,
waste, and program noncompliance, and the State agency’s plans for improvement in the coming year in
accordance with 7 CFR 246.12(j). The State agency must also include the criteria it will use to determine
which vendors will receive routine monitoring visits. State agencies that intend to delegate any aspect of
vendor monitoring responsibilities to a local agency or contractor must describe the State agency
supervision and instruction that will be provided to ensure the uniformity and quality of vendor
monitoring.
Farmer monitoring: The system for monitoring farmers and farmer’s markets within its jurisdiction, for
compliance with Program requirements.
Options regarding trafficking convictions of vendors: The option exercised by the State to sanction
vendors.
Food instruments and cash value vouchers: A facsimile of the FI and cash value voucher, if used, and a
description of the system the State agency will use to account for the disposition of FI and cash value
vouchers.
Names of contractors: The names of companies, excluding authorized vendors, with whom the State
agency has contracted to participate in the operation of the food delivery method.
Food instrument and cash value voucher security: A description of the State agency’s system for
ensuring food instrument and cash value voucher security.
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Participant access determination criteria: A description of the State agency’s participant access
determination criteria consistent with 7 CFR 246.12(l)(8).
Mobile stores: The special needs necessitating the authorization of mobile stores, if the State agency
chooses to authorize such stores.
Vendor cost containment: A description of the State agency’s vendor peer group system, competitive
price criteria, and allowable reimbursement levels that demonstrates that the State agency is in
compliance with the cost containment provisions; information on non-profit A50 vendors that the State
agency has exempted from competitive price criteria and allowable reimbursement levels; a justification
and documentation supporting the State agency’s request for an exemption from the vendor peer group
requirement, if applicable; and, if the State agency authorizes A50 vendors, information required by FNS
to determine whether the State agency’s vendor cost containment system meets the stated
requirements.
List of infant formula wholesalers, distributors, and retailers: The State agency must provide a list in
writing or by other effective means to all authorized WIC retail vendors of the names and addresses of
infant formula wholesalers, distributors, and retailers licensed in the State in accordance with State law,
and infant formula manufacturers registered with the Food and Drug Administration (FDA) that provide
infant formula on at least an annual basis. The vendor may provide only the authorized infant formula,
which the vendor has obtained from a source included on the list, to participants in exchange for food
instruments specifying infant formula.
Replacement of EBT cards: A description of how the State agency will replace lost, stolen, or damaged
EBT cards and transfer the associated benefits within 7 business days.
EBT customer service standards: A description of the procedures established by the State agency to
provide customer service during nonbusiness hours that enable participants or proxies to report a lost,
stolen, or damaged card, report other card or benefit issues, receive information on the EBT food
balance and receive the current benefit end date. The procedures shall address how the State agency
will respond to reports of a lost, stolen, or damaged card within one business day of the date of report.
Vendor authorization for participant access: The State agency’s procedures for accepting and
processing vendor applications outside of its established timeframes, if the State agency determines
there otherwise will be inadequate participant access to the WIC Program.
Administrative appeal procedures: A copy of the State agency’s administrative appeal procedures for
local agencies, food vendors, farmers and farmers’ markets.
Until operating EBT statewide: The State agency will provide an outline of the EBT implementation
goals and objectives to demonstrate the State agency’s progress toward statewide EBT implementation.
If operating EBT statewide, the State agency will provide any information on future EBT changes and
procurement updates affecting present operations and other information the Secretary may require.
The State agency will be responsible for EBT coordination and management.

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Appendix A Glossary
Above-50-percent (A50) Vendors: Vendors that derive more than 50 percent of their annual food sales
revenue from Women, Infants, and Children (WIC) food instruments, and new vendor applicants
expected to meet this criterion under guidelines approved by the Food and Nutrition Services (FNS).
Authorized supplemental foods: Foods authorized by a State or local agency for issuance to a particular
participant. These foods are authorized to be obtained with a food instrument or cash value voucher.
Breastfeeding: Practice of feeding a mother’s breast milk to her infant(s) on average of at least once a
day.
Cash Value Voucher (CVV): Fixed dollar amount check, voucher, electronic benefit transfer (EBT) card
or other document, which is used by a participant to obtain authorized fruits and vegetables. This is also
known as cash value benefit (CVB) in an EBT environment.
Certification: Implementation of criteria and procedures to assess and document each applicant’s
eligibility for the Program.
Clinic: A facility where applicants are certified.
Compliance buy: Covert, onsite investigation in which a representative of the Program poses as a
participant, parent or caretaker of an infant or child participant, or proxy, transacts one or more food
instruments or cash value vouchers, and does not reveal during the visit that he or she is a program
representative.
Confidentiality of vendor information: Any information about a vendor (whether it is obtained from
the vendor or another source) that individually identifies the vendor, except for vendor’s name, address,
telephone number, website/email address, store type, and authorization status.
Contract brand infant formula: All of the milk-based infant formulas issued by a State agency that are
produced by the manufacturer that was awarded the milk-based contract are considered contract brand
infant formulas. Similarly, all of the soy-based infant formulas issued by a State agency that are
produced by the manufacturer that was awarded the soy-based contract are also considered to be
contract brand infant formulas. Contract brand infant formulas also include all infant formulas (except
exempt infant formulas) introduced after the contract is awarded.
Cost containment measure: Competitive bidding, rebate, direct distribution, or home delivery system
implemented by a State agency as described in its approved State Plan of operation and administration.
Days: Calendar days.
Department: The U.S. Department of Agriculture.
Discount: A benefit that provides Program foods to participants the amount of the price reduction or
other price concession provided by the manufacturer or supplier of the particular food product.
Disqualification: Disqualification refers to the act of ending the Program participation of a participant,
authorized food vendor, or authorized State or local agency, whether as a punitive sanction or for
administrative reasons.

