Tobacco Compliance: Insights From the Age Verification Study 2024

Tobacco is a major source of revenue for convenience stores. According to Convenience Store News, cigarette sales drive roughly 20% inside the store, and the convenience store channel accounts for around 90% of all cigarette sales.

Studies predict the tobacco market will have a compound annual growth rate of 3.4% from 2022 to 2030. 

However, as the industry expands, there is an important point to consider: the age verification process, which is vital for ensuring the responsible sale of tobacco products and safeguarding a brand's business with respect to government regulations. 

In this blog, we will explore the findings from our Age Verification Study 2024, evaluate the current state of tobacco compliance, and provide recommendations for brands to improve their operations.

Our study included 49 brands and over 200 visits by shoppers aged 21-26 to assess age verification practices in convenience stores across 36 US states.

You can download the  now,  or if you're curious about the main highlights, keep reading!

Age Verification Execution in The Field

Despite federal mandates requiring retailers to check government-issued IDs, tobacco products were sold without ID being requested in more than 1 out of 5 visits.

Although these figures are concerning, there has been a 12% improvement in ID requests compared to 2023.

Insights from the field: “When I approached the register, the employee was very kind. She did not ask to physically see my ID but did ask for my birthday. She had me repeat it twice for her.” 

How Employees Are Verifying Age

When it comes to age verification at convenience stores, employees use various methods to ensure compliance. 

Our study reveals that the most prevalent approach is ‘scanning the customer's ID,’ followed by ‘manually entering the birthdate from the ID,' and ‘visual inspection alone.’

However, what is concerning is the finding that nearly 20% of transactions involved no age verification process whatsoever.

Moreover, among the youngest shoppers, there was a 7% lower rate of ID requests compared to the top end of the age range. 

The time of day also appears to influence the likelihood of ID inspections. The data indicates that IDs are more frequently inspected during the evening and late-night hours (97% of the time from 7 pm to 12:59 am) compared to the morning and early afternoon hours (77% of the time from 7 am to 12:59 pm).

Want to dive into all the data we've gathered in this study? .

Age Verification Technology (AVT)

Age Verification Technology (AVT) played a significant role in the compliance process, with most visits involving its use. However, the effectiveness of AVT comes down to proper execution by employees. 

While AVT was employed in 52% of the visits to scan customers' IDs, we found that in 19% of those visits, the ID was not visually inspected, compared to 21% of the time in 2023. 

Despite the slight improvement from 2023,  it still highlights a significant gap in thorough age verification practices.

Retailers must ensure employees are not using age verification technology (AVT) as a crutch. It should supplement, not replace, manual verification methods. 

Proper training and regular audits can help mitigate this issue and reinforce the importance of a dual approach: using AVT for efficiency and technology-backed accuracy while maintaining manual checks for added scrutiny and compliance.

Insights from the field: “The employee scanned my item and then asked for my ID. I tried to hand it to them, but they just had me flip it over so they could scan it. They didn’t look at or pick up the ID at all.”

Store Signage

Signage plays a crucial role in communicating age verification policies to both customers and employees. Our study found the following:

• 82% of locations had ‘we ID’ signage at the point of entry.
• 72% of locations had ‘we ID’ signage at the point of purchase.
• 46% of locations had other signage regarding selling to minors.

However, 10% of locations had no signage anywhere in the store, including point of entry and point of purchase.

When comparing national and regional brands, some trends emerged. National brands outperformed regional ones in terms of signage placement. 

Conversely, regional brands excelled in the actual execution of ID inspections. As shown in the graphic, they performed better in all 'ID inspection' categories, indicating that while there is room for improvement in signage, their employees are more diligent in verifying customer ages.

Curious to see all the data we've gathered in this study? .

The Impact of Non-Compliance on Brands

Non-compliance with tobacco age verification carries serious consequences that can affect a brand on multiple fronts. 

Legal and Financial Implications

Non-compliance with tobacco regulations may result in substantial fines and penalties and the possible suspension or revocation of retailers' tobacco sales licenses.

Violations can be a range of infractions, such as selling tobacco products to minors, improper labeling, and failing to adhere to advertising restrictions. These fines can accumulate quickly, leading to significant financial burdens for retailers.

Brand Reputation Damage

Incidents of non-compliance can result in negative publicity, harming a brand's image. With information spreading quickly through social media, a single violation can cause extensive brand damage.

Operational Impact:

Non-compliant brands may receive more attention from regulators, leading to more frequent inspections and stricter monitoring, disrupting business operations and increasing compliance costs.

How  Brands Can Do Tobacco Compliance Better

Ensuring a robust tobacco age compliance program is essential for brands aiming to avoid legal repercussions, protect their reputation, and maintain operational efficiency. 

The first step is to foster a culture where asking for ID when selling tobacco or other age-restricted products is the norm. Employees and operators must understand that it’s not just about following procedures like AVT (Age Verification Technology) but about keeping tobacco products away from minors and protecting the business.

Regular audits help brands identify potential areas of non-compliance before they become issues. By routinely evaluating their own practices, c-store operators can ensure that all tobacco compliance regulations are consistently met and quickly address any discrepancies.

Conducting covert visits through mystery shopping programs is an effective way to measure real-world compliance. These visits provide an unbiased view of how well employees adhere to age verification protocols across multiple locations.

The results from these programs can also be used to incentivize the behaviors you want to see from your employees rather than using the program just as a disciplinary tool. It is always our recommendation to focus on the ‘carrot’ first instead of the ‘stick.’

After establishing a performance baseline through mystery shopping, operational inspections can fine-tune compliance execution at the location level. These inspections should ensure that all employees are correctly following protocols, using AVT effectively, and maintaining proper signage. 

Effective compliance programs are not merely about avoiding penalties; they support the longevity and sustainability of the business and the industry as a whole.

At Intouch Insight, we empower brands to deliver exceptional experiences - while ensuring they comply with government regulations. Let's chat about how we can support your brand.