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Immediate Compliance Notice: Flavored ENDS (Vape) Merchants – Enhanced Card Brand Enforcement

We have received notice from one of our processing partners regarding increased card brand enforcement related to merchants selling flavored Electronic Nicotine Delivery Systems (ENDS), including flavored vape and e-cigarette products.
 

What You Need to Know

Card brands are increasing scrutiny of merchants that sell flavored ENDS products in jurisdictions where such sales are prohibited, restricted, or otherwise non-compliant under federal, state, or local regulations.
 
Effective immediately, all agents and referral partners must exercise heightened due diligence when onboarding or referring merchants in the vape, e-cigarette, and ENDS space.
 

Agent Requirements

Before submitting a merchant for approval, please ensure:
  • The merchant complies with all applicable federal, state, and local laws governing flavored ENDS products.
  • The merchant is not selling flavored ENDS products in jurisdictions where such sales are prohibited or restricted.
  • Appropriate due diligence is completed to understand the merchant's products, sales channels, and geographic markets.
  • Any concerns regarding product legality or compliance are escalated to Compliance prior to submission.

Important Risk Notice

Merchants identified as selling prohibited flavored ENDS products may be subject to:
  • Card brand fines
  • Compliance assessments
  • Remediation requirements
  • Account restrictions or termination
In addition, referral partners and sales organizations associated with non-compliant merchants may also face increased scrutiny and potential enforcement actions.
 

Common States with Flavor Restrictions

While regulations continue to evolve, agents should pay particular attention to merchants operating in or shipping products to states with significant flavor restrictions, including:
  • California
  • Massachusetts
  • New York
  • New Jersey
  • Rhode Island
  • Utah
Please note that numerous cities and counties across the U.S. have additional local flavor bans and restrictions that may apply even when statewide prohibitions do not exist.
 

When in Doubt

If you are working with a vape, e-cigarette, tobacco, or ENDS merchant and are unsure whether the products being sold are compliant, do not submit the application until Sales Support has reviewed the account.
 
Please contact the Sales Support Department with any questions regarding merchant eligibility, prohibited products, or underwriting requirements.
 
Thank you for your immediate attention and cooperation as we work to ensure compliance with card brand and regulatory requirements.

Envoy Business Systems