Documentation: Documentation refers to vendor documents, which provide official information or
evidence or that serves as a record. Documentation helps to substantiate statements made by a vendor.
Educational Buy: An overt buy conducted for the educational benefit of the store and cashiers.
Electronic Benefit Transfer (EBT): Method that permits electronic access to WIC food benefits using a
card or other access device approved by FNS.
Electronic Benefit Transfer (EBT) Capable: A WIC vendor that demonstrates that its cash register
system or payment device can accurately and securely obtain WIC food balances associated with an EBT
card, maintain the necessary files such as the authorized product list, hot card file and claim file, and
successfully complete WIC EBT purchases.
Electronic signature: An electronic sound, symbol, or process, attached to or associated with an
application or other record and executed and or adopted by a person with the intent to sign the record.
Exempt infant formula: An infant formula that meets the requirements for an exempt infant formula
under section 412(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 350a(h)) and the regulations
at 21 CFR 106 and 107.
Farmer: An individual authorized by a State agency to sell eligible fruits and vegetables to participants
at a farmers’ market or roadside stand. Individuals, who exclusively sell produce grown by someone
else, such as wholesale distributors, cannot be authorized.
Farmers’ market: An association of local farmers who assemble at a defined location for the purpose of
selling their produce directly to consumers.
First date of use: The first date on which the food instrument or cash value voucher may be used to
obtain supplemental foods.
Fiscal year: The period of 12 calendar months beginning October 1 of any calendar year and ending
September 30 of the following calendar year.
Food and Nutrition Service (FNS) of the U.S. Department of Agriculture: FNS works to reduce hunger
and food insecurity through the administration of 15 federal nutrition assistance programs including
WIC, Supplemental Nutrition Assistance Program (SNAP), and school meals.
Food costs: Costs associated with supplemental foods.
Food delivery system/method: The method used by State and local agencies to provide supplemental
foods to participants. There are four types of food delivery systems/methods: Retail, Home Delivery,
Direct Distribution, and EBT.
Food Instrument: A voucher, check, electronic benefit transfer card (EBT), coupon or other document,
used by a participant to obtain supplemental foods.
Food sales: Sales of all Supplemental Nutrition Assistance Program (SNAP) eligible foods intended for
home preparation and consumption, including meat, fish, and poultry; bread and cereal products; dairy
products; fruits and vegetables. Food items such as condiments and spices, coffee, tea, cocoa, and
carbonated and noncarbonated drinks may be included in food sales when offered for sale along with

foods in the categories identified above. Food sales do not include sales of any items that cannot be
purchased with SNAP (also known as food stamps) benefits, such as hot foods or food that will be eaten
in the store.
Full nutrition benefit: The minimum amount of reconstituted fluid ounces of liquid concentrate infant
formula as specified in Table 1 of 7 CFR 246.10(e)(9) for each food package category and infant feeding
variation (e.g., Food Package IA fully formula fed, IA-FF).
High-risk vendor: A vendor identified as having a high probability of committing a vendor violation
through application of the criteria established in 7 CFR 246.12(j)(3) and any additional criteria
established by the State agency.
Home food delivery contractor: A sole proprietorship, partnership, cooperative association,
corporation, or other business entity that contracts with a State agency to deliver authorized
supplemental foods to the residences of participants under a home delivery system.
Infant formula: Refers to a food that meets the definition of an infant formula in section 201(z) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(z)) and that meets the requirements for an infant
formula under Section 412 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 350a) and the
regulations at 21 CFR 106 and 107. Other infant formula definitions include the following:
• Contract Brand Infant Formula: All infant formulas (except exempt infant formulas) produced by
the manufacturer awarded the infant formula cost containment contract;
• Exempt Infant Formula: An infant formula that meets the requirements for an exempt infant
formula under section 412(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 350a(h))
and the regulations at 21 CFR parts 106 and 107
• Non-contract Brand Infant Formula: All infant formula, including exempt infant formula that is
not covered by an infant formula cost containment contract awarded by that State agency; and
• Primary Contract Infant Formula: The specific infant formula for which manufacturers submit a
bid to a State.
Inventory audit: The examination of food invoices or other proofs of purchase to determine whether a
vendor has purchased sufficient quantities of supplemental foods to provide participants with the
quantities specified on food instruments redeemed by the vendor during a given period of time.
Last date of use: The date on which the food instrument (FI) or cash value voucher (CVV) may be used
to obtain authorized supplemental foods. This date must be a minimum of 30 days from the first date on
which it may be used, except for the participant’s first month of issuance, when it may be the end of the
month or cycle for which the FI or CVV is valid. All FI or CVV may be printed with a notice that the
participant must transact them within a specified number of days after the first date on which the food
instrument or cash value voucher may be used.
Local agency: (a) A public or private, nonprofit health or human service agency which provides health
services, either directly or through contract; (b) an Indian Health Service (IHS) service unit; (c) an Indian
tribe, band or group recognized by the Department of the Interior which operates a health clinic or is
provided health services by an IHS service unit; or (d) an intertribal council or group that is an authorized
representative of Indian tribes, bands or groups recognized by the Department of the Interior, which
operates a health clinic or is provided health services by an IHS service unit.

Nonprofit agency: A private agency that is exempt from income tax under the Internal Revenue Code of
1954, as amended.
Multi-function equipment: Point-of-sale equipment obtained by a WIC vendor through commercial
suppliers and capable of supporting WIC EBT and other payment tender types.
Partially redeemed food instrument (FI): An FI that is redeemed for less than all of the supplemental
foods authorized for that FI.
Participant access determination criteria: Criteria defined by the State agency used to assess whether
WIC participants have adequate access to WIC authorized vendors. To make this determination, the
State agency must consider the availability of other authorized vendors in the same area as a given
vendor/vendor applicant and take into account any geographic barriers to using such vendors.
Participants: Pregnant women, breastfeeding women, postpartum women, infants and children who
are receiving supplemental foods or food instruments or cash value vouchers under the Program, and
the breastfed infants of participant breastfeeding women.
Participant violation: Any deliberate action of a participant, parent or caretaker of an infant or child
participant, or proxy that violates federal or State statutes, regulations, policies, or procedures
governing the Program. Participant violations include, but are not limited to, deliberately making false or
misleading statements or deliberately misrepresenting, concealing, or withholding facts, to obtain
benefits; selling or offering to sell WIC benefits, including cash value vouchers, food instruments, EBT
cards, or supplemental foods in person, in print, or online; exchanging or attempting to exchange WIC
benefits, including cash value vouchers, food instruments, EBT cards, or supplemental foods for cash,
credit, services, non-food items, or unauthorized food items, including supplemental foods in excess of
those listed on the participant’s food instrument; threatening to harm or physically harming clinic,
farmer, or vendor staff; and dual participation.
Price adjustment: An adjustment made by the State agency, in accordance with the vendor agreement,
to the purchase price on a food instrument after it has been submitted by a vendor for redemption to
ensure that the payment to the vendor for the food instrument complies with the State agency’s price
limitations.
Program: The Special Supplemental Nutrition Program for Women, Infants and Children (WIC)
authorized by section 17 of the Child Nutrition Act of 1966, as amended.
Proxy: Any person designated by a woman participant, or by a parent or caretaker of an infant or child
participant, to obtain and transact FI or CVV or to obtain supplemental foods on behalf of a participant.
The proxy must be designated consistent with the State agency’s procedures. Parents or caretakers
applying on behalf of child and infant participants are not proxies.
Purchase price: The space used to enter the purchase price. With EBT, the purchase price is the sum of
the item prices of each food item in a purchase.
Redemption period: The date by which the vendor must submit the FI or CVV for redemption. This date
must be no more than 60 days from the first date on which the food instrument or cash value voucher
may be used. If the date is fewer than 60 days, then the State agency must ensure that the allotted time

