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The Retailer As Gatekeeper

by Kate Quackenbush | March 1, 2011

As a bridge for consumers seeking healthier lives, retailers have an awesome responsibility. While last year’s GAO investigation produced disturbing results, it prompted a response that has them more prepared than ever to fulfill their role.

The dietary supplement and natural products industry has long suffered criticism for operating without oversight, but this scrutiny has traditionally been reserved for the supply side of the industry—from ingredients to finished product manufacturers. That is, however, until May 26, 2010, when the Government Accountability Office (GAO) revealed its secret shopper report. Then the spotlight was turned on natural products retailers, both brickand- mortar and online.

While the GAO’s results were troubling, they’ve served as a wake-up call. More importantly, that call was met with the same aggressive, preventative action as the products that make up this industry—ensuring that retailers have the understanding to continue being harbingers of health while operating within the limits of the law.

The Road to the Report

Some have expressed that the catalyst for the GAO investigation can be traced back to ephedra and the concern that consumers were not provided warnings about the hazards associated with the use of supplements containing ephedrine alkaloids. Others have said that it’s the natural products industry’s skyrocketing success—over the last five years, in particular—where it has enjoyed significant revenue growth and exposure as millions more consumers are subscribing to natural products and therapies, that has caused federal agencies to consequently step up their monitoring efforts.

“Causation is never singular, and many factors need to be considered to understand the increased scrutiny and regulatory pressure on dietary supplement selling practices. First, Congressional appropriations have increased, providing the funding for increased enforcement actions,” said Stuart Tomc, CNHP, national educator with Nordic Naturals (Watsonville, CA), adding that FDA appropriations have increased from $1.4 billion to $2.3 billion. “In addition, more Americans than ever before are regularly buying dietary supplements. This increased use leads to greater visibility than ever before.

The greater attention being paid to our industry is a sign of our success, and should be taken as such.”

Unfortunately, nothing begets speculation like success.

According to the GAO’s report: “Recent studies have shown that use of herbal dietary supplements— chamomile, echinacea, garlic, ginkgo biloba and ginseng—by the elderly within the United States has increased substantially. Sellers, such as retail stores, websites and distributors, often claim these supplements help improve memory, circulation and other bodily functions.” At the request of the Senate Special Committee on Aging, “GAO was asked to determine (1) whether sellers of herbal dietary supplements are using deceptive or questionable marketing practices to encourage the use of these products, and (2) whether selected herbal dietary supplements are contaminated with harmful substances.”

In the undercover operation, GAO agents posed as elderly shoppers who, in 2009 and 2010, called or visited “a non-representative selection” of 22 health food stores and mail-order supplement retailers in Washington, D.C., and Florida, and secretly recorded their one-on-one conversations with store staff. It also “reviewed the written marketing language used on approximately 30 retail websites.” The GAO focused on consumers over the age of 65 who have been shown to be taking an increasing amount of supplements, 85 percent of whom are on at least one prescription medication a year (with which a supplement could potentially interact).

As was heavily publicized, the GAO was successful in finding a few retailers who stepped over the line while counseling the secret shoppers—from one staffer advising it was perfectly safe to take ginkgo biloba with aspirin to improve memory, to another seller stating that an herbal supplement could be taken instead of a prescribed medication. While it may have only been a few, it was more than enough for GAO to make its case.

“The issue of questionable marketing practices of dietary supplements has been an important one in the industry for years,” said Tomc. “The May 26 GAO report and its media coverage adds new weight to this established issue, and suggests the industry needs to step up its efforts.”

Repercussions and Reaction

According to Val Anderson, executive vice president and director of sales with Mineral Resources International (MRI, Ogden, UT), “These latest actions by the government do not appear to have generated specific actions against those that were caught, but rather as a ploy to undermine the credibility of health food stores and supplements, and to gain more public support for greater government powers.”

Perhaps that’s why associations like the Natural Products Association (NPA) and Council for Responsible Nutrition (CRN) immediately sprang to action to address the concerns raised by the GAO. Steve Mister, CRN president and CEO, gave testimony at the Senate hearing following the GAO report promising that the industry will do more to educate retailers on how to train staff to lessen the incidence of misleading advice from retailers similar to those reported by the investigation. And both NPA and CRN have worked to advise retailers and manufacturers, and make readily available resources—NPA with its “Retailer Toolkit” and CRN with its recently released “Roadmap for Retailers: Safely Navigating What You Say About Dietary Supplements”—so retailers and manufacturers can operate in compliance with the law.

