Learning to Comply

Retailers find there's more to FDA tobacco compliance than meets the eye.

By  Linda Abu-Shalback Zid, Senior Editor

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While half of them can legally smoke, all of them now need to be carded because they are younger than 27—or the retailer who sells to them could face a penalty from the U.S. Food and Drug Administration’s Center for Tobacco Products (CTP). And selling to the 16- or 17-yearold now means two penalties: one for not carding, and one for the underage sale.

“Flash cards” such as these are used by The We Card Program Inc. The point of the game, according to Doug Anderson, is to remind those selling tobacco that they shouldn’t be guessing at ages. “They’re thinking somebody looks old enough to buy, 18 years old. But now with the FDA, they’ve got to get rid of that mentality and card someone under 27 years old,” says Anderson, president of the nonprofi t tobacco-compliance organization.

At press time, there had been approximately 15,000 FDA inspections, with about 450 warning letters issued. That’s 97% compliance.

But what happens if you’re within that 3% that has a compliance slip? When it comes to FDA compliance, Anderson sees some common pitfalls:

  • Lack of awareness. While retailers have improved, Anderson remains surprised by how many retailers aren’t aware that the FDA is enforcing laws, along with performing stings at more local levels. According to the Synar report, produced by the Substance Abuse and Mental Health Services Association to track youth tobacco sales, the retailer violation rate for state compliance checks for fiscal 2010 was 9.3%, the lowest since the report fi rst came out in 1997—when the rate was 40%. “Retailers are doing a good job, and there’s evidence to support that. But there’s this new federal regulation to follow, and an additional layer of FDA compliance checks,” Anderson says.
  • Miscalculation. For c-stores, says Anderson, “convenience often equals speed” and can trip up retailers calculating someone’s age. Retailers often say that they carded individuals, but they miscalculated— making it one of the most common mistakes before the FDA stepped in. “Our policy had been to encourage them to card anyone under 27 years old; that’s now federal law.” (See graphic below.)
  • Peer Pressure. Younger clerks might still have friends potentially below the age threshold. “Nobody likes to say no to a friend,” he says. In those situations, he suggests clerks point to the law and say that it’s their responsibility and requirement—and that both parties could get in trouble. “It gives them a confi dent phrase to say. And confi dent and trained employees naturally perform better than those who are susceptible to peer pressure.”
  • Customer Concerns. In the past, you might not have had to card a cus- tomer under 27 if you had carded them at your store before. The FDA requirement means you must now card them every time they’re in the store. “It’s logical to assume that can raise customer service issues and complaints from adult customers,” Anderson says. We Card, he says, even adjusted its logo to say “Under 27, Federal law requires We Card every time.” Retailers place the logos on windows, at their front door and at the point of sale. “That will help inform the general public in the store, and hopefully lessen the irritation factor of any customers that need to be carded.”

Built into the regulation is more than just checking IDs, however. While the majority of violations have been for ageverification situations thus far, retailers can also get dinged for:

  • Having self-service displays of cigarettes, roll-your-own tobacco or smokeless tobacco if minors are allowed in their stores.
  • Selling individual cigarettes, or “loosies.”
  • Providing free samples of cigarettes or smokeless tobacco.
  • Giving gifts in exchange for buying cigarettes or smokeless tobacco.

Penalty Procedures

Two enforcement tools CTP uses to cite violations are warning letters and civil penalties. And there are two schedules for the maximum civil penalties, based on whether or not the retailer has a training program that meets FDA specifications. But because the agency had not yet published regulations and standards for such a training program, however, FDA is seeking the reduced penalties—as if a retailer had those programs in place already.

Ann Simoneau, CTP’s director of the office of compliance and enforcement, says the agency doesn’t have a time frame for delivering those regulations. In the meantime, “We have issued a guidance document that details the criteria or the elements that we would expect to see in any retailer program. And as long as a retailer would have those elements in their program, then that would be an appropriate training program.”