provides the vendor sufficient time to submit the food instrument or cash value voucher for redemption
without undue burden.
Routine monitoring: Overt, on-site monitoring during which program representatives identify
themselves to vendor personnel.
Serial number: A unique and sequential serial number that appears on a food instrument.
Single-function equipment: Point-of-sale equipment, such as barcode scanners, card readers, PIN pads
and printers provided to an authorized WIC vendor solely for use with the WIC Program.
Sign or signature: A handwritten signature on paper or an electronic signature. If the State agency
chooses to use electronic signatures, the State agency must ensure the reliability and integrity of the
technology used and the security and confidentiality of electronic signatures collected in accordance
with sound management practices, and applicable federal law and policy, and the confidentiality
requirements.
The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC): Authorized by
section 17 of the Child Nutrition Act of 1966, 42 U.S.C. 1786, WIC provides federal grants to States.
These grants are used for supplemental foods, health care referrals, and nutrition education for lowincome pregnant, breastfeeding, and non-breastfeeding postpartum women, and to infants and children
up to age 5 who are found to be at nutritional risk.
Split tender transactions: Split tender transactions allow the participant, authorized representative or
proxy to pay the difference when a fruit and vegetable purchase exceeds the value of the cash value
vouchers.
State: Any of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin
Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands.
State agency: The health department or comparable agency of each State; an Indian tribe, band or
group recognized by the Department of the Interior; an intertribal council or group which is an
authorized representative of Indian tribes, bands or groups recognized by the Department of the
Interior and which has an ongoing relationship with such tribes, bands or groups for other purposes and
has contracted with them to administer the Program; or the appropriate area office of the IHS.
State Plan: A Program operation and administration that describes the strategy in which the State
agency intends to implement and operate all aspects of Program administration within its jurisdiction.
Statewide EBT: The stage in the EBT implementation process when the State agency has converted all
WIC clinics to an EBT delivery method and all authorized vendors are capable of transacting EBT
purchases.
Supplemental foods: Supplemental foods containing nutrients determined by nutritional research to be
lacking in the diets of pregnant, breastfeeding and postpartum women, infants, and children, and foods
that promote the health of the population served by the WIC Program as indicated by relevant nutrition
science, public health concerns, and cultural eating patterns.

Supplemental Nutrition Assistance Program (SNAP): The program authorized by the Food and
Nutrition Act of 2008 (7 U.S.C. 2011, et. seq.), in which eligible households receive benefits that can be
used to purchase food items from authorized retail stores and farmers’ markets.
Vendor: A sole proprietorship, partnership, cooperative association, corporation, or other business
entity operating one or more stores authorized by the State agency to provide authorized supplemental
foods to participants under a retail food delivery system. Each store operated by a business entity
constitutes a separate vendor and must be authorized separately from other stores operated by the
business entity. Each store must have a single, fixed location, except when the authorization of mobile
stores is necessary to meet the special needs described in the State agency’s State Plan.
Other vendor definitions include the following:
•
•
•

•

Vendor authorization: The process by which the State agency assesses, selects, and enters into
agreements with stores that apply or subsequently reapply to be authorized as vendors;
Vendor limiting criteria: Vendor limiting criteria means criteria established by the State agency
to determine the maximum number and distribution of vendors it authorizes.
Vendor overcharge: Occurs when a vendor intentionally or unintentionally charges a State
agency more for authorized supplemental foods than is permitted under the vendor agreement.
It is not a vendor overcharge when a vendor submits a food instrument for redemption and the
State agency makes a price adjustment to the food instrument.
Vendor peer group system: A classification of authorized vendors into groups based on
common characteristics or criteria that affect food prices, for the purpose of applying
appropriate competitive price criteria to vendors at authorization and limiting payments for
food to competitive levels.
Vendor Selection Criteria: Vendor selection criteria means the criteria established by the State
agency to select individual vendors for authorization consistent with the requirements in 7 CFR
246.12(g)(3) and (g)(4).
Vendor Violation: Vendor violation refers to any intentional or unintentional action of a
vendor’s current owners, officers, managers, agents, or employees (with or without the
knowledge of management) that violates the vendor agreement, or federal or State statutes,
regulations, policies, or procedures governing the Program.

Appendix B WIC Acronyms
A50

Above-50-Percent Vendor

APD

Advance Planning Document

CFR

Code of Federal Regulations

CMP

Civil Money Penalty

CPSC

Competitive Price Selection Criteria

CVV

Cash Value Voucher

CVB

Cash Value Benefit

Disqualification

EBT

Electronic Benefit Transfer

FDA

Food and Drug Administration

Food Instrument

FMNP

Farmers’ Market Nutrition Program

FNS

Food and Nutrition Service

HRV

High Risk Vendor

IHS

Indian Health Service

ITO

Indian Tribal Organization

MARL

Maximum Allowable Reimbursement Level

MOU

Memorandum of Understanding

MSR

Minimum Stocking Requirement

NSA

Nutrition Services and Administration

NUPC

National Universal Product Code

PAN

Primary Account Number

PAPD

Planning Advance Planning Document

POS

Point of Sale

SAM

System for Award Management

SNAP

Supplemental Nutrition Assistance Program

TIP

The Integrity Profile

USDA

United States Department of Agriculture

WIC

Special Supplemental Nutrition Program for Women, Infants and Children

Appendix C Selected Regulation Citations
Regulatory Citation
(7 CFR)
246.12(b)

246.12(a)

