Private companies putting up barriers is the new frontier for anti-tobacco rules. Big business wants to control what you can and cannot sell, they want to control what products are suggested to you and influence the decisions you make in your daily lives. With government legislation and regulations, PCA has the power to step in before things get too far, but with private companies, one day a tobacconist can be in good standing, and the next day their point of sale, bank account, website and network services can be taken away even if they are selling legal products to legal adults.
Government entities are largely accountable to voters and thus can feel the pressure from associations and their membership. With private companies or even non-governmental non-profits it can be extremely difficult in even identifying the party causing a disruption in service or finding a particular person within an organization that can reverse a decision. PCA has increasingly had to adapt to not only facilitate member inquiries to government entities, but also engage in casework with private companies, non-profits, and other associations when they are creating barriers for our membership to do business. Furthermore, anti-tobacco interest groups are engaging other organizations to do their bidding when government doesn’t go far enough. If you can’t pass a smoking ban, why not get a private entity to withhold a certification if they do not prohibit smoking? If you can’t pass a remote sales ban, why not get point of sales systems and credit card processors to prohibit transactions? The list of examples goes on and on.
With PayPal in the news, it is timely to address their “T.O.S” or “Terms of Services”
Acceptable Use Policies
Under PayPal’s Acceptable Use Policies, several provisions are being used to restrict a premium tobacconist from using their payment services. These restrictions are for in-person and online transactions.
Prohibited Activities:
- Products that present a “risk to consumer safety”[1]
- Cigarettes
- Drug paraphernalia (could include rolling papers, certain pipes and hookah)
- Relate to transactions involving any activity that requires pre-approval without having obtained said approval. (age verification proof and arbitrary prior approval from PayPal)
- Activities Requiring Approval[2]
- #15 Tobacco products (not cigarettes [fully restricted by PayPal])
With proper prior approval from PayPal, premium tobacconists should be able to use their services for payment processing. All questions about prior approval can be sent to PayPal’s restricted accounts services division here: https://www.paypal.com/us/business/contact-sales
With that said, PayPal has still arbitrarily been restricting tobacconists who use their services. This is the classic example of private companies waging their own fight against tobacco as a whole. Restricting products that pose a “risk to consumer safety” seems to be overreaching. If PayPal wants to restrict products that pose such a risk, they should provide evidence that the restricted products pose that kind of risk. The facts and the evidence on premium cigars has shown that, due to the patterns of use and the lack of inhalation, there is a negligible amount of risk that comes with smoking premium cigars.
The ‘prior approval’ process is an opaque review of a company to determine if they present a so-called “risk to consumer safety”. There is a lack of guidance on what would drive PayPal from not approving a store from gaining prior approval.
The other aspect to PayPal’s implementation is that many website hosting services are partnered with them to offer the customers the option to check out using their service. This is a further restriction, because if a store is using certain web hosting sites, they would need to gain the prior approval from PayPal, or they risk having their website taken down without notice. Even if the web hosting service is okay with hosting a tobacco related business, PayPal and other checkout options could pull the rug out from under the business, again, without notice.
PayPal continues to put restrictions on businesses that are trying to use their services. It seems to be working out for them:
References
Paypal Acceptable Use Policies, 2022, https://www.paypal.com/us/webapps/mpp/ua/acceptableuse-full
“PayPal Holdings Inc (PYPL) Stock Price & News.” Google Finance. Google. Accessed October 11, 2022. https://www.google.com/finance/quote/PYPL:NASDAQ?sa=X&ved=2ahUKEwj1x5Cdvtj6AhU1FVkFHS_CBT0Q3ecFegQIGhAi.
[1] PayPal Acceptable Use Policies, 2022
[2] PayPal Acceptable Use Policies, 2022
[3] “PayPal Holdings Inc (PYPL) Stock Price & News.” Google Finance.