The way I've heard of it working (third-hand, so grain of salt and all that) is basically that an unscrupulous grocer fails to report some cash transactions. H

The way I've heard of it working (third-hand, so grain of salt and all that) is basically that an unscrupulous grocer fails to report some cash transactions. He then "sells" those groceries to someone with food stamps, in reality trading some fraction of the cash for the food stamps.