246.12)(h)(1)(ii);
246.12(i)(1);
246.12(j)(1)
246.12(c)
246.12(p)
246.12(q)
246.12(m)
246.12(n)
246.12(f-l)
246.7(f)(2)(iv)
246.12(f)
246.12(h)(3)(viii);
246.12(k)(5)
WPM 2014-3
246.12(a)
246.12(h)(3)(xxvii);
246.12(z)(2)
246.12(z)(3)(i);
246.12(aa)
246.12(aa)(3)(i)
246.12(aa)(3)(ii)
246.12(aa)(4)(i)
246.12(y)
246.12(bb)
246.12(bb)(3)
246.12(cc)
246.12(w)(2)
246.12(g)
246.12(g)(8)
246.12(g)(2)
246.12(g)(3)
246.12(g)(3)
246.12(g)(3)(i);
246.10(b)(2)(ii)(B)
246.12(g)(3)(ii)
246.12(g)(3)(iii)
246.12(g)(4)
246.12(g)(3)(iv);
WPM 2014-3
246.12(aa)(4)(ii)
246.12(g)(3)
246.12(g)(3)
246.12(h)
246.12(h)(3)
246.12(h)(4-8)

Content

Section

Food Delivery Methods
Management

2
2.1

Delegation of Vendor Management Related Activities

2.1.1

Issuance of Supplemental Foods, Food Instruments and Cash Value Vouchers
FI and CVV Security
FI and CVV Disposition
Home Delivery
Direct Distribution
Retail
Issuance of FIs and CVVs in Retail
Additional Requirements for FIs and CVVs in Retail

2.2
2.2.1.1
2.2.1.2
2.3
2.4
2.5
2.5.1
2.5.1.1

Redemption Procedures in Retail Food Delivery Systems

2.5.2

Vendor Discounts and Incentives
Electronic Benefit Transfer

2.5.3
2.6

EBT Minimum Lane Coverage

2.6.1

EBT Costs and Fees

2.6.2

Third-Party Processing Costs and Fees
Interchange Fees
Ongoing maintenance and operational costs
EBT Management and Reporting
EBT Technical Standards and Requirements
EBT Customer Service Standards
National Universal Product Code Database
Exemptions from the EBT Mandate
Vendor Authorization
General Vendor Application/Authorization Requirements
Limiting Criteria
Vendor Selection Criteria
Federally Mandated Selection Criteria

2.6.2.1
2.6.2.2
2.6.2.3
2.6.4
2.6.5.1
2.6.5.2
2.6.5.3
2.6.5.4
3
3.1
3.2
3.3
3.3.1

Minimum Variety and Quantity of Supplemental Foods

3.3.1.1

Business Integrity
Current SNAP Disqualification or Civil Money Penalty for Hardship
Competitive Price

3.3.1.2
3.3.1.3
3.3.1.4

Incentive Items

3.3.1.5

EBT Capability
State Agency Imposed Selection Criteria
Participant Access Considerations
Vendor Agreements
Vendor Agreement Provisions
Additional Agreement Requirements

3.3.1.6
3.3.2
3.3.3
4
4.1
4.2

Regulatory Citation
(7 CFR)
246.12(g)(3)(xvii)
246.12(i)
246.12(i)
246.4(a)(14)(xvi)
246.12(j)
246.12(j)
246.12(l)
246.12(l)(1-2)
246.12(l)(1)(ix)
246.4(a)(14)(xix);
246.12(l)(2)(i)
246.12(l)(3)
246.12(l)(1)
246.12(l)(1)(i)
246.12(l)(1)(ii)
246.12(l)(1)(iii)
246.12(l)(1)(iv)
246.12(l)(1)(v)
246.12(l)(1)(vi)
246.12(l)(1)(vii)
246.12(l)(2)
246.12(l)(1)(x)
246.12(l)(1)(x)
246.12(u)
246.12(k)
246.18
246.18(a)(1)(i)
246.18(a)(1)(ii)
246.18(a)(1)(iii)
246.12(v)(6)
246. 18(a)(4)(ii)
246.18(b)(1)
246.12(l)(3)
246.12(l)(1)(xi)
246.18(b)
246.18(c )
246.12(v)
246.12(v)
246.12(v)(1)
246.12(v)(1)
246.12(v)(8)
246.26
246.26(e)
246.26(h)(3)
246.26 (i)
246.25
246.25
246.12(h)(3)(xvi)

Content

Section

Terminating Vendor Agreements
Vendor Training
Interactive Training
Vendor Cost Containment
High Risk Vendor Identification System
Monitoring & Investigations
SANCTIONS
Vendor Sanctions
Participant Access Determination

4.3
5
5.1
6
7
8
9
9.1
9.1.1

Pattern of Violations

9.1.2

Notification of Violations
Mandatory Federal Vendor Sanctions
Permanent disqualification
Six year disqualification
Three year disqualification
One year disqualification
Second mandatory sanction
Third or subsequent mandatory sanction
Disqualification based on a SNAP disqualification or CMP for hardship
State Agency Vendor Sanctions
Civil Money Penalties
Calculating a CMP
Participant Sanctions
Vendor Claims
Administrative Review
Adverse Actions Subject to Full Administrative Review
Adverse Actions Subject to Abbreviated Administrative Review
Actions Not Subject to Review
Farmers and Farmers’ Markets
Administrative Review Procedures
Notification of Adverse Action
Notification to Vendors
Notification to FNS
Full Administrative Review Procedures
Abbreviated Administrative Review Procedures
Farmers And Farmers’ Markets
Authorization of Farmers and Farmers’ Markets
Farmer and Farmers’ Market Agreements
Farmer and Farmers’ Market Agreement Provisions
Monitoring Farmers and Farmers’ Markets
Miscellaneous
Confidentiality of Vendor Information
Agreements
Subpoenas and Search Warrants
Recordkeeping Requirements
State Agency Records
Vendor Records

9.1.3
9.1.4
9.1.4.1
9.1.4.2
9.1.4.3
9.1.4.4
9.1.4.5
9.1.4.6
9.1.4.7
9.1.5
9.1.6
9.1.6.1
9.2
10
11
11.1
11.2
11.3
11.4
11.5
11.5.1
11.5.1.1
11.5.1.2
11.5.2
11.5.3
12
12.1
12.2
12.2.1
12.3
13
13.1
13.1.1
13.1.3
13.2
13.2.1
13.2.2

Regulatory Citation
(7 CFR)

Content

Section

246.12(h)(3) (xx)
246.12(g)(10)
246.12(o)
246.12(h)(3)(xxvi)
FNS Instruction 806-4
246.3(b); WPM 2014-5
246.19
246.19(a)(1)
246.19(a)(2)
246.23(a)
246.23(a)
246.23(a)(2)
246.23(a)(4)
246.12(g)(4)(i)(D)
246.23(b)
246.23(d)
246.4