Guidance does not a law make, Simoneau acknowledges. Still, she says, “It’s pretty detailed, and as long as they follow that guidance, they should be fine.”

Warning letters, Simoneau says, are issued the first time an FDA tobacco compliance check inspection reveals a violation. They are sent by tracked mail to retailers, as well as posted on FDA’s Tobacco Warning Letters Web page. Retailers must then submit a written response within 15 working days, identifying how they plan to correct the problem.

The 15,000 inspections that had been concluded at press time were first-time compliance checks. At locations where violations are discovered, however, the FDA plans to conduct follow-up inspections. Simoneau says, “It’s our plan after our first inspection, if violations are found, to send a warning letter. And if subsequent inspections reveal violations, then we will pursue civil money penalties.”

The current schedule for the maximum civil money penalties that can be faced (as if retailer training programs are in place):

  • First violation is a warning letter to the retailer.
  • Second violation within a 12-month period is $250.
  • Third violation within a 24-month period is $500.
  • Fourth violation within a 24-month period is $2,000.
  • Fifth violation within a 36-month period is $5,000.
  • Sixth or subsequent violation within a 48-month period is $10,000 (as determined on a case-by-case basis). Another tool FDA has is “no tobacco sales orders,” precluding the retailer from selling tobacco products, which could occur when the retailer has repeated violations over a period of time.

State Contracts

At press time, the FDA CTP had 22 contracts with states and territories to perform the compliance inspections, and planned to have all contracts by the end of fiscal 2012. (See sidebar, above.)

But just because a state doesn’t have a contract doesn’t mean that retailers are off the hook. They still have to comply with the law, and states and municipalities will continue to conduct their own inspections. Also, Simoneau says, “We’re working with folks that are submitting complaints to us, or have any information. Certainly, we’ll follow up on any of the complaints, once we have the contracts in place and the people trained and go out there and start inspecting.”

Meanwhile, David Gaudet, president of The BARS Program, says retailers might want to consider internal tobacco mystery shops to prepare themselves— an effort that is “encouraged” in the FDA’s draft guidance. Mystery shops allow retailers to benchmark how clerks are doing with carding, so they can determine if more training is needed to prevent violations. BARS visits about 20,000 stores per month, although they have been getting additional requests since retailers have become more aware of the FDA compliance checks.

Another suggestion is to implement a company policy. “For a lot of companies, it’s ID under 30,” he says. “And if you to do that, you’ll be fine. So this whole process with FDA should be moving companies away from IDing under 18 or under 21 to IDing under 30, and following company policy. Now the company policy has some teeth to it.” Anderson of We Card agrees that “if you don’t have a store policy, you need to create one.”

“Store policies,” he continues, “are a perfect document for a manager/owner to share with an employee, get them to review it and sign a copy. It’s a formality; it’s not training. It’s a way to have employees recognize from the top down in the company that responsible retailing is taken seriously: Here’s the expectations, and here’s what you need to do.”

The CTP also holds webinars and features tools on its website to help retailers comply with the laws. “We really encourage folks to get involved and let us know what their thoughts are,” Simoneau says. “And we certainly encourage them to educate their staff about the importance of not selling tobacco products to children, and just to let them know we’re inspecting in several states now, but we will soon be in all states.” 


Compliance Best Practices

  1. Make sure store policies are fair and consistent.
  2. Provide regular employee training, focused on preventing underage tobacco sales.
  3. Offer computer-based training to more efficiently train and track employee progress.
  4. Educate employees about federal law, FDA regulations, state laws and store policies—including the reasons why minors should not have access to tobacco.
  5. Train and require every employee to ask for identification from every person under the age of 27 who attempts to purchase tobacco products.
  6. Simulate difficult situations that occur at the point-of-sale.
  7. Train younger employees to handle peer pressure.
  8. Provide employees practice opportunities with age verification tools.
  9. Require all employees to pass a test.
  10. Continuously supervise, and offer positive recognition.
  11. Prominently display proper signage.
  12. Use point-of-sale tools effectively.
  13. Keep employees up to date on issues affecting your store and tobacco sales.
  14. Know where your store stands: Periodically check store compliance.
  15. Be a responsible retailer: Get involved in your local community. Source: The We Card Program Inc.

