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 2,000 shopper-strong 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.

Gadgets – TechCrunch

Juul launches a pilot program that tracks how Juul devices get in the hands of minors

Juul Labs is today launching a pilot for its new Track & Trace program, which is meant to use data to identify exactly how Juul devices wind up in the hands of minors.

Juul vaporizers all have a serial number down at the bottom, by the Juul logo. However, it wasn’t until recently that Juul had the capability to track those serial numbers through every step of the process, from manufacture to distribution to retail to sale.

With Track & Trace, Juul is calling upon parents, teachers and law enforcement officials to come to the Juul Report web portal when they confiscate a device from a minor and input the serial number. Each time a device is input in the Track & Trace system, Juul will open an investigation to understand how that minor wound up with that device.

In some cases, it may be an issue with a certain retail store knowingly selling to minors. In others, it may be a case of social sourcing, where someone over 21 years of age buys several devices and pods to then sell to minors.

Juul will then take next steps in investigating, such as talking to a store manager about the issue. It may also enhance its secret shopper program around a certain store or distributor where it sees there may be a spike in sale/distribution to youth to identify the source of the problem. To be clear, Track & Trace only tracks and traces the devices themselves, and does not use personal data about customers. It’s also worth noting that Juul Labs has increased

Juul isn’t yet widely publicizing Track & Trace (thus, the “Pilot” status), but it is focusing on Houston as a testing ground with banner ads targeted at older individuals (parents, teachers, etc.) pointing them to the portal. Of note: the ad campaign is geofenced to never be shown in or around a school, hopefully keeping the program a secret from young people illegally using Juul.

The company wants to learn more about how people use the portal and test the program in action before widening the campaign around Track & Trace. That said, the Report portal is not limited to Houston residents — anyone who confiscates a Juul can report it through the portal and trigger an investigation.

“It’s important to note that the pilot is an opportunity for us to learn how the technology is working and optimize the technology,” said Chief Administrative Officer Ashley Gould. “It’s not just at the retailer level. It’s a whole process through the supply chain to track that device and find out if everyone who is supposed to be scanning it is scanning it, and the software that we’ve created to track that serial number through the supply chain to the retail store is working. The only way we’re going to know that is when someone puts in the serial number and we see if we have all the data we need to track it.”

According to Juul, every device in production will be trackable in the next few weeks. In other words, Juul vapes that are years old are likely not fully traceable in the program, but those purchased more recently should work with the system.

Juul has been under scrutiny from the FDA and a collection of Republican Senators due to the device’s rise in popularity among young people. Outgoing FDA Commissioner Scott Gottlieb has called it “an epidemic” and enforced further restrictions on sales of e-cig products.

Juul has also made its own effort, removing non-tobacco and non-menthol flavored pods from all physical retail stores, enhancing their own purchasing system online to ensure online buyers are 21+ and not buying in bulk, going after counterfeits and copycats posing as Juul products, and exiting its Facebook and Instagram accounts.

But Juul Labs also committed to build technology-based solutions to prevent youth use of the product. Cofounder and CPO James Monsees told TechCrunch at Disrupt SF that the company is working on Bluetooth products that would essentially make the Juul device as smart as an iPhone or Android device, which could certainly help lock out folks under 21.

However, the Track & Trace program is the first real technological step taken by the e-cig company. And it’s been an expensive one. The company has spent more than $ 30 million to update its packaging, adjust printing standards, changing manufacturing equipment, and integrate the data and logistics software systems.

For now, Track & Trace is only applicable to Juul vaporizers, but it wouldn’t be shocking to learn that the company was working on a similar program for its Juul Pods. 

Gadgets – TechCrunch

The FDA is cracking down on Juul e-cig sales to minors

The FDA has its eye on Juul Labs, the e-cigarette company that has captured nearly half of the $ 2 billion e-cig market.

Yesterday, the U.S. Food and Drug Administration Commissioner Scott Gottlieb announced a new initiative called the Youth Tobacco Prevention Plan. While the agency is focused on making sure kids don’t have easy access to any e-cigs, the Juul vaporizer seems to be of particular concern to them.

As part of the initiative, the FDA has sent a request for information to Juul Labs in an effort to understand why young people are so attracted to the product.

Over the past year, a number of reports have suggested that teen vape use, especially with the Juul, is steeply on the rise.

The request is for documents related to “product marketing; research on the health, toxicological, behavioral or physiologic effects of the products, including youth initiation and use; whether certain product design features, ingredients or specifications appeal to different age groups; and youth-related adverse events and consumer complaints associated with the products.”

In response, Juul Labs issued a press release announcing its plan to combat underage use. The strategy includes an initial investment of $ 30 million over the next three years going towards independent research, youth and parent education and community engagement efforts. Juul Labs also said it will support federal and state initiatives to raise the legal minimum purchase age to 21+. The company website has required that purchasers be 21 or older since August 2017.

Here’s what Juul CEO Kevin Burns had to say about it:

Our company’s mission is to eliminate cigarettes and help the more than one billion smokers worldwide switch to a better alternative. We are already seeing success in our efforts to enable adult smokers to transition away from cigarettes and believe our products have the potential over the long-term to contribute meaningfully to public health in the U.S. and around the world. At the same time, we are committed to deterring young people, as well as adults who do not currently smoke, from using our products. We cannot be more emphatic on this point: No young person or non-nicotine user should ever try JUUL.

Juul Labs is not the only organization that the FDA is cracking down on. The agency said it had sent out 40 warning letters to retailers selling e-cigs, including the Juul, to minors. Some of those retailers were caught as the result of a ‘blitz’ that has been underway since the beginning of April.

The agency has also asked eBay to take down all listings of Juul vaporizers, which run the risk of being sold to minors.

Alongside the FDA’s request for information from Juul Labs, the agency is also sending out similar letters to other e-cig manufacturers.

Gadgets – TechCrunch