Acquiring banks that provide merchant account solutions pay attention whenever the U.S. federal government speaks. Going forward, e-cigarette merchants —retail and online — simply need to ascertain that their clientele is over the age of 18.
Last week, the U.S. Food and Drug Administration emphatically declared it’s had enough with the rampant use of e-cigarettes by teenagers, and has contacted four major brands to request action plans — due to the FDA in 60 days — on how they plan to stop the sale of e-cigarettes to minors. The e-cigarette brands included Juul Labs, Vuse by RJR Vapor Company, Blu by Imperial Brands, and Logic devices.
The FDA also sent more than 1,100 letters to vaping retailers — 7-Eleven, Walgreens and Circle K shops among them — warning of heavy fines and penalties for failing to prohibit the sales of e-cigarettes to minors. In addition to the letters, some retailers were slapped with fines between $300 and more than $11,000 for selling to those under 18 years of age. Penalties for such are only going to get worse.
As we offer e-cigarette merchant account solutions to merchants who sell online, they should particularly take note of the FDA warning.
The FDAs argument: Too many teenagers are regular users
The argument continues to rage: The feds are afraid that e-cigarettes serve as a gateway to traditional smoking of tobacco while e-cig proponents declare vaping as a solution for smokers to wane themselves off tobacco. We believe there is merit to both beliefs. The FDA’s argument, according to a recent New York Times article, is that ‘the adolescent brain is particularly vulnerable to addiction’ to nicotine, and that more than 2 million teens regularly vape.
Though e-cig users inhale less toxicity than traditional smokers, they are taking in more nicotine than a tobacco cigarette, and nicotine is addictive.
E-commerce merchants particularly under the microscope
FDA officials fear that e-cigarette companies are allowing what they call ‘straw sales’: the online purchases of bulk products, where the buyers of such then turn around and resell to minors.
Such a dubious practice could trigger volume limits on the sale of e-cigarettes, e-liquids and vape machines. The FDA will no doubt press the manufacturers to curb bulk sales, but governing such will prove challenging. It leads to another conundrum: The Big Tobacco companies involved have taken a hit in recent years because less Americans are smoking. Big Tobacco has had no choice but to launch their own e-cigarette brands as a result, with great success.
Will they be complicit in the effort to curb the sale of e-cigarettes to minors? E-cigarette critics aren’t so sure.
The feds are watching the e-cigarette industry, not for the first time
Back in May of 2016 we blogged extensively on how the FDA imposed new rules for e-cigarette merchants and manufacturers. Among the sweeping changes included:
- Merchants are required to register and apply to the FDA for permission to sell vaping products.
- Existing e-cig merchants had two years to apply to the FDA for licensing with an additional year allotted to the FDA to review the application. Existing merchants were permitted to remain open for business during this period.
- No sales of e-cigarettes to anyone under the age of 18. Persons believed or appearing to be aged 26 must present valid ID for purchase.
- Merchants must disclose manufacturing practices and detail ingredients.
- Merchants are prohibited from distributing free samples of e-liquids or devices.
- Advertisements and descriptions of ‘light’ or ‘mild’ must have FDA approval.
- Merchants are subject to inspections.
No affect on e-cigarette merchant account solutions (yet)
Despite the FDA’s warnings, the e-cigarette industry continues to thrive. Instabill has the merchant account solutions that don’t only launch your business, but help it thrive.
Merchants receive their own dedicated merchant account manager who remains on hand for the entirety of the merchant account relationship. A conversation can be had by telephoning 1-800-530-2444 today to discuss our best solutions.