Juul introduces new POS standards to restrict sales to minors

Juul Labs, the e-cigarette behemoth partially owned by Altria, has today announced a new POS age-verification system that it will require all Juul retailers to comply with by May 2021.

The Retail Access Control Standards program, or RACS for short, raises the standard for age-restricted POS systems, automatically locking the POS each time a Juul product is scanned until a valid, adult ID is scanned. The system also looks for bulk purchases (four four-count packs of Juul Pods is the legal limit for a single transaction) and locks when the fifth Juul Pod pack is scanned, automatically removing the fifth pack from the customer’s cart.

Thus far, more than 50 retail chains, which represents 40,000 outlets, have committed to switching over to RACS, with 7,000 stores in the process of switching now and 15,000 to have implemented the technology by 2019’s end. The deadline for switching over to the RACS system is May 2021, at which point Juul will only sell its products to RACS-compliant retailers.

The company recognizes that overhauling a POS can be costly and difficult, and is offering $100 million+ in incentives to retailers who switch over. For retailers with newer POS systems, the switch might only require a software update, while others may need to update their hardware, as well.

Now, the system isn’t foolproof. After an ID is scanned, all personal information is automatically deleted from the system, which means that bad actors/unauthorized resellers could amass a bulk amount of Juul products by visiting various stores or returning to the same store multiple times.

However, this is likely just the beginning for the RACS program, which for the first time gives Juul much more control around how their products move through the market, ultimately limiting the opportunity for Juul products to end up in the hands of minors.

Alongside the introduction of RACS, Juul is also expanding the Track & Trace program it piloted in April in the Houston area.

Track and Trace allows teachers, parents, law enforcement and otherwise responsible adults to log the serial number of confiscated Juul devices, giving Juul the information it needs to track that device through the supply chain and identify the store where it was sold.

Using Juul’s secret shopper program, the company can then specifically target those stores and shut down the illegal sale of Juul devices to minors.

Today, Track and Trace is expanding nationwide in the U.S.

While these are major steps in combating underage use of Juul products, the company itself admits that it believes youth vaping numbers will continue to rise.

From the release:

It is our expectation that this year’s survey, unfortunately, will likely show continued growth in youth use of vapor products in the U.S. If this turns out to be the case, it will be due in part to the fact that:

• When this year’s NYTS data was collected, T21 laws were being passed in a dozen states but had not been implemented
• Little to no category-wide actions have been taken as FDA is finalizing its guidance that, once implemented, should impose additional restrictions on the sale and marketing of certain flavored vapor products — actions that we voluntarily imposed on ourselves last November

In November 2018, Juul announced its Youth Prevention Plan ahead of the FDA’s crackdown on e-cig products. It included the ban of flavored Juul pod sales in convenience stores and other Juul-approved retailers, limiting the sale of non-tobacco and non-menthol flavored pods to its online storefront. Juul says this represented 50 percent of its revenue at the time. The company also took down its Facebook and Instagram pages, and revamped its Twitter to ditch any promotional or marketing content from the platform.

Still, even with the many steps the company has taken to limit youth use of the product, one of Juul’s biggest obstacles is the sale of counterfeit and infringing products, which may include dangerous and/or unknown chemicals. The company hired former Apple employee Adrian Punderson to help lead the fight against counterfeits in February.

As of December 2018, Juul was reportedly valued at $38 billion, estimated to own more than 70 percent of the e-cig market.