Tobacco

FDA Issues Proposed Guidance on Sampling Restrictions

NATO's Thomas Briant says coupons, loyalty intersect with rules

MINNEAPOLIS -- The U.S. Food and Drug Administration's (FDA) Center for Tobacco Products has released a proposed guidance document explaining the agency’s recommendations on how retailers, distributors and manufacturers can comply with the federal tobacco regulation that prohibits distributing or giving away free samples of tobacco products. This guidance document is not yet final because the FDA has asked for and will review public comments on the proposed guidance. Once it has reviewed all of the comments submitted by the public, then the FDA will decide whether to make any changes to the proposed guidance document and issue a final version of the recommendations. For a full copy of the FDA guidance document, click here.

It is important to note that the recommendations contained in both the proposed guidance and the final guidance documents are not legally binding on industry members. Rather, a guidance document represents the FDA’s current thinking on the topic of the tobacco-product sampling restrictions. Industry members are allowed to use alternative approaches other than those contained in the guidance document to comply with the prohibition of distributing or giving away free samples.

Background on Free Samples
The Family Smoking Prevention and Tobacco Control Act, the federal law that authorizes the FDA to regulate tobacco products, prohibits the distribution of free samples of all tobacco products regulated by the FDA, including cigarettes, roll-your-own tobacco, smokeless tobacco, cigars, pipe tobacco, e-cigarettes, e-liquids, vapor products, hookah tobacco, nicotine-dissolvable products, nicotine-gel products, and components and parts of tobacco products such as e-cigarette and vapor apparatus (e.g., atomizers). The law exempts the distribution of certain small quantities of smokeless tobacco in a “qualified adult-only facility” that meets a number of specific requirements.

General Rule Prohibiting Free Samples
Generally, the FDA regulations prohibit a retailer, distributor or manufacturer from distributing free samples of tobacco products to consumers except through a sales transaction that involves a consumer paying money for a tobacco product. Providing a free sample to a consumer in exchange for information such as an e-mail address or a telephone number is a prohibited free sample.

Price Promotions, Discounts and Coupons
The FDA guidance states that there are situations in which the sale of a tobacco product at less than full price does not violate the free-sample ban. The FDA guidance includes the following examples:

  1. “Buy one, get one,” “two for the price of one” and any similar combination of buying one or more tobacco products to receive a free tobacco product as a part of the same transaction do not violate the free-sample ban and are allowed. This is the case because the consumer is paying money, so the free tobacco product is not really “free.”
  2. Buy one and receive a coupon redeemable later for a free tobacco product is prohibited unless the retailer, distributor or manufacturer has a method to verify that the person redeeming the coupon is the original purchaser who earned the coupon for a free tobacco product.
  3. Tobacco products can be sold at a discounted price and do not violate the free-sample ban.
  4. Coupons can be redeemed that take dollars or cents off the retail price of the tobacco product, allowing the tobacco product to be sold at a discount.

Membership Loyalty Programs
The FDA guidance document also explains how retailers can offer customers a membership or loyalty reward program. The following examples provided by the FDA apply to these membership or loyalty programs:

  1. Tobacco-product price discounts are allowed in membership and loyalty programs.
  2. Programs where consumers earn points or rewards for purchasing a certain number of tobacco products and then receiving a “reward” of a free tobacco product are allowed provided that the “reward” product is a part of a monetary transaction. For example, if a customer receives a reward of a free tobacco product after five products are purchased, the free reward product would need to be given to the consumer at the time the fifth product is bought or with the sixth or later purchase of a tobacco product. However, the FDA would allow the free reward product to be given free of charge to the consumer without a money transaction if the retailer, distributor or manufacturer has a method to verify that the consumer redeeming the reward is the original purchaser that earned the reward.

Business-to-Business Samples
The FDA guidance also states that the agency does not intend to enforce the free-product-sample ban in a business-to-business transaction where free samples are distributed in limited quantities between a manufacturer and a distributor, a manufacturer and a retailer, and a distributor and a retailer. “Limited quantities” is defined as no more than necessary to achieve a business or marketing goal to make a business aware of a product in order to encourage the purchase of the product.

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