Conflict of Interest
List of Infant Formula Providers
Complaints
Reciprocal SNAP Disqualification for WIC Program Disqualifications
Military Commissaries
Suspension and Debarment Procedures
FNS Monitoring And Review
Management Evaluations
Corrective Action Plans
Claims against State Agencies
Fraud/Misuse
Loss/Theft/Embezzlement
Improper Disposition
Failure to Achieve Above-50-Percent Vendor Cost Neutrality
Interest
Penalties
State Plan Requirements

13.4
13.5
13.6
13.7
13.8
13.9
14
14.1
14.2
14.3
14.3.1
14.3.2
14.3.3
14.3.4
14.3.5
14.3.6
15

Appendix D Selected WIC Policy Memoranda

United States
Department of
Agriculture
Food and
Nutrition
Service
3101 Park
Center Drive
Alexandria, VA
22302-1500

February 7, 2014
SUBJECT:

WIC Policy Memorandum #2014-3
Vendor Management: Incentive Items, Vendor Discounts and Coupons

TO:

Special Nutrition Program Directors
All Regions
WIC State Agency Directors
All State Agencies

I. Introduction
The purpose of this memorandum is to provide comprehensive guidance to Special
Supplemental Nutrition Program for Women, Infants and Children (WIC) State agencies
regarding WIC-authorized vendors’ in-store promotions. Approaches to marketing and instore promotions that have been embraced by vendors must be carefully managed in order to
ensure that the WIC Program continues to achieve the highest possible level of program
integrity. For the purpose of this memorandum, in-store promotions include the provision of
incentive items, as well as the use of vendor discounts and coupons. This guidance
represents a compilation of relevant WIC regulatory provisions, previously-issued policy and
guidance, and clarifications on aspects of these policies that have prompted recent questions.
This memorandum supersedes the following WIC memoranda:
• WIC Policy Memorandum 2012-3: Vendors Offering Incentive Items to WIC
Participants
• WIC Policy Memorandum dated May 22, 1990: Sales Tax on Manufacturer’s
Discount Coupons
• WIC Policy Memorandum dated June 6, 1988: Use of Manufacturers’ Specials When
Purchasing WIC Foods

II. Definitions
Definitions of terms that are used throughout this memorandum are provided below.
Above-50-percent (A50) vendor: a vendor that derives more than 50 percent of its total
annual food sales revenue from WIC food instruments, and new vendor applicants expected
to meet this criterion under guidelines approved by the Food and Nutrition Service (FNS)
Coupon: a digital or printed voucher that allows a customer to receive a product at a reduced
price or at a higher quantity; coupons may be provided to customers by vendors,
manufacturers or other entities

Regional and State Directors
Page 2

In-store promotion: a sales promotion in which a vendor may offer incentive items, vendor
discounts or coupons in order to increase sales of certain items or to encourage customer
loyalty to the vendor
Incentive item: an item or service provided by a vendor to attract customers or encourage
customer loyalty
Mixed basket transaction: a WIC electronic benefits transfer (EBT) transaction that includes
WIC and non-WIC items and, therefore, requires more than one tender type; see attachment
for information pertaining specifically to discounts in mixed basket transactions
Regular (non-A50) vendor: a vendor that does not derive more than 50 percent of its total
annual food sales revenue from WIC food instruments; a vendor that is not an above-50percent vendor
Vendor discount: an in-store promotion that reduces the price or increases the quantity of a
given product; a vendor discount could also result from the use of a coupon

III. Equitable Treatment
Section 246.12(h)(3)(iii) of the Federal WIC Regulations requires WIC-authorized vendors
to offer WIC Program participants, parents or caretakers of infant and child participants, and
proxies the same courtesies that are offered to other (non-WIC) customers.
WIC-authorized vendors may not treat WIC customers differently from non-WIC customers
by excluding them from in-store promotions—this includes disallowing the use of coupons or
other vendor discounts in WIC transactions that are allowed in non-WIC transactions.
Similarly, WIC-authorized vendors may not treat WIC customers differently by offering
them incentive items, vendor discounts, coupons or other promotions that are not offered to
non-WIC customers.
Failure to provide the same courtesies to WIC participants, as outlined above, is a violation
of Federal WIC Regulations, thereby constituting a vendor violation. State agencies should
ensure that WIC-authorized vendors are aware of this requirement and should include a
provision outlining the requirement for equitable treatment of WIC participants in their
vendor agreements. The consequences of noncompliance with this requirement should be
included in State agencies’ sanction schedules, as applicable.

IV. In-Store Promotions and Regular (Non-A50) Vendors
As stated in the “Equitable Treatment” section of this memorandum, the Federal WIC
Regulations require that WIC-authorized vendors treat program participants with the same

Regional and State Directors
Page 3

courtesies as other customers with respect to both food prices and services. Allowing
participants to take advantage of in-store promotions, such as those outlined below in the
“Vendor Discounts by Type” section of this memorandum, is consistent with this policy.
Additionally, allowing WIC participants to use vendor discounts in WIC purchases reinforces
wise food purchasing practices, which is a goal of WIC nutrition education. Many State
agencies have encouraged the use of coupons and other vendor discounts through their
nutrition education programs in order to reach this goal and/or to reduce Program costs.
State agencies should ensure that participants are well-informed about the use of different
types of in-store promotions and coupons so that both participants and the WIC Program are
able to achieve the maximum benefit from such offers. State agencies should also ensure that
both participants and vendors understand the temporary nature of some offers in order to
reduce confusion at the point of sale.
Additional information regarding in-store promotions and regular vendors is outlined in the
sections below.
A) Vendor Discounts by Type
Vendor discounts generally provide either a greater quantity (quantity discount) of, or
a lower price (price discount) for, a food item. To be consistent with WIC’s equitable
treatment policy, State agencies should have policies in place that allow for the use of
in-store promotions as well as manufacturers’ coupons.
The most common types of vendor discounts are described below. WIC State
agencies that are in the process of developing EBT systems can find technical
information regarding these vendor discounts in the EBT/MIS section of the FNS
WIC website, specifically in section 4.7.5 of the WIC EBT Operating Rules.
1) Buy One, Get One Free (BOGO)
In this promotion, the WIC-authorized vendor sells one WIC food item
and provides a second identical food item or a different item at no
additional cost. For example, a vendor offers a free box of cereal with
each box of cereal that is purchased. This is a quantity discount. Using a
buy one, get one free promotion allows WIC participants to get additional
quantities of WIC foods or non-WIC items at no cost. If the free item in a
buy one, get one free promotion is a WIC food item, it should not be
deducted from the participant’s WIC benefits.
2) Buy One, Get One at a Reduced Price
In this promotion, the WIC vendor sells one WIC food item at full price
and sells either a second identical WIC food item or a different food item

