The Food and Drug Administration (FDA) issued a directive in December 2019 stating, “It is now illegal for a retailer to sell any tobacco product — including cigarettes, cigars and e-cigarettes — to anyone under 21.”
The ruling had an immediate impact on convenience stores. Selling tobacco to underage customers will result in fines, penalties or a loss of license to sell tobacco products.
C-stores saw cigarette sales of $55.9 billion for the 52 weeks ending April 19, 2020, a dip of 0.2% over last year, while unit sales fell 4.3%. Many retailers attributed the decline in sales to the onset of the Tobacco-21 rule.
“Retailers need to fully understand that tobacco is an age-restricted product. As a result, selling an age-restricted product is not a right, but rather, a privilege — a privilege afforded to retailers who will adhere to and enforce the laws, federal and local, associated with age-restricted products,” said Terry McKenna, a principal and founder of Employee Performance Strategies Inc. (EPS). “Additionally, retailers have a responsibility to the communities they serve, in particular to their customers, to be a responsible retailer, a retailer that can be trusted not to sell a restricted product to their customers’ minor children. When a retailer loses the trust of their customers, they have lost everything.”
Retailers need to prepare their employees for how to manage the sale of restricted products to their customers. This preparation includes:
Training: Employees need to understand federal and local laws, how to read a minor’s body language when attempting to make a purchase, what types of IDs are acceptable, what to look for in the IDs, how to know if the ID has been forged or altered, how to be aware of their own body language when declining a sale, and most importantly, how to keep the transaction safe from escalating.
Coaching: “When formal training ends, coaching begins, and coaching never ends,” McKenna said. “Provide corrective feedback in private and praise in public (if the employee is comfortable with public praise). Coaching requires a watchful eye for the desired performance behaviors — reinforce the right behaviors and correct and coach up the wrong behaviors.”
Reward and Recognition: Reward and recognize the right behaviors. This requires retailers to be on the lookout for the right behaviors (coaching). “What gets recognized and rewarded, gets repeated,” McKenna said. “Reward and recognition aren’t always about, nor should they be about, money. A simple, ‘Thank you for a doing a great job. I really appreciate it. It means a lot,’ goes a long way and has a long-term intrinsic value to the employee versus soon-forgotten extrinsic rewards.”
Celebrate: Celebrating successes is a great way to reinforce the right behaviors and sends a strong message to all employees that these are the types of behaviors the company needs to be recognized as a responsible retailer.
Training & Compliance
Still, a lot can go wrong, so managers and corporate human resources managers need to stay on top of training and compliance. Among the biggest mistakes McKenna has seen in his decades of retail guidance is companies not following up and holding employees accountable for the training.
“Just because an employee tells you they viewed the online training program or read your company policy manual on the sale of restricted products doesn’t mean they actually did it,” he said. “Anyone can check off a box or write their initials after a paragraph. Just because your assistant manager says they trained your new hire, how do you know they didn’t fly through the training or take shortcuts? Hold employees accountable by testing their knowledge.”
Another proven tactic for managers to practice with employees is role-playing. For example, McKenna advocates role-playing various illegal sales transactions with employees, so they experience what to do and what to say during the sale of tobacco products. Practice builds confidence. “If there is one aspect of the cashier’s job where they need to feel confident, handling restricted sales is it,” he said. “Understand that this is by no means an easy job, and one mistake can be costly.”
Lou Maiellano, president of TAZ Marketing & Consulting Group, who spent more than 20 years overseeing tobacco sales at Sunoco, Wawa and Mobil, said the federal regulations should actually make it easier for the c-store retailers. “Now the major in-store products such as tobacco, vape and alcohol are part of the same policy: no sales under 21,” he said.
The big issue Maiellano warned against is sting operations at both the federal and local levels.
“For any retailer selling tobacco, I recommend having a written carding policy in place,” he said. “Make sure employees know the policy and document it. Conduct monthly compliance shops to ensure your entire staff is following the company carding policy and asking for ID for anyone who looks 27 and under. This could help you during a sting operation.”
McKenna agreed that preparation is the key for selling tobacco responsibly.
“The biggest piece of advice I can give to retailers is to focus,” McKenna said. “Focus on employee training and ongoing coaching, and focus on the importance of this product category. Even though sales and gross product margin are down compared to years past, tobacco remains a viable business-building category. If a retailer lost the right to sell tobacco, but was given the opportunity to earn that right back, what actions would they take to earn it back? Then take those actions now before you lose the right.”