Illegal Vapes Dominate 80% of U.S. Market With $11B in Sales

Iowa Attorney General Brenna Bird has urged major credit card companies to block transactions for illegal vape products, citing their dominance in the U.S. Market and associated public health risks.

Bird’s call, made public in mid-April 2026, targets Visa Inc., Mastercard, American Express, and other payment processors, asking them to implement safeguards that prevent the use of their networks for purchasing unregulated electronic cigarettes. The coalition supporting her position estimates that illicit vape products account for over 80% of the U.S. E-cigarette market, generating more than $11 billion in annual sales.

These figures, cited by Bird’s office and referenced in her public statement, align with concerns raised by federal health officials about the proliferation of flavored vaping products that bypass FDA authorization. The U.S. Food and Drug Administration has not approved any disposable or flavored vape products for sale, yet such items remain widely available online and in retail outlets, often marketed to minors.

The Iowa Attorney General’s office emphasized that credit card networks play a critical role in enabling these sales, particularly through e-commerce platforms where age verification is inconsistent or easily circumvented. By blocking transactions for known illegal vape vendors, payment processors could disrupt supply chains without requiring new legislation.

Bird pointed to precedents where payment companies have restricted transactions for other high-risk goods, including opioid paraphernalia and certain tobacco products, arguing that similar measures are both feasible and appropriate for unlawful vaping items.

Visa Inc. Has not publicly responded to Bird’s specific request as of April 2026. However, the company maintains a global acceptable use policy that prohibits the sale of illegal goods and services through its network. Visa’s policy includes restrictions on products that violate local, state, or federal law, which would encompass unauthorized vape products under current FDA regulations.

Industry analysts note that enforcing such bans presents technical and operational challenges. Identifying vape-related transactions requires monitoring merchant category codes (MCCs) and transaction descriptors, which can be obscured or misrepresented by illicit sellers. Some vendors use generic retail codes or third-party payment gateways to avoid detection.

Despite these hurdles, Bird’s office argued that payment networks have both the incentive and the capability to act, particularly given increasing scrutiny from state attorneys general and federal regulators over youth vaping trends. The Campaign for Tobacco-Free Kids reported in early 2026 that over 2.5 million U.S. Middle and high school students used e-cigarettes, with disposable flavored devices being the most popular.

Legal experts caution that while credit card companies can enforce their own terms of service, outright bans on legal products could raise antitrust or fair access concerns. However, since no flavored or disposable vape product currently has FDA marketing authorization, all such items are legally prohibited from being sold in the United States, strengthening the legal basis for payment restrictions.

As of late April 2026, no major credit card network has announced a new policy specifically targeting vape sales in response to Bird’s appeal. The Iowa Attorney General’s office said it is continuing discussions with payment industry representatives and exploring multistate coordination to amplify pressure on networks to act.