Regional and State Directors
Page 4

at a reduced price. For example, a vendor offers a half price box of cereal
with each box of cereal that is purchased at regular price. A buy one, get
one at a reduced price promotion is a price discount. In a transaction that
only includes WIC items, this discount type only applies when the second,
reduced price item is a WIC food item and the participant has the item in
his or her benefits balance. In this case, the WIC Program would benefit
from this vendor discount by being charged the lower price for the second
box of cereal.
3) Free Ounces Added to Food Item by Manufacturer (Bonus Size Items)
In this promotion, a food manufacturer adds extra ounces to a product at
no extra cost to the consumer. For example, instead of offering 16 ounces
of cereal in a box, a manufacturer may temporarily offer a bonus size 18
ounce box of cereal at the same price. This promotion is a quantity
discount. When a bonus size food item is purchased by a WIC participant,
the vendor should redeem the WIC food instrument as if the original size
(16 ounce) item were purchased. In order to take advantage of this type of
discount, State agencies will need to employ a system of communication
with food manufacturers regarding universal product codes (UPCs) for
bonus size WIC-approved items.
4) Transaction Discounts
In this type of promotion, the WIC vendor applies a fixed amount discount
or a discount percentage to the total dollar amount of the purchase. For
example, the offer may be for $10 off or 10% off when $50 or more in
groceries are purchased. A transaction discount is a price discount on the
total purchase. In a transaction that only includes WIC items, the Program
would benefit from the vendor discount being applied to the transaction.
5) Store Loyalty/Rewards Cards
WIC-authorized vendors may provide a card or token that provides
additional vendor discounts for frequent or regular customers. WIC
participants are not required to use loyalty/rewards cards, nor are WICauthorized vendors required to scan a “dummy” card for WIC participants
who do not have their own cards. Store loyalty/rewards cards may
provide a variety of quantity and/or price discounts. These vendor
discounts should be processed by vendors as outlined above, according to
type.
6) Manufacturers’ Cents Off Coupons
Manufacturers’ cents off coupons allow customers to purchase certain
items at a lower price. For example, a coupon may offer a price discount

Regional and State Directors
Page 5

of 50 cents off a box of cereal. In a transaction that only includes WIC
items, the value of the coupon would be applied to the WIC transaction,
thus benefiting the Program.
NOTE: Vendor Discounts in a Mixed Basket Transaction
All of the discounts above may be applied to mixed basket purchases, as
long as they are applied in accordance with the rules for processing mixed
basket transactions that can be found in the WIC EBT Operating Rules.
See attachment for examples of the application of discounts in mixed
basket transactions.
B) Sales Tax on Manufacturers’ Coupons
Pursuant to the Child Nutrition Act at 42 U.S.C.1786(c)(4), State agencies are
prohibited from collecting sales taxes on WIC foods. However, some States collect
sales tax on manufacturers’ coupons. In some cases, this tax only applies to
manufacturers’ coupons that are used on taxable items and does not, therefore, apply
to coupons used for WIC-authorized foods in a WIC transaction. Other States have
exempted WIC purchases from the collection of sales tax on manufacturers’ coupons
through legislation or policy clarification. It is important to remember that
manufacturers’ coupons are not a WIC benefit; therefore, States are not prohibited
from collecting sales tax on them. If a WIC participant uses a coupon when
purchasing a WIC food item, sales tax may be collected on the value of the coupon
tendered, but must not be collected on the actual WIC food item or paid for by the
WIC participant or the WIC Program via the WIC food instrument.
If sales tax must be collected on a manufacturer’s coupon in a WIC transaction, the
following procedure must be used in order to prevent the Program or participant from
being taxed:
1) Subtract the sales tax on the coupon from the face value of the coupon
2) Subtract the remainder of the coupon value from the retail price of the
WIC-authorized food
Using this process, the sales tax is effectively paid by the coupon itself. For example,
if sales tax on manufacturers’ coupons is 5% and a participant presents a coupon for
$1.00 off a WIC-authorized food that costs $3.00, the transaction would be processed
as follows:
1) Sales tax subtracted from face value of coupon: $1.00 - $0.05 = $0.95
2) Remainder of coupon value subtracted from retail price of food item:
$3.00 - $0.95 = $2.05

Regional and State Directors
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In this example, the WIC Program would be charged $2.05 for the food item.
C) Cash Back
Cash back is not permitted as a result of vendor discounts in any WIC transaction. In
a transaction that only includes WIC items, all vendor discounts, including
manufacturers’ coupons, must be applied to the WIC transaction, thus benefiting the
Program. In a mixed-basket transaction, vendor discounts must follow the procedures
described in the WIC EBT Operating Rules; depending on the specifics of the
transaction, the participant, the Program or both would benefit from the vendor
discounts, but cash back may not be given to the participant.

V. In-Store Promotions and Above-50-Percent (A50) Vendors
State agencies that choose to authorize above-50-percent vendors must prohibit A50s from
offering incentive items or restrict the provision of incentive items to certain types and
quantities of items.
Section 246.12(g)(3)(iv) of the Federal WIC regulations prohibits a State agency from
authorizing or making payments to an A50 vendor that provides prohibited incentive items.
Sections 246.12(g)(3)(iv)(A) and (B) list allowable and prohibited incentive items for A50
vendors. Additionally, WIC Policy Memorandum 2005-1, Implementation of Certain WIC
Vendor Provisions of P.L. 108-265, which is available in the Policy section of the FNS WIC
website, provides an in-depth discussion of the regulatory requirements regarding incentive
items and A50 vendors.
To summarize these regulatory requirements, WIC State agencies may approve incentive
items—including food, merchandise or services—that the vendor obtained at no cost or that
cost the vendor less than $2. The vendor may also provide food sales or specials (vendor
discounts) that involve no cost or less than $2 in cost to the vendor. This includes bonus size
food items that were obtained from the manufacturer at no cost to the vendor, as well as any
of the other types of vendor discounts explained in Section IV of this memorandum, as long
as the cost to the vendor of providing these vendor discounts is less than $2. State agencies
may not approve incentive items, including food, merchandise or services that are worth
more than $2, or food sales or specials (vendor discounts) that cost the vendor more than $2.
A50 vendors may not provide multiple incentive items or vendor discounts to customers per
visit unless the cumulative value of these items is less than $2. Additionally, A50 vendors
may not provide services that result in a conflict of interest (such as assistance applying for
WIC benefits), lottery tickets, cash, or any item that incurs a liability for the WIC Program or
violates any Federal, State or local law or regulation.
If a State agency allows A50 vendors to provide incentive items to customers, it must provide
written approval or disapproval of requests for permission to provide allowable incentive

