IV. RECOMMENDATIONS FOR RESPONSIBLE RETAILING

Despite the efforts by the retail industry outlined above, the overwhelming evidence shows that, when presented with an underage customer attempting to purchase cigarettes, most retailers are as likely to violate the law as they are to comply with it. The Attorneys General believe that this does not constitute adequate compliance with the law. Society should not tolerate this level of disregard for any important law, and certainly not open disregard for laws that so strongly affect the well being of future generations. Retailers have a duty to tackle this problem affirmatively, not simply because the law requires it, but because they are in the best position to reduce minors' access to tobacco. To be effective, retailers must do more to prevent illegal underage sales. If they cannot, or will not, control these sales through their own initiative, society will inevitably impose stronger measures, through legislation or litigation, to insure that they do.

Fortunately, based on our meetings with major retailers and trade associations, the Working Group is convinced that many in the retailing community are willing to do more to address this problem. Many are beginning to re-examine the issue, and some are implementing creative approaches to better comply with the law. But much more needs to be done. The Working Group believes that responsible retailers can significantly reduce illegal sales by implementing the following policies.

1. USE SECRET SHOPPERS TO MONITOR EMPLOYEE COMPLIANCE WITH THE LAW, AND REWARD EMPLOYEES WHO COMPLY

At least one company told us, and we agree, that the most effective thing a retailer can do to prevent illegal tobacco sales to minors is to use a "secret shopper" program to test its stores for compliance. Secret shoppers are employees who visit company stores, posing as customers, to assess how the store is maintained and managed and to test for employee honesty. Almost every company we met with uses secret shoppers as a routine part of its business; monitoring everything from product placement to restroom cleanliness. While several companies had used their secret shoppers to monitor their stores' compliance with laws prohibiting alcohol sales to minors, only one had used these programs to test for illegal tobacco sales.

Retailers acknowledged that simply notifying employees that a company uses a secret shopper system is itself a powerful deterrent to unlawful employee conduct. If workers know their employers are using young undercover decoy shoppers to test whether they are selling tobacco to underage buyers, it is far less likely that such sales will take place. In addition, if attractive rewards are offered to employees who comply with the law and swift disciplinary measures are taken whenever there is a violation, word will quickly spread that the company takes the problem of illegal cigarette sales to minors seriously. Although the Working Group believes that state and local law enforcement efforts must also be increased, the private sector is in the best position to actively monitor and control its own compliance with the law.

Moreover, the Working Group believes these programs will have an additional beneficial effect, in that they will educate senior managers about the widespread nature of the violations of law occurring today. The Working Group was struck by retailers' lack of awareness of the problem, and by their frequent insistence that, whatever the situation in others' facilities, violations in their own stores were uncommon. Despite the apparent sincerity of these beliefs, overwhelming evidence has shown that violations are common, if not the norm, in most stores. In-house secret shopper programs will help company executives face the facts about their own company's conduct and, the Working Group believes, may be the essential first step toward effective change.

2. PROGRAM EXISTING ELECTRONIC PRICE SCANNERS WITH TOBACCO "LOCKS" TO HELP CONTROL TOBACCO SALES

The concept of programming electronic price scanners to interrupt the purchase of tobacco products, by prompting sales clerks to check the customer's identification, and requiring the cashier to key in an override code to proceed with the customer's other purchases, was the most innovative approach to preventing underage tobacco sales that the Working Group encountered in its review. Some scanners now being used for this purpose offer an added benefit in that, when they prompt a cashier to check identification, the scanners also display the last acceptable date of birth (i.e., the date 18 years prior to the date of the transaction). This spares cashiers the burden of making frequent and ever-changing mental calculations while under pressure to serve a line of impatient customers. Some of these scanners have also been programmed to require the cashier to key in the customer's birthdate or some other data to confirm that the cashier did in fact, examine identification.

These innovations demonstrate that the private sector has the resources and creativity to develop effective new techniques for reducing tobacco sales to minors. The Working Group strongly recommends that retailers who use electronic scanners program these machines to "lock" when a tobacco product is scanned and to prompt the cashier to check for identification. This enhancement significantly improves a retailer's ability to prevent illegal sales. Because many cashiers are teenagers themselves, they are often reluctant to ask their peers for age identification. By requiring them to do so, the scanner not only serves as a reminder, but actually removes some of the burden on a young employee who must request identification from, or refuse a tobacco sale to, one of his or her peers.

3. EXPEDITE THE USE OF PRICE SCANNER SYSTEMS WITH TOBACCO "LOCKS"

Many companies indicated they were considering switching from their current cash register systems to price scanning devices. Because scanners with tobacco "locks" offer an excellent means of reducing illegal tobacco sales, the Working Group recommends that these companies expedite their plans to switch to scanner systems and only consider scanners that can be programmed to cue for age identification whenever tobacco products are scanned.