While Tomc expressed that it is not entirely clear who should be held responsible for bogus claims being made about dietary supplements at the point of sale, “the law dictates a seller’s statements about a dietary supplement could result in the product becoming misbranded or deemed an unapproved new drug. In addition, a seller who gives advice about treating a disease is practicing medicine without a license and is thus subject to prosecution under many states’ laws.”

Misrepresenting products to or misadvising customers does, in fact, carry repercussions of which the entire industry needs to be aware, but CRN’s Mister said that this is not a time for retailers to panic about the government beating down their doors. “I had conversations since the hearing and the agency is not making a priority of doing sting operations unless they see a pattern in practice,” he said. “The big risk as a retailer isn’t the FTC (Federal Trade Commission), but state agencies staying abreast of federal concerns. Local health departments or medical licensing boards may keep a watchful eye over their communities. If they discover these practices, a retailer could be subject to state licensing board proceedings because they’re not licensed medical practitioners.”

At the same time, Mister stressed that retailers deliver an important service to customers, and that as they operate within the limits of the law, they can be an even greater resource.

“What our research has told us is that there is a lot of consumer confusion in the aisle. This is where retailers serve an important function,” he said. “This isn’t a time for [retailers] to be stifled. Being educated about what they can and cannot talk about is going to allow them to serve that function even better.”

Responsible Operations

It’s a fine line that retailers walk to best serve their customers, but it is imperative that they remain on the right side of that line. Here VR will begin to address the do’s and don’t’s that retailers need to keep in mind in order to operate not only lawfully, but also effectively for their customers.

Displays and Stocking

A retailer’s role begins with the store itself—what is on the shelf and how it is presented to the customer.

“As gatekeepers, retailers should know their suppliers and manufacturers, and have an idea of what they’re selling,” said industry attorney Steven Shapiro of Ullman, Shapiro & Ullman, LLP (New York, NY). “They should be aware of the bad products on the market (i.e., those containing illegal substances) and make it a point, as responsible retailers, not to sell them.”

“We all have to regularly carefully assess where short-term gains may have negative consequences for long-term viability of ourselves and our industry,” said MRI’s Anderson. “Retailers are in a unique position to support those companies that are working in the long-term interest of themselves and in keeping with the long-term viability of the industry as a whole, and to not support those companies that are acting in ways that are likely to undermine the credibility of all dietary supplements and nutrition.”

In addition, how a product, product literature and third-party literature is displayed is something of which retailers need to be conscious.

“It is one thing, and a good thing, to have a section of literature and information on nutrition in your store. It is another thing, however, to set up a display on your counter or shelves wherein a book and a product are presented side by side with the intention that your customer will associate the book and the product, even though neither you nor your employees has said anything,” explained John Gay, executive director and CEO of the Natural Products Association (NPA).

“Indeed, even if that is not your intention, and although not a single word is said, it is likely that the book or literature will be construed as labeling for the product if there is the remotest connection between the two.”

Setting the Tone

Once shelves are set, it’s time to let the customers in. But before a conversation is had, Lou Paradise, president of Topical Biomedics (Rhinebeck, NY), offered that it’s up to retailers and their staffs to set the tone.

“Anytime a retailer or store staff is approached by a customer with any question, they should have an established framework for the conversation,” said Paradise, “The customer must be told that any discussion regarding questions about products is strictly informational and educational in nature. They should require that the customer understand that.”

This may seem a bit formal, but it is an important differentiation, according to CRN’s Mister.

“Anytime someone in a store starts talking about a specific illness or disease, a retailer can direct to products that may be helpful, but should be clear up front that supplements are not drugs and that the customer not expect them to treat, cure or mitigate disease,” said Mister. “Set this as a baseline expectation for the consumer. You can, however, talk about having some things that may help with their symptoms, such as teas and honey for coughing attacks. There’s a difference between maintaining a healthy system versus a specific symptom and treating an underlying illness.”