Nature vs. Nurture

A search on the FDA Center for Tobacco Products website shows that La Grange Park, Ill., a town of about 12,000 residents, has had five compliance checks and has passed every single one. So you might wonder: Is there a secret weapon that makes this a town with no violations?

The sign on the door at Angel’s Spirits informs you “We Card Hard.” It refers to the store’s stance on alcohol compliance, but it shows the store has a built-in awareness of the importance of obtaining ID just by being a liquor store. So it’s no wonder the location shows up as one of the five with “No Violations Observed.”

Andy Mikson, the twentysomething clerk at Angel’s, says he’s completely comfortable asking for IDs: “People know they have to show them.” He’s also willing to take it a step further, if someone acts suspicious, by asking a few key questions about the ID. “If they don’t know their own address, then I know it’s not them,” he says.

Angele Zukauskas, one of the owners of Angel’s, says she didn’t even know about the FDA compliance inspection, or that her store had passed. But for her, it’s just second nature. She says she often “can just tell” if someone is underage by hesitant behavior as they walk in the door. “I’m a schoolteacher, so I just don’t condone underage drinking or smoking,” she says.

Just down the street, at the local 7-Eleven that also passed a check, compliance is more of a learned behavior. In addition to 7-Eleven compliance training, employees also go through a state program, according to store manager J.P. Pandya, something the retailer had been doing long before the FDA launched its compliance checks.

If an employee were to fail a compliance check, he or she might receive additional training. After a second failure, however, “They won’t have a job,” Pandya says. “We need to be sure we’re doing everything we can to be in compliance.” 


FDA Tobacco Retail Inspection Contracts

At press time, the FDA Center for Tobacco Products had contracts with 21 states and the District of Columbia to perform compliance checks. For fiscal year 2011, ending Sept. 30, the FDA hopes to have contracts with up to 75% of states and territories, with a goal of having all the contracts in place by the end of fiscal 2012.

  • Alabama
  • Arizona
  • Arkansas
  • Colorado
  • Connecticut
  • Delaware
  • Idaho
  • Illinois
  • Kansas
  • Kentucky
  • Maine
  • Maryland
  • Massachusetts
  • Minnesota
  • Mississippi
  • Missouri
  • New Jersey
  • Pennsylvania
  • Rhode Island
  • Tennessee
  • Washington
  • Washington, D.C.
  • Wisconsin 

Are You in Compliance?

You might have passed a compliance inspection and not even known it, because the FDA Center for Tobacco Products (CTP) directly notifies you only if you have a violation. A database that is searchable by name, city, state or ZIP code on the CTP website allows you to see if your establishment has undergone an FDA compliance check. If there were violations, the site links to the actual letter that went out, detailing what the violations were. The site also lists retailers that had compliance checks with “No Violations Observed.”

Tom Briant, director of the National Association of Tobacco Outlets, says his association is encouraging the FDA to consider sending a letter to all of the retailers that pass the compliance inspections, so that they are aware that the inspection occurred and that they complied with the law.

While that hasn’t happened yet, he says such letters could be put on bulletin boards as a pat on the back and a reminder about the inspections. “That would be a very helpful tool for retailers to congratulate their staff on a job well done in complying with the FDA tobacco regulations,” he says. He also points out that a look at the database shows that about 97% of the FDA’s inspections have turned up no violations. “Retailers need to remain vigilant and train their clerks well not to sell tobacco products to a minor and comply with the law—and I think the vast majority have done exactly that.” For more, see: www.fda.gov/tobaccoproducts/guidancecomplianceregulatoryinformation/ ucm232109.htm

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