4. DEVELOP EFFECTIVE TRAINING ON AVOIDING ILLEGAL TOBACCO SALES TO MINORS, AND GIVE THIS TRAINING EQUAL EMPHASIS WITH THAT GIVEN TO TRAINING ON AVOIDING ILLEGAL ALCOHOL SALES

Underage tobacco sales have been neglected in most retail training programs regarding age-restricted products. Although the majority of training programs include detailed instruction on preventing illegal alcohol sales to minors, illegal tobacco sales are often mentioned only as an aside, and sometimes not at all. Tobacco retailers should immediately redesign or develop training programs that emphasize the importance of compliance with laws prohibiting tobacco sales to minors. At a minimum, these training programs should include:

- a clear definition of what constitutes a tobacco product (including
  smokeless tobacco)

- the legal age for purchase

- instructions on when and how to ask for identification

- age identification checks for any customer who appears to be less than 26     years old

- instruction on the acceptable forms of identification

- written materials that include samples of acceptable identification

- instruction on how to detect false identification

- instructions on when and how to refuse a sale

- instructions on how to refuse second-party sales (where an adult clearly
  purchases for a minor)

- the consequences of making an illegal sale

After completing training, all employees should be tested to ensure they understand what they have been taught. They should also be required to sign an acknowledgment that they understand that tobacco sales to minors are illegal, they will comply with these laws and the company may fire them if they fail to comply.

5. HOLD STORE MANAGERS ACCOUNTABLE FOR THEIR STORES' COMPLIANCE WITH THE LAW

Mystery shoppers, scanners with tobacco locks and training programs are all geared toward improving compliance by cashiers and sales clerks. However, many existing state laws hold only the individual involved in the sale, and not the store manager or corporation, responsible for illegal tobacco sales to minors. The Working Group believes that, in order to really improve compliance, retailers need to make their store and corporate managers accountable for the company's compliance with state laws banning tobacco sales to minors. Managers who know they will be held responsible for violations, and who risk losing their jobs if tobacco is illegally sold to minors in their stores, will do a much better job training and supervising their employees with respect to this issue.

6. KEEP TOBACCO PRODUCTS BEHIND THE SALES COUNTER OR IN LOCKED CASES

By keeping tobacco products off the open shelves, retailers can discourage underage buyers. Many retailers told us that, to cut down on theft problems, they keep cartons of cigarettes behind the counter and single packages of cigarettes at the register. By relocating tobacco products so that minors do not have easy access to them, retailers can reduce the possibility of illegal sales as well as shoplifting. Very young buyers in particular, are less likely to shop for tobacco products in stores where they have to call attention to themselves by asking a clerk for the product. Although some retailers told the Working Group that it would be difficult or expensive to place tobacco in locked cases or behind the counters in their stores, many of these same companies are voluntarily doing precisely that when it serves as a deterrent to shoplifting. We believe that compliance with no-sales-to-minors laws is every bit as important as preventing theft, and  tobacco should only be sold from these controlled settings.

The Working Group understands that many retailers are reluctant to place tobacco products behind the counter because they will then lose the substantial fees that tobacco companies pay to have their products prominently displayed on the open shelves. Tobacco companies could play a key role in keeping tobacco out of the hands of minors by offering those same financial incentives to retailers who sell tobacco only from controlled locations.

7. DO NOT SELL SINGLE CIGARETTES EITHER IN OPEN DISPLAYS OR FROM BEHIND THE COUNTER

Despite the federal prohibition on selling tobacco without the required warning label, retailers sometimes remove cigarettes from their original packages and sell them individually. These single cigarettes or "loosies" are often kept behind the counter rather than displayed, and are much more likely to be sold to minors than to adults. At 10 to 20 cents each, single cigarettes can be very attractive to price sensitive youngsters. Their low cost and easy access may actually encourage children, who might otherwise not have the opportunity, to experiment with tobacco.

The Working Group has been advised that some tobacco companies are now considering packaging single cigarettes in individual wrappers, with the federally mandated warning, so they can legally market this product themselves. Regardless of how they are packaged, because of their particular allure for children, the Working Group believes retailers should not sell single cigarettes at all.

8. POST PROMINENT SIGNS TO REINFORCE THE LAW

During the course of this investigation, the Working Group has had an opportunity to review a wide variety of signs, store displays, buttons and legal time clocks that retailers use to notify the public about age restrictions on tobacco sales. In one focus group study, conducted by a major national convenience store chain, young adult smokers said that as minors, they avoided shopping for tobacco in stores that posted signs warning that the store checked for age identification. Signs saying "NO ID - NO SALE" were viewed as more effective than those that simply announce it is against the law to sell tobacco products to persons under 18 years of age. Some stores also post a "legal time clock," which changes daily and displays the last acceptable date of birth for a legal sale. For example a legal time clock might say:

IF YOU WERE BORN AFTER

JANUARY 1, 1978

IT IS ILLEGAL TO SELL TOBACCO TO YOU IN THIS STATE.

WE CHECK ID

These legal time clocks, which have been widely used to control illegal alcohol sales, notify minors that is the retailer's policy to check identification. They also make it easier for clerks to determine whether an identification is acceptable. The Working Group believes these devices should also be used to prevent illegal tobacco sales.

