Tobacco is a major source of revenue for convenience stores. According to Convenience Store News, cigarette sales drive roughly 20% of gross margins and account for around 90% of all cigarette sales. Despite this,storesare not consistently asking customers to provide ID when purchasing tobacco products. And in some cases, they are not properly inspecting the ID provided.
Statista estimates revenue from cigarette sales in the U.S. alone will be over $80B in 2023. And Grand View Research predicts the tobacco market to have a compound annual growth rate of 3.4% from 2022 to 2030. But, to keep their license and avoid hefty fines, brands need to ensure they comply with government legislation. This means always checking IDs when selling tobacco.
Here we will look at current compliance when it comes to age verification and how brands can do better in 2023.
Tobacco compliance today
Federal law requires retailers to check government-issued ID for anyone appearing under the age of 27 when selling tobacco. It can be difficult to judge someone’s age at a glance. That’s why the best practice is to simply always as for ID when selling cigarettes or other tobacco products.
Intouch Insight conducted 352 covert visits across 33 convenience store brands. The mystery shoppers ranged in age from 21-28 in order to meet the criteria of appearing 27 or under. Of the stores visited, 90% had signage at the counter about their ID policy. But in only 66% of visits were the mystery shoppers asked to show ID when purchasing tobacco products.
Women were more likely to be carded with 68% of female shoppers reporting being asked to show ID compared to 62% of males. This could indicate convenience store staff are less confident guessing the age of female customers. But, given the mystery shoppers were all around or below the age of 27, every one of them should have been asked for ID.
Age verification software has become increasingly popular as well. When the mystery shoppers were asked for ID, 69% of the time the employee used software to scan the ID. But, in 15% of these instances, the employee did not visually inspect the ID. In a few cases, employees simply asked the mystery shopper what their birthday was to determine if they could complete their purchase.
How Can Brands Do Better?
Not consistently asking for ID means brands are at risk of losing their piece of over $80B in 2023. The best way to improve your age verification program is with the trifecta of mystery shopping, operational audits, and improved training.
The data above includes 33 brands across the US, so the first step is knowing how your brand stacks up. Covert visits by mystery shoppers are the best way to get a baseline of current performance across your locations.
Once you are measuring how your locations are performing, operational inspections can help you fine-tune each location. Ensure there is signage informing customers that they will be asked for ID when purchasing tobacco products. Additional signage reminding employees to ask for ID can also be helpful.
Finally, there is no replacement for employee training. Not only does this mean training employees to ask for ID when selling tobacco products, but also ensuring they are doing so properly.
At Intouch Insight, we want to help brands deliver exceptional experiences - while ensuring they comply with government regulations. Let's chat about how we can support your brand. Simply fill out the form below.