Internet Cigarette Vendor Compliance with State and Federal Government Agreements to Ban Credit Card Payment and Commercial Carrier Shipping for Online Cigarette Sales

Background: Most Internet cigarette vendors (ICVs) offer tax-free cigarettes making them cheaper than those sold at stores. This undermines the impact that higher prices have upon reducing consumption. Most ICV sales violated taxation and youth access laws, leading led to landmark voluntary agreements in 2005 with the major credit card companies and the major private shippers to ban payment transactions and shipments for all Internet cigarette sales. These bans showed promise but left loopholes allowing payment via checks and shipment via other carriers.

Objective: To assess compliance with the payment and shipping bans by making purchases from the 100 most popular ICVs.

Design: An adult buyer placed cigarette orders from each ICV using banned methods.

Results: 29 of 100 orders were placed with (banned) credit cards; 24 were successfully received and the remaining 71 orders were placed with checks (60 were successfully received). Four orders were delivered using banned shippers, and 80 of 84 successfully received orders were delivered by the USPS.

Conclusions: About a quarter violated the credit card ban, and the remainder adapted by accepting checks. Most vendors complied with the shipping ban, but 80% adapted by shipping via another carrier. Better enforcement of the bans is needed and the Prevent All Cigarette Trafficing (PACT) Act has now closed the USPS loophole by making cigarettes non-mailable to consumers. Bans such as these are a promising approach to controlling the sale of restricted goods online.