BY JENNIFER JACOBS
REGISTER STAFF WRITER

Every time a grocery shopper uses a food stamp debit card in an Iowa supermarket, the state’s taxpayers fork over more money for the transaction than anywhere else in the country.

“It’s a waste of tax dollars,” said Roger Munns, a spokesman for the state Department of Human Services, which has been trying to persuade lawmakers to end the practice for four years.

Only six states pay grocers anything for the service. Iowans pay the most: 7 cents per swipe.

Three Democratic leaders in the Iowa Statehouse said they either weren’t familiar with what DHS calls the “grocer subsidy,” or have never been personally approached about ending it.

A fourth, Michael Gronstal, the majority leader in the state Senate, said Thursday he isn’t in favor of getting rid of the fee.

Retailers let customers use their bank debit cards and credit cards for free, and recover their costs with the price of groceries. Food stamp users are the only ones charged a fee, and the bill goes to the government, said Kevin Concannon, DHS director.

Half of the bill, about $506,000 a year, is paid by the state. The federal government pays an equal amount.

Retailers are charged, on average, just over 8 cents per swipe machine transaction, so the government reimbursement doesn’t cover the expenses, Fleagle said.

If a food stamp debit card transaction does not go through - for example, the customer doesn’t have enough money on the card - the store still pays a fee, but does not get reimbursed, he said.

And grocers usually make less on food stamp customers than on others, Fleagle said. That’s because most food stamp users buy food staples. Grocers’ profit margins on those basics are normally lower than on steaks, prepared foods and items higher-income shoppers purchase, he said.

Munns said food stamp users don’t have as much to spend individually, but the items they choose are often the same high-markup processed foods that others buy.

Federal regulations for food stamps still permit the payment to grocers, but Iowa is one of the few states that still has a law that requires it.

Fleagle said for DHS to refer to the reimbursement as a subsidy is “a joke.”

Concannon, the DHS director, believes the grocer fee is discriminatory. “When I use my Visa card to purchase food at those same stores, Visa doesn’t pay a subsidy to the stores for my use. Rather, the store pays Visa a fee,” he said.

Concannon proposes giving the money the state saves to food banks or to help the poor, elderly or disabled.

The two top leaders in the House, Majority Leader Kevin McCarthy and House Speaker Pat Murphy, said Thursday they’re willing to take a look at it and keep it on the table.

Reporter Jennifer Janeczko Jacobs can be reached at (515) 284-8127 or jejacobs@dmreg.com