The Agriculture Department is considering using plastic cards embedded with computer chips and magnetic credit cards to cut waste and fraud in its $11.3 billion food-stamp program. The cards would be given to recipients instead of food-stamp coupons, which are difficult to trace and can be resold easily, officials said.
The card with the computer chip would be given to a grocery store cashier and then fed into a machine that would immediately inform the recipient's local welfare office about the transaction, register the amount of food purchased and tell the card-holder how much of his monthly allotment was left. The other card, which is being tested in Pennsylvania and New York, is similar to magnetic automatic teller cards that banks issue. Food-stamp recipients would use the cards to "charge" their purchases electronically, up to their allotted limit, at the grocery store.
Both cards would make it tougher for food-stamp cheaters to sell their stamps or to receive double benefits by claiming their coupons had been lost or stolen before they used them, officials said. Besides the electronic cards, officials said they are looking at various ways that computers could be used to verify the income of welfare applicants.