Target to Accept SNAP Payments for Online Orders

The retailer is following moves by Walmart, Amazon and Instacart to draw lower-income customers.

April 04, 2022

Target Shopping Cart

ALEXANDRIA, Va.—Target will begin accepting Supplemental Nutrition Assistance Program (SNAP) payments for online orders, reports Reuters. The nation's seventh-largest retailer could start accepting the payments as early as late April. The SNAP payments would be accepted through Shipt.

Walmart and Amazon have been offering online payments with SNAP since 2019, and Instacart also allows customers to pay with SNAP.

Roughly 21.7 million U.S. households use food stamps, which are mostly restricted payments to cold food items, non-alcoholic beverages and seeds and plants.

Accepting food-stamp payments online could build customer loyalty and help it sell other products, David Klink, senior equity analyst at Huntington Private Ban, told Reuters.

"Target is kind of taking the long view, saying you can use your food stamps now," he said. "But maybe at some point you won't depend on food stamps and you'll remember that Target was there for your various shopping needs."

Twenty percent of Target’s sales were grocery in 2020, and the company is looking to expand its grocery sales, especially through private label, reports Reuters.

"Target will put a leading national brand like Nestle on a display, but put the Target [private-label] item right next to it, to get the consumer to cross over," Burt Flickinger, managing director at Strategic Resource Group, a consulting firm, told Reuters, adding that the move was "transformative."

The number of U.S. households using SNAP benefits to buy groceries online saw a 50-fold increase last year after the U.S. Department of Agriculture (USDA) expanded options for food stamp recipients to shop online. The USDA said that more than 3.2 million food-stamp households shopped online in January, doubling from a year before.

Wesco, a Western Michigan-based c-store chain, began accepting SNAP payments this month for on-demand home delivery and curbside pickup at its 55 locations. 7-Eleven Hawaii also launched home delivery and curbside pickup for SNAP customers at its 65 locations across Oahu, Big Island, Kauai and Maui. Both companies have partnered with Vroom Delivery for the launch.

The online SNAP program is independent of in-store SNAP programs. Retailers must apply separately in partnership with an e-commerce platform that has been certified by FNS.