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    Damage Control

    Carding customers has never been more important. 

    By Hank Behar

    Scene: A convenience store in Buffalo, NY
    You’re the cashier.
    A customer asks for a pack of Marlboros. He’s 6 feet tall.
    It’s Sept. 23, 2010.

    You:     May I see your ID, please?
    Him:    Sure. (He shows you his driver’s license)

    You check his date of birth: May 13, 1989, and you sell him the Marlboros.

    Question: Did you do the right thing?

    Answer: No.

    Surprised? After all, his ID says he’s over 21 and he’s a pretty big guy. Looks okay.

    But you left a few things out of your carding procedure.

    You didn’t turn the license over to see if it had a bar code or a similar imprint on the back.

    You didn’t check the expiration date, or if the description fit the customer, or if he matched the photograph.

    And you didn’t sweep the card with your fingers to see if it had any bumps, bubbles or other indications it had been tampered with.

    Carding, in other words, involves more than just checking the DOB.

    If this transaction had been monitored by an inspector, and you made the sale to a minor because you didn't card him properly, you may have broken not just state law, but federal law, too.

    The result could have been a fine for both you and the store, and penalty points for the store. Too many points and the store could lose its tobacco license, which is tantamount to a death sentence, since most c-stores can’t survive without tobacco sales. (The National Association of Convenience Stores estimates that cigarette sales account for over 36 percent of inside sales per store, and average almost $500,000 annually).

    Penalties Vary
    In New York, where you just had your cashier adventure, you could have been fined $500 (assuming it was your first violation). Your store’s fine could run up to $1,000, but more seriously, it would have been slapped with two penalty points.

    It takes just three points in three years to trigger a six-month suspension of a store’s tobacco and lottery licenses in New York, so two points doesn’t leave much wiggle room. Another violation and another two points would push it over the fatal three-point threshold -- with the added insult of a $500 to $1,500 fine.

    But there’s one mitigating circumstance. If the employee who made the illegal sale had been trained and certified by a Health Department-approved provider such as the Responsible Retailers of New York Online Training Program, which uses content from the We Card program, the store would receive only one point for each violation. It could therefore survive two infractions and still have time to get its house -- and employees -- in order.

    Industry Initiatives
    Mitigating circumstances notwithstanding, the c-store industry has not been sitting around paying its fines, and letting it go at that. It’s been acutely aware that tobacco sales to minors was a losing strategy, so when Congress enacted the Synar Amendment in 1992 (after its sponsor, Oklahoma Congressman Mike Synar), which is aimed at decreasing access to tobacco products by those under 18, the industry embraced its provisions. The result has been a spectacular reduction in store violations. In 1997 the violation rate was 40.1 percent. This year, ending September 30, it was 10.9 percent. North Dakota racked up the lowest rate, at 1.6 percent, while the highest belonged to Oregon, at 18.8 percent.

    Much of the effort contributing to the success rate has been supported by chains such as Circle K. In 1999, it was the first national c-store chain to voluntarily prevent minors from gaining access to tobacco. The c-store chain designed special display units that put cigarettes, cigars and smokeless tobacco behind sales counters and out of the reach of customers. This was combined with specialized training for its employees.

    More recently, in April of this year, Valero entered an agreement with the California Attorney General to eliminate vending machines in company-owned stores, administer independent compliance checks, and limit in-store tobacco advertising, among other measures.

    Gas stations in particular have felt the spotlight, since, according to a survey cited by www.consumeraffairs.com, 47 percent of underage youths who reported buying cigarettes said they got them at gas station c-stores. As a consequence, multi-state agreements similar to those by Valero have been adopted by Conoco, Phillips 66, 76, Exxon, Mobile, BP, ARCO, Chevron and Shell.

    Smaller chains more often have relied on state associations for assistance in training. In its November 8 newsletter, for example, the Missouri Petroleum Marketers and Convenience Store Association (MPCA) pointed to We Card as a source of training programs and materials.
     

    Enter the FDA
    But change is in the air. Regulations governing underage tobacco sales are entering a new phase, with the FDA (Food & Drug Administration) positioned to become the dominant player.
     

    In June 2009, the President signed the Tobacco Control Act, granting the FDA new authority to regulate the manufacture, marketing and distribution of tobacco products. On June 22 of this year the new regulations went into effect, with these major provisions:
    •    No tobacco sales to anyone under 18
    •    All purchasers under 27 must be carded with a photo ID that has the date of birth
    •    All transactions must be face-to-face
    •    No vending machines or self-service displays
    •    No “loosie” sales of individual cigarettes; packs only
    •    No free samples
    •    No gift offers based on tobacco sales
    •    No tobacco-based sponsorship of events
    •    Penalties for violations will be two-tiered, with lower penalties for retailers with approved training programs
     

    Sound familiar? Yes, many of the provisions coincide with state laws -- but not all. So the question is: What happens when a state law and federal law diverge? In some cases, such as age requirements, there should be no problem, since most states also have 18 as the minimum age, and the rest have 19 (AL, AK, NJ, UT , Nassau, Suffolk, and Onondaga counties in New York).
     

    Penalties are another matter, however. Like many states, the FDA has reduced fines for operations with approved training programs, but the definition of an “approved training program” has not yet been given. And the fines themselves differ from most states.
     

    It’s expected that states will be able to “layer” their regulations on those of the FDA, but nothing is set at this time.
    One thing is certain, however: The FDA will enforce its regulations through contracts with the states. The following, from the office of Kathleen Quinn, Acting Director, Communications, Center For Tobacco Products, is the SOW (State of Work) provision related to the contractors:
     

    The Contractor
    The Contractor shall be an agency or subdivision of a state, territory, local, or tribal government that has the power to create, enforce, or administer rules or policies that govern the conduct of individuals or other private entities such as small businesses. Examples of appropriate agencies may include: public health departments, attorneys general offices, law enforcement agencies and food and drug agencies.
     

    Since the law went into effect on June 22, contracts have been signed with 15 states: Alabama, Arkansas, Arizona, Colorado, Idaho, Kansas, Maine, Maryland, Massachusetts, Mississippi, Missouri, Illinois, Pennsylvania, Tennessee, Washington. Thirty-five to go.

     

    By Hank Behar
    • About Hank Behar

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