Some jurisdictions already require retailers to display signs disclosing age restrictions on tobacco sales. Some retailers also have their cashiers wear buttons reminding customers, at the point of sale, that tobacco purchases require proper identification. Even without a legal requirement, the Working Group believes that, given the small cost involved in signage, and its potential deterrent effect, all tobacco retailers should prominently post signs notifying the public that they do not sell tobacco products to any one under the legal age, and they require and check age identification.

Focus group studies also show that minors are less likely to attempt to purchase tobacco in stores where there is a surveillance camera behind the cash register. Since many stores already utilize these cameras for security reasons, the Working Group recommends more widespread use to deter illegal tobacco sales. Also, used in conjunction with in-house secret shopper programs, surveillance cameras make it easier for companies to monitor the conduct of their employees and to hold managers responsible for non-compliance.

9. REMOVE CIGARETTE VENDING MACHINES FROM RETAIL STORES

Vending machines provide the best source of cigarettes for very young smokers. In a study commissioned by the vending machine industry, 13 year olds were 11 times more likely to purchase tobacco from vending machines than 17 year olds. Because very young children rely heavily on vending machines as a major source of tobacco products, and because their use of these machines is difficult to police, retail stores should remove cigarette vending machines from their premises and sell tobacco products only from the controlled settings recommended above. At a minimum, such vending machines should require special tokens, that can only be purchased from a store manager, or be programed to operate only if a cashier activates the machine from a remote control switch.

10. REQUIRE PROOF OF AGE, IN THE FORM OF A RELIABLE PHOTOGRAPHIC IDENTIFICATION FOR ANYONE WHO APPEARS TO BE 25 OR YOUNGER

The training films used by some of the retailers with whom we met graphically demonstrate how difficult it is to accurately determine the age of a customer. For precisely that reason, many retailers instruct their employees to check the identification of anyone who appears to be younger than 26, or even 30 years old, before selling them tobacco. The Working Group believes that all retailers should follow this model and request identification from every customer who does not appear to be of a "base age," which the Working Group believes should be, at a minimum, 26 years old.

Some retailers are very restrictive about the type of identification they will accept as proof of age, while others will accept any document bearing a purported birthdate. Because of the proliferation of forged identifications, retailers should restrict acceptable identification to those that are the most reliable, primarily government issued photo identifications such as drivers' licenses, state issued identification cards, military identification cards and passports. States could make the process of scrutinizing identification easier for retailers by color coding them, or otherwise marking drivers licenses to make it easy to distinguish the license of individuals under 18 or between the ages of 18 and 21. Employees should also be instructed to check the date of birth closely to make sure that it has not been altered; to check to see if the description on the identification matches the customer; and to examine the photograph to see if it matches the customer or has been tampered with. Guidebooks, which include photographs and descriptions of sample drivers' licenses from each of the 50 states, should also be made available as a reference at the cash register.

11. REMOVE ADVERTISEMENTS, IN-STORE DISPLAYS AND PROMOTIONAL ITEMS THAT ENCOURAGE MINORS TO BUY TOBACCO

At the same time that the states are wrestling with methods to improve their enforcement of laws prohibiting the sale of tobacco to minors, tobacco companies are engaging in multi-million dollar advertising campaigns designed to make smoking particularly attractive to adolescents. Retailers who are sincere in their desire to support laws restricting the sale of tobacco products to minors should not undercut these laws by posting advertisements or offering special promotions that target youth. At least two oil companies have already directed their corporate owned gas stations to remove these types of advertisements and promotions; and the Working Group recommends that others retailers follow their lead. While tobacco companies deny that any of their promotions are designed to appeal to minors, the Working Group believes that retailers, using their own good judgment and common sense, can identify those promotions which have a particular appeal for youth.

12. IN THE ALTERNATIVE, RETAILERS WHO PREFER NOT TO TAKE PROACTIVE STEPS TO PREVENT ILLEGAL SALES SHOULD CONSIDER SIMPLY ELIMINATING TOBACCO FROM THEIR STORES

Some of the retailers with whom we met indicated that, because tobacco comprised only a small part of their business, they are not able to spend resources on improved training or scanner technology designed to decrease illegal sales to minors and are not willing to place the product behind the counter or display age restriction signs unless required to do so by law. The Working Group believes that a retailer who is not able or willing to take the serious steps necessary to improve compliance with the law should consider eliminating tobacco products from its stores altogether.

The Working Group, in particular, recommends that pharmacies give strong consideration to eliminating tobacco from their store inventory. Such a move would send a strong message to youth that tobacco products are incompatible with good health. Dozens of individual drugstore owners in New York, Utah, Washington and other states have opted to go tobacco free on their own initiative. In Michigan a coalition of pharmacists, physicians, a pharmaceutical company and the Department of Health have recently undertaken an effort to discourage pharmacies from selling tobacco (under the banner of the "Tobacco-Free Pharmacy" campaign) and as of October 1993, more than 60 pharmacies were participating in the program. In Minnesota, where the state pharmacists' association has recommended since 1987 that its members discontinue the sale of tobacco, an estimated 100 independent pharmacies have taken tobacco off their shelves. In Connecticut, a chain of 40 drugstores operated by the Arrow Corporation have also voluntarily gone tobacco free.