As is the case with other informal markets for re-sold goods, this survival economy operates outside of state laws and municipal regulations, and is subject to penalties (the City of Chicago’s fine for the sale of unstamped cigarettes ranges from $2,000 to $10,000) as well as criminal prosecution.
Gwendolyn has been selling cigarettes and lighters out of her apartment for 10 years, operating her specialty store daily from 7am to 9pm. She lives in a building where there are many seniors and elderly residents, and her customers appreciate the convenience of not having to venture out, especially in winter months, in order to purchase cigarettes. Gwendolyn started with Internet cigarettes, but many customers complained about the taste. She then started driving to Bensonville, Illinois to purchase bootleg cigarettes from Missouri, but these too weren’t always popular with her customers. Now she makes weekly trips to Indiana to purchase five cartons.She had been selling loose cigarettes for50 cents each. However, following a recentIllinois tax increase, she now sells them for 75 cents, or an entire pack for $9. If she sells all five cartons (200 cigarettes),Gwendolyn will earn approximately $90above the initial purchase price.
Like Walter, Gwendolyn notes that the mar-ket for loose cigarette sales is competitive.“Everybody is trying to do the same thing,” she remarks, but because she is selling indoors, “at least I don’t have to hassle with the police.” Reselling cigarettes that have been purchased in other states can be against the law. The Illinois Department of Revenue warns, “It is illegal to purchase cigarettes outside of Illinois for personal use or for use by friends, neighbors, or coworkers without paying Illinois CigaretteUse Tax” and that, in addition to a $20 per pack fine for possession of between nine and 100 packs, violators could be subject to criminal prosecution for the possession, sale, and/or transport of unstamped (untaxed) cigarettes.