When I first started in banking I was a teller. We issued food stamp certificates when they were still on paper. One day, a gent comes in and sort of mills around the lobby. I can see that he's holding the ID card from the welfare office that we used to verify ID and also that told us how much each recipient got. He keeps milling around, then finally makes his way to my window. The only was that I can describe him is ashamed. He apologized to me for getting the stamps. Over the next few months I get to know him, and heard his story. The plant where he had worked for 15 years closed down. He, like everyone else, was looking for a job and he was having no luck. He waited a few months before applying for benefits - he depleted his savings before doing so. Then he stopped coming in. A few months later he came in to tell me that he had found another job and was doing well. Do I expect him to pay me back for feeding his kids? No.
He was, unfortunately, the exception, not the rule. Had another guy come in, throw his id card on the counter and say - my apologies, but this is a quote - "Give me my *censored* food stamps." Guy had more gold on him than I've ever seen in one place.
Are benefits a right or a privilege? I say a privilege.
Most states put their benefits on debit cards. In PA, the card has two 'sides,' cash benefits and food benefits. The food benefits are for food alone, but it's up to the grocer to police its use. Are there unscrupulous grocers out there who will let recipients buy anything with their food benefits? You betcha. Solution to that? Tie the benefit card and credit card terminal to the register and use a whitelist to validate all the purchases against the UPC.
The cash benefits are not policed at all. Shortly after the cards came into use, guess who got credit card terminals with PIN capabilities? Every STATE liquor store in PA. It costs the state store (and every retailer) money to process that transaction. Who pays for that? You and I pay it through increased prices. You want to help your local businesses compete against the Wal-Marts of the world? Pay your local guy in cash, pay Wal-Mart with a card - preferably a card that carries rewards (points, miles, cash-back, etc) or, better yet, one issued to your business. Don't get me started on Wal-Mart and credit cards, or the flack that the gas stations took when the prices were so high.
The benefit cards have a great deal of potential to limit their use, but no one is utilizing that potential.