New FDA Rules on E-Cigarettes: What Will They Mean for Merchants?

New FDA Rules on E-Cigarettes: What Will They Mean for Merchants?

For fear of “hooking a new generation on tobacco,” the U.S. Food and Drug Administration announced sweeping changes for the electronic cigarette industry on Thursday. The 499-page document detailing the FDA rules on e-cigarettes included reforms on age limits, manufacturing and ingredient details and significant more oversight by the FDA.

E-cigarette merchant accounts have consistently been among the top-selling industries for Instabill, which primarily deals with online e-cigarette and vaping businesses directly affected by the new FDA rules on e-cigarettes.

What are the Changes?

The new FDA rules on e-cigarettes will take effect in 90 days (Aug. 8). Among the long list of reforms includes the following:

  • E-cigarette and vaping merchants must register and apply to the FDA for permission to sell products
  • Existing e-cigarette merchants have two years to apply to the FDA for licensing – with an additional year allotted to the FDA to review the application – but can remain operational.
  • Sales of e-cigarettes are banned to anyone under the age of 18.
  • Persons perceived to be under age 26 will have to show valid ID for purchase.
  • E-cigarette merchants must provide the FDA detailed information on manufacturing practices and ingredients
  • Merchants will be prohibited from distributing free samples of products
  • Merchants cannot advertise their liquids as light or mild without FDA approval
  • Merchants are subject to inspections

The effect on e-cigarette merchants and companies that process credit cards for e-cigarettes remains to be seen, but we offer three theories of our own:

  1. The FDA is Not Going Away

What the Consumer Finance Protection Bureau is to high risk industries, the FDA is to the e-cigarette industry. The FDA will continue to maintain a keen eye on e-cigarette merchants for years to come, and further regulations – perhaps raising the legal age to 21 or restrictions on flavors – could be forthcoming.

  1. Can You Buy Me Beer?

It is no secret that e-cigarettes are popular among high school-aged youths. With the FDA’s age limit on e-cigarettes, it is certain to have a ‘black market effect,’ similar to when the drinking age was raised from 18 to 21. If not already, a culture of those of age buying e-cigarettes for those underage will grow.

  1. Will Smaller and Startup E-Cigarette Merchants Suffer?

An excellent point came up in a recent New York Times article regarding small business e-cigarette merchants. Larger manufacturers of e-cigs, including those under big tobacco companies, can afford legal teams to navigate the reforms. Many small e-commerce merchants likely cannot. Could this be the death of small and startup e-cigarette businesses?

Instabill Offers E-Cigarette Merchant Accounts for E-Commerce Merchants

Despite the new FDA rules on e-cigarettes, Instabill will continue to offer the most competitive rates and fast approvals for e-cigarette merchant accounts, as it has done the last 10 years. Merchant account experts are available by clicking on the live chat option below or by calling direct at 1-800-318-2713.

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