Another place that Paradise suggested steering the conversation is whether customers are under a doctor’s care and/or if they are taking prescription medication. “If the customer answers ‘yes,’ he or she should be told they should always check with their doctor before taking any supplement,” he said. “Remember, the FDA recommends that consumers check with their health practitioners before beginning any supplement regimen. If they are not under a doctor’s care and have pain for more than a week, as an example, they should be instructed to go to their doctor for a proper diagnosis.”

The Questions

MRI’s Anderson recognizes that consumers go to specialty retailers specifically because they want the benefit of recommendations from knowledgeable staff, and that their motivation needs to be considered. “Consumers are regularly motivated to action, not because they wish to maintain good health, but because they have the absence of good health. This is where the conflict arises,” he said.

With this in mind, it’s understandable that consumers’ questions can seem loaded.

Linda Ehrke, national sales manager with Enzymedica, Inc. (Port Charlotte, FL), posed a number of common questions retailers may hear, but expressed that all of them warrant the same response.

A few common consumer questions might be:

• My doctor has told me I have arthritis and he wants me to take a prescription drug for my pain and swelling. Do you have something for my arthritis?

• I was recently told I have breast cancer and would like to know how I can treat it naturally before I subject my body to the drugs they are suggesting. What do you recommend?

• I am constantly bloated and can’t seem to get this weight off my abdomen. I think I have some sort of leaky gut. Do you have any products that will help with leaky gut or maybe irritable bowel?

“In virtually all cases, if a customer asks the retailer for a prescription, diagnosis or a solution to treat a disease or illness, the retailer will be out of bounds to answer. Therefore, the best response is to be clear and remind the customer that medical questions should be answered by a medical practitioner,” said Ehrke. “Keep your answers specific to the maintenance and support of structure and function of a healthy body.”

NPA’s Gay also offered helpful examples:

“Retailers may discuss benefits relating to a classic nutrient deficiency disease. For example, vitamin A is essential for healthy eyes and skin,” he said. “Also, how the product or ingredient affects a function or structure of the human body (i.e., glucosamine helps promote connective tissue, echinacea helps support the immune system). Staff can talk about the mechanism of action by which a product acts to maintain body structure or function (i.e., vitamin D helps maintain healthy bones by stimulating the absorption of calcium). And they can point to manufacturer claims that their product promotes general well-being (i.e., multivitamins provide the essential nutrients for your daily needs). Other examples of truthful claims include: calcium builds strong bones and antioxidants protect against cell damage.”

Another avenue that will make retailers a valuable resource relating to disease, according to Anderson, is to allow consumers access to and even training on how to use third-party research “relating to nutrition and disease, and allowing the consumer to find the products with those nutrients on their own,” he said. “This is also allowed under the law.”

And retailers should be sure to lean on their suppliers.

“Ask the manufacturer for educational support regarding their products and if they have a forum for the proper and legal dispensing of information regarding their products,” said Topical Biomedics’ Paradise.

“When I started in this industry, I spent a lot of time researching the quality and efficacy of the products I represented,” said Enzymedica’s Ehrke. “In this way, I was able to provide substantiated information to my customers, and help them make educated decisions on which brands and formulas to buy. Proper training and education are the keys to help retailers maintain compliance.”

Conclusion

The GAO’s report was a wake-up call, but this is no time for retailers to shy away from their responsibilities to their customers out of fear.

“Don’t be afraid to be a retailer. The aisle is where the customer needs your guidance and assistance,” said Mister. “You can help them differentiate between one product and another, decipher labels for the information they’re seeking and help them understand structure function claims. There is a lot you can talk about.”

“If consumers are asking about a specific disease, they should direct them back to their health care provider and instruct them to speak to a doctor,” said Shapiro. “They can, however, discuss structure function statements and direct customers to what’s provided on the label. If a customer is asking about the difference in formulations, they can recommend brands or products based on what’s on the label.”

Finally, Paradise summed up the best preparation for retailers and their staffs: “Educate the store staff to handle every inquiry in a very specific and disciplined framework. Most importantly, customers are looking for people and companies they can trust. They appreciate being properly informed and guided so they can make a well-informed decision,” he said. “The value of enhancing trust and respect builds credibility and integrity with the customer, and we are morally required to provide fact-based, real information. This discipline will also satisfy any agency secret shopper.”

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