Regional and State Directors
Page 7

items to customers. The State agency must maintain documentation of the approval process,
including invoices or similar documents collected from vendors that show that each approved
incentive item was either obtained at no cost or at a cost of less than $2. In order to reduce
the administrative burden of this process, the State agency may provide A50 vendors with a
list of pre-approved incentive items at the time of authorization.
WIC State agencies may not authorize, continue the authorization of, or make payments to,
an A50 vendor that provides or indicates an intention to provide prohibited incentive items to
customers. Evidence of such intent includes advertising the availability of prohibited
incentive items. If a vendor shows a pattern of providing prohibited incentive items, the
State agency should impose the mandatory vendor sanction for this violation: a one-year
disqualification in accordance with 7 CFR 246.12(l)(1)(iv).

VI. Conclusion
WIC State agencies must ensure compliance with WIC Program requirements for authorized
vendors relating to in-store promotions, including incentive items, vendor discounts, and
coupons. These requirements should be clearly outlined in each State agency’s vendor
agreement, vendor handbook, policy and procedure manual, and vendor training materials.
If you have any questions about the information contained in this memorandum, please
contact your FNS Regional Office.

DEBRA R. WHITFORD
Director
Supplemental Food Programs Division
Attachment

ATTACHMENT: Discounts and Coupons in Mixed Basket Transactions
WIC Policy Memorandum #2014-3
Vendor Management: Incentive Items, Vendor Discounts and Coupons

In a mixed basket transaction, WIC and non-WIC items are scanned together in one
transaction and paid for by the participant using multiple tender types. For example, a mixed
basket transaction might include WIC eligible food items, SNAP-eligible food items, and
items that are not WIC or SNAP eligible, such as diapers. In a scenario like this, the
vendor’s computer system would process the transaction, identifying and grouping each of
the items by their payment type. If a vendor discount is applicable, the vendor’s computer
system would then use the rules set forth in the WIC EBT Operating Rules to apply the
discount to the appropriate item or items.
For example, a WIC participant brings a box of WIC-eligible infant cereal, a package of
SNAP-eligible ground turkey, and a box of diapers to the register to purchase.
The participant’s totals for this example (with no applicable discounts) are as follows:
WIC-eligible infant cereal: $3 = Total charged to WIC
SNAP-eligible ground turkey: $5 = Total charged to SNAP
Box of diapers: $14 = Total charged to participant (cash)
Below are examples of how certain discount types would be processed in the example above.
Buy One, Get One at a Reduced Price
If the vendor has a buy one, get one at a reduced price special on the WIC-eligible infant
cereal (second box is $1) and the participant brings a second box of the cereal to the register
to purchase, the transaction will be processed as follows:
If the participant has two boxes of cereal on her WIC EBT card,
WIC-eligible infant cereal: $3 = Charged to WIC
WIC-eligible infant cereal: $1 = Charged to WIC
SNAP-eligible ground turkey: $5 = Total charged to SNAP
Box of diapers: $14 = Total charged to participant (cash)
If the participant has only one box of cereal on her WIC EBT card,
WIC-eligible infant cereal: $3 = Total charged to WIC
WIC-eligible infant cereal: $1 = Charged to SNAP
SNAP-eligible ground turkey: $5 = Charged to SNAP
Box of diapers: $14 = Total charged to participant (cash)
In the first scenario above, the WIC Program saves $2 on the participant’s second box of
cereal. In the second scenario, WIC pays the regular price for the first box of cereal and the
participant saves $2 on the second box of cereal by using only $1 of her SNAP benefits. If
the participant is out of SNAP benefits, the second box of cereal moves to her cash purchase
and she pays $1. It should be noted that, if the participant prefers that the second/reduced

price item not be deducted from her WIC benefits, the vendor must allow for the item to be
moved into her SNAP or cash purchase.
Transaction Discounts
Unlike most of the other discount types, transaction discounts are not linked to a particular
item or items, but instead apply to the entire purchase price. The recommended procedure
for processing a transaction discount is outlined below.
If the vendor offers a transaction discount to buy $10 worth of groceries, get 10% off, for
example, the transaction would be processed as follows:
WIC-eligible infant cereal: $3 - $.30 (10% discount) = $2.70 = Total charged to WIC
WIC CVB-eligible apples: $3 - $.30 (10% discount) = $2.70 = Total charged to WIC
CVB
SNAP-eligible ground turkey: $5 - $.50 (10% discount) = $4.50 = Total charged to
SNAP
Box of diapers: $14 – $1.40 (10% discount) = $12.60 = Total charged to participant
(cash)
In this scenario, the 10% discount is applied proportionally across the transaction. In this
$25 purchase, a discount of $2.50 was applied such that the WIC Program saved $.30 cents
on the infant cereal, the participant retained the $.30 discount in her CVB for future fruit and
vegetable purchases, the participant retained the $.50 discount in her SNAP benefits for
future purchases, and she saved $1.40 on her cash purchase of diapers.
Manufacturers’ Cents Off Coupons
If the participant presents a coupon for two dollars off a diaper purchase, the coupon is
applied to the diapers and the participant, rather than the WIC Program or SNAP, would
benefit by saving $2 on her cash purchase. If that same participant presented a one dollar off
coupon for her WIC-eligible infant cereal, that coupon would be applied to the infant cereal
being paid for with WIC EBT, and the WIC Program would benefit by being charged $1 less
for the infant cereal.
After presenting coupons for diapers and infant cereal, the participant’s totals are as follows:
WIC-eligible infant cereal: $3 - $1 (coupon) = $2 = Total charged to WIC
SNAP-eligible ground turkey: $5 = Total charged to SNAP
Box of diapers: $14 - $2 (coupon) = $12 = Total charged to participant (cash)

FNS INSTRUCTION 806-4
REV. 1
EXHIBIT A

INTERAGENCY AGREEMENT

U.S. DEPARTMENT OF AGRICULTURE
FOOD AND NUTRITION SERVICE
SPECIAL NUTRITION PROGRAMS

U.S. DEPARTMENT OF DEFENSE
OFFICE OF THE DEPUTY ASSISTANT
SECRETARY (MP&FM), PERSONNEL
ADMINISTRATION AND SERVICES
DIRECTORATE

