Over the last decade, food stamp participation rose more sharply than expected following the relatively short and mild recession in the early 1990s and fell more sharply than expected after 1994 during the sustained period of economic growth. Report language accompanying the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act of 2001 directed the Food and Nutrition Service to study the decline in participation in the Food Stamp Program.

This report explores the feasibility and potential cost of enabling EBT systems to differentiate between program-eligible and ineligible items. It considers the cost of upgrading systems in stores that now have scanners and the cost of installing new systems in stores without scanners. The report also examines the potential for the purchase of ineligible items even with the introduction of new technological controls.