How C-stores Can Ensure Compliance for Sales of Age-Restricted Products

Cigarettes, vaping products, alcohol and other age-restricted items are convenience store chains' bread and butter along with, of course, gasoline. However, age-restricted products can also bring significant trouble to convenience stores if enforcement of the regulations surrounding their sale are not rigorously enforced.

Although the latest age validation technology can help flag potential underage users attempting to purchase tobacco products at c-store chains, Intouch Insight research shows technology alone cannot prevent noncompliance.

Point-of-sale (POS) solutions such as identification card scanning might work great, but they are ineffective when employees don't follow the processes and use them properly, which is often the case. In fact, technology has the potential to become a crutch.

Noncompliance Can Lead to Fines & Worse

Although regulations require retailers to check government-issued IDs for anyone trying to buy tobacco who appears younger than 27 years old, this is not always being done.

To better understand how brands comply with laws for selling age-restricted products, Intouch Insight conducted more than 350 covert visits at 33 different convenience store chains in January 2023. The results were illuminating.

While brands use technology to enhance their internal compliance programs, they may be relying on it too heavily because employees cut corners. Only two-thirds of our age-verification mystery shoppers, who ranged from 21 to 28 years old, were carded at the point of sale. This was despite the fact that 90 percent of these retailers had counter signage on display revealing their ID policy.

While state and T21 territorial laws vary, they generally prohibit the sale of tobacco to anyone younger than 21 years old. In some states, the offense of selling cigarettes to a minor is a misdemeanor. Penalties for a misdemeanor offense can include jail time of up to one year and fines of up to $1,000. In addition, the business' license may be revoked.

We found the latter to be true when one of our covert shoppers was given directions to the nearest competitor when the c-store employee said its tobacco license was revoked. Revocation of a tobacco license equates to lost revenue, fewer customers and reputational damage.

Technology Is Not a Solution by Itself

To ensure compliance with federal laws on selling tobacco products, c-store operators need to consider three things: education, efficiency and enforcement.

Employees must know and understand the compliance rules and store policies and, as importantly, the penalties for violating them. Given the nature of convenience store operations, employees need to be equipped with the tools to effectively balance transaction speed with age verification. Finally, they need to know that not following compliance policies will have serious personal ramifications.

Technology plays a key role in helping c-stores comply with ID checks while maintaining service speed. However, technology alone cannot enforce ID policies, as our study found employees often prioritized speed of service over enforcement.

Among the most common issues were:

• Failing to ask shoppers to show their IDs when purchasing tobacco products. This occurred more than one-third of the time.
• Not verifying that the ID belonged to the person who presented it. Even when the ID was scanned (which was 69 percent of the time), the employee failed to visually inspect it to confirm the person on the card and making the purchase were the same. This happened in one of every seven visits, or 15 percent of the time.
• Having customers scan their own ID or asking for their birth date but not verifying it. Shoppers reported being asked verbally for their birth date only 8 percent of the time.

These failures identify why it is important that store policies around mandatory ID-checking be put in place and followed. And this is where the stick vs. carrot approach comes into discussion. While brands will handle this in different ways, it is our experience that both need to be in place for a truly effective program. 

Incentivizing store managers and employees — the carrot — is a great way to get long-term, sustainable results. Reinforcing the behaviors you want employees to demonstrate, rather than focusing on managing bad behavior, can create a culture of accountability. However, it is also likely necessary to have performance management processes in place — the stick — for those on the team who do not respond to the carrot.

Regardless of how this is executed, the stakes of not having a system in place to monitor and measure the execution of these practices are high.

People Respect What You Inspect

Savvy store managers have data around tobacco sales and how much they profit from it. But what metrics are they measuring?

Saying "non-compliance is a non-issue for us because we have age-verification POS technology" creates a false confidence and potentially introduces new problems. Crossing the Ts and dotting the Is to ensure your organization is compliant requires operational discipline around employee training, operational inspections, and regulatory compliance visits.

The tried-and-true phrase, "people respect what you inspect," when applied to ID checks means that inspections need to happen if you require consistent execution. Randomly inspecting age-verification processes through covert shopping means employees are more likely to be compliant even when management is not watching. This is particularly true when the outcome of the inspections is used to support performance management — the carrot and the stick.

Cigarettes and other age-restricted products are big business for convenience store chains. But inconsistently or improperly checking IDs can get a c-store slapped with some hefty fines and shut down sales of those items.

Train staff on proper age-verification procedures, put internal processes in place that work in conjunction with the latest technologies and invest in regulatory-compliance visits to ensure compliance. Otherwise, your profits, customers and brand reputation could go up in smoke.

Cameron Watt is president and CEO of Intouch Insight, a provider of scalable customer experience management and measurement solutions. With more than 30 years of experience in service industries, Watt is an experienced leader having held management positions with Excite@Home, Pizza Hut, Frito-Lay, Mars and Unilever, as well having owned and operated his own businesses.

Editor's note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.