MEMORANDUM OF UNDERSTANDING
Military Commissaries as WIC Program Vendors
It is the joint policy of the Department of Agriculture and the Department of
Defense to foster cooperation between State agencies administering the Special
Supplemental Food Program for Women, Infants and Children (WIC) and military
commissaries which may act as authorized WIC food vendors. The WIC Program
serves to improve the health and nutritional status of pregnant, breastfeeding and
postpartum women, infants and children under 5 years old, through provision of
supplemental foods and nutrition education. Commissaries serve the purchase needs
of active and retired military personnel and their dependents. Insofar as military
personnel or their dependents may participate in the WIC Program, it is appropriate
for commissaries to serve as WIC Program food vendors.
The purpose of this memorandum of understanding is to outline the basic
responsibilities of WIC State agencies or their designated local agencies (hereafter
referred to as State agencies) and military commissaries which have been authorized
to be WIC food vendors.
1.
In order to be an authorized WIC food vendor, the commissary shall fulfill State
criteria for authorization and shall sign an agreement or contract with the State or
local agency.
2.
The State WIC-agency shall agree that commissaries shall be reimbursed for the
provision of authorized supplemental foods to participants, based on the standard
commissary price system of procurement costs plus a percentage surcharge. The
State agency shall further agree that commissaries are only obliged to serve active or
retired military personnel and their dependents.
3.
The State agency shall provide the commissary a List of approved WIC
supplemental foods. The State agency may not direct the commissary to carry a
specific brand of merchandise, if that product does not fall within the items
authorized for sale in commissaries or if the commissary carries an equivalent
product from the approved list of WIC foods.

Page 1
12-2-88

FNS INSTRUCTION 806-4
REV. 1
EXHIBIT A

4.
The commissary shall comply with applicable Federal regulations and State
agency guidelines for WIC food vendors, such as: provision of supplemental foods
to participants, completion and submission of food instruments (also called WIC
checks, vouchers, coupons or drafts), acceptance of WIC vendor training within
funding/personnel constraints, and other State agency guidelines agreed to by the
appropriate commissary headquarters except those excluded in item (5) below. The
commissary shall not discriminate on the basis of race, color, national origin, sex,
age or handicap.
5.
In view of Federal immunity from State claims or review, the State agency may
not conduct on-site monitoring reviews of commissaries (except upon invitation by
the constituted military authority) or require claims to be paid. However, a State
agency may review redeemed food instruments prior to payment. If the food
instruments are found to contain errors or omissions, payment may be denied unless
or until further justification or correction is provided by the submitting commissary.
If the State agency identifies a possible problem, it shall write the commanding
officer of the installation requesting repayment, investigation, or other appropriate
action. The commanding officer of the installation or his designee shall take
necessary action and promptly reply to the State agency, including repayment if
appropriate.
6.
If the State agency wishes to further pursue problem resolution, it shah refer
the case to the Food and Nutrition Service (FNS), U.S. Department of Agriculture.
FNS, in conjunction with the Department of Defense, may conduct on-site
monitoring reviews and submit claims to commissaries for the WIC Program.
7.
State agencies are authorized to use the general guidelines above in writing
agreements with commissaries, based on Section 246.12(f) of WIC Regulations.
Authority: Section 17 of the Child Nutrition Act of 1966, as amended (42 U.S.C.
1786); WIC Program Regulations (7 CFR Part 246).

Page 2
12-2-88

March 19, 2014
United States
Department of
Agriculture

SUBJECT:

WIC Policy Memo #2014 – 5
Reporting Permanently Disqualified WIC-Only Authorized Store Owners to
the System for Award Management (SAM)

TO:

Regional Directors
Special Nutrition Programs
All Regions

Food and
Nutrition
Service
3101 Park
Center Drive
Alexandria, VA
22302-1500

WIC State Agency Directors
All Regions
The purpose of this memorandum is to inform WIC State agencies of a new requirement to
notify the Food and Nutrition Service (FNS) when they permanently disqualify a WIC-only
authorized store owner. Executive Order 12549, Debarment and Suspension, and
Departmental Regulations at 2 CFR 417, Nonprocurement Debarment and Suspension,
require FNS to conduct business only with responsible persons and entities and to alert other
Federal agencies of program violators through a government-wide system, the System for
Award Management (SAM). The General Services Administration Excluded Parties List
System migrated to SAM, effective July 2012. FNS and other Federal agencies protect
themselves from doing business with those individuals who would commit fraud and other
unethical business practices by checking the SAM as they award future loans, contracts,
grants and other program benefits.
The Supplemental Nutrition Assistance Program (SNAP) and WIC Program have reciprocal
disqualification requirements for retail store owners authorized by both SNAP and WIC.
SNAP is already using SAM to notify appropriate FNS staff and other government agencies
when these store owners are permanently disqualified from the Programs. However, to
complete FNS’ reporting requirement, the WIC Program must now enter permanently
disqualified WIC-only authorized store owners into SAM.
Please use the attached memorandum template to inform FNS of WIC-only authorized store
owner(s) your State agency has permanently disqualified during the preceding quarter. FNS
WIC Program staff will enter the information into SAM. Notices are due to FNS each
quarter not later than 30 days following the end of each quarter.
Please contact your respective Regional Office if you have any questions concerning this
requirement.

DEBRA R. WHITFORD
Director
Supplemental Food Programs Division
Attachment

Attachment
SAM Memorandum Template
TO:

Director
Supplemental Food Programs Division
Food and Nutrition Service, USDA
3101 Park Center Drive, Room 520
Alexandria, VA 22302

FROM:

WIC State Agency

DATE:
SUBJECT:

Permanent Disqualification of WIC-Only Retail Store Owner

The following retail store owner(s)/store(s) are permanently disqualified. The required
information follows:
Name and Address:

Complete name and address of retail store owner and store.

Reason for DQ:

Description of the cause for permanent disqualification.

Active Date:

The effective date of the disqualification.

Please add the referenced information regarding the retail store owner into the SAM. If you
have any questions regarding this action, please contact agency POC at contact information.

Appendix E WIC Vendor Management Tip Sheets {Redacted}

File Type	application/pdf
File Title	WIC Vendor Management and Food Delivery Handbook
Author	User
File Modified	2020-08-26
File Created	2017-10-11