Study Finds Drop in Online Sales of Cigarettes
Shipping restrictions and credit card ban have worked, researchers say
FRIDAY, Feb. 25, 2011 (HealthDay News) -- A 2005 voluntary federal ban on the use of credit cards to buy cigarettes online, coupled with a ban on all commercial shipping of such purchases within the United States, has effectively curtailed the popularity of Web sites that sell cigarettes, new research reveals.
The ban was the result of an agreement involving major credit card companies and private shippers, such as UPS and FedEx, made primarily to address the widespread flouting of cigarette taxation online.
"Most Internet vendors offer tax-free cigarettes, making them cheaper than those sold at stores," the study's lead author, Kurt Ribisl, an associate professor of health behavior and health education at the University of North Carolina, explained in a university news release. "This undermines the impact that higher prices have on reducing smoking."
The agreement was also put in place to cut back on the sale of cigarettes to minors, Ribisl said, citing the generally weak age-verification methods of online merchants.
To gauge the impact of the ban, Ribisl's team analyzed the sales history of hundreds of online cigarette vendors in the year before and two years after the ban took effect.
Post-ban, the team found, many of the online venders had shut their virtual doors, and the 50 most popular sites had experienced a 3.5-fold drop in customer traffic. Even before the end of 2005, Web site visits had dropped by 1.25 million a month, according to the study, published online in PLoS One.
Of the online cigarette vendors still in business, the number that accept credit cards or the payment system called PayPal has dropped from nearly 100 percent to just over 37 percent, the study found. And, fewer than 6 percent offer commercial shipping, compared with about 32 percent earlier.
That said, alternate payment and shipping options became more popular to make up for banned transactions, the researchers found, with an increase in personal checks for payment and the U.S. Postal Service, which was not part of the initial ban, for shipping. A federal law passed in 2010, however, defined tobacco as "non-mailable matter" via the postal service.
"This promising approach to controlling the sale of restricted goods online has implications for regulating other products, such as alcohol, firearms, quack cures and medicines sold without a prescription," Ribisl said.
The U.S. Alcohol and Tobacco Tax and Trade Bureau has more on cigarette marketing and the Internet.