Since the Food and Drug Administration (FDA) deeming regulations went into effect this summer, a good deal of confusion had swept through the industry.
Brick and mortar shops were bound by certain rules of compliance, which included prohibiting store employees from troubleshooting devices purchased by their customers, eliminating the practice of offering free samples, and submitting store clientele to more rigorous age verification at checkout.
Determining if someone is legally permitted to purchase vapor products in-store is a fairly straight-forward process, and only requires that the customer present a valid driver’s license. However, age verification for Internet purchases is a far trickier requirement for online vendors.
The FDA has regulated the online sale of traditional cigarettes by requiring retailers to take a number of steps in ensuring that these tobacco products cannot be purchased from websites by minors. It wasn’t until this year that online vape vendors had to submit to this rule, whereas before they operated completely abided just like any other e-commerce business.
With the introduction of the new regulations, both existing and new US online vaping businesses are likely to receive updated requirements from their credit card companies in line with the FDA’s actions that will require their compliance.
Failure to comply might mean that these online shops will be served with a termination notice withdrawing their credit card facility, according to reports issued by ECigIntelligence, a regulatory and market resource for the vapor product sector.
ECigIntelligence reports that for an online vape business to be able to accept credit cards under these new requirements, it must:
• Properly age-verify all transactions for any e-cigarette or vaping related product.
• Register with Visa and MasterCard via the merchant’s credit card processor and pay an annual $1,000 registration fee.
• Obtain an attorney’s letter stating that they are operating within existing applicable law sufficient to satisfy their credit card processor.
• Provide additional information, as requested by their credit card processor, to ensure they are operating within the new FDA regulations.
These requirements could mean trouble for online businesses. Market analysts suggest that rather than discussing how to comply, these businesses may instead be tempted to continue current market practices while putting their faith in the new rules being overturned—a gamble that may prove detrimental in ensuring their survival in a post-regulatory environment.