PILOT STUDY OF RACS PROGRAM SHOWS DRAMATIC IMPROVEMENT IN RETAILER COMPLIANCE

Research & Analysis, Underage Use Prevention

October 10, 2019

In August of this year, we implemented a series of new measures in the United States designed to build upon our efforts to combat youth access, appeal, and use of JUUL products and across the category. As part of that announcement, we launched JUUL Labs’ Retail Access Control Standards (RACS) program, a standards-based program tied to a retailer’s point-of-sale system which automatically locks when a JUUL product is scanned and remains locked until a retailer electronically scans a valid, of-age government-issued I.D. to verify both the age and I.D. validity. A RACS-compliant system also limits the amount of product that can be purchased in a single transaction, a policy designed to cut down on social sourcing and illegal third-party sales to underage users. JUUL Labs is the only vapor product company in the U.S. to require its retailers to maintain a mandatory bulk purchase policy which limits each transaction to one device and four refill kits.

Today, the company presented a poster at the 7th Annual Vermont Center on Behavior & Health Conference summarizing the results of a RACS pilot study conducted across a subset of regional convenience stores. The pilot study was designed to assess the system’s effectiveness in improving compliance rates and to monitor its implementation in a real-world setting. Participating retail outlets updated their point-of-sale systems to be RACS-compliant and trained store employees to follow RACS requirements for age verification and bulk-purchase limits. A third-party vendor conducted the pilot study.

From May to June 2019, a total of 3,990 compliance checks were conducted at 171 participating stores, 2,219 in the month prior to the implementation of RACS and 1,771 after implementation of RACS. An age-verification failure post-installation was defined as failure of the retailer to check a customer’s I.D., failure of the RACS system to require scanning of the I.D. prior to purchase, or failure of the RACS system to reject fake, expired, or otherwise invalid I.D.s. A bulk purchase failure post-installation was defined as failure of the scanning system to limit bulk purchases, or a retailer knowingly allowing an individual to complete two or more back-to-back transactions designed to evade the bulk purchase limits.

For both age-verification and bulk-purchasing audits, failure rates dropped drastically after implementing RACS.

• For age-verification compliance, the overall failure rate fell from 36.8% for JUUL purchases before implementing RACS to 0.2% after implementation.
• For bulk-purchase compliance, the overall failure rate fell from 29.3% for JUUL purchases before implementing RACS to 1.0% after implementation. 
• 734 of 2,219 compliance checks resulted in an age-verification or bulk-purchase failure before implementation, while only 11 of 1,771 compliance checks resulted in an age-verification or bulk-purchase failure after implementation.
  • The two age-verification failures were attributable to store clerks scanning their own I.D.s on behalf of the customer.
  • Eight of the bulk-purchase failures were attributable to technical issues, including disabling of the feature, and the remaining failure was attributable to a store clerk allowing back-to-back transactions.

As previously announced, JUUL Labs’ leadership team, under the direction of newly-appointed CEO K.C. Crosthwaite, is overseeing a broad review of the company’s practices and policies to ensure alignment with its aim of responsible leadership within the industry. The preliminary evidence from this pilot study is compelling and demonstrates RACS can be an important component of a larger comprehensive youth-prevention framework that also incorporates marketing restrictions and additional controls.