A large number of retailers have contacted Trading Standards about the scam, in which fraudsters switch genuine packs of cigarettes for fakes containing only scrap paper, without the retailers' knowledge.
Mohammed Aslam, who runs Cowgate Newsagents in Edinburgh, said he first became aware of the problem when a customer complained about a box of Sterling Superkings.
"When the customer opened up the packet of cigarettes there were paper cuttings inside. When I opened up another packet in the shop to see what was going on the same thing happened."
Superkings manufacturer JTI urged retailers to be aware of any customers acting suspiciously when trying to buy tobacco, or attempting to distract staff.
Trade communications manager Jeremy Blackburn said: "Our experience of the practice of 'switching' is that a customer wearing a coat with bulky pockets asks for cigarettes, puts the genuine cigarettes in their pocket then fumbles for non-existent cash and tells the retailer they have no money.
"They switch the real pack for a fake pack already in their pocket and hand the fake to the retailer. The retailer places the stock back on the shelf. An innocent consumer then buys the fake packs, which usually contain paper or tea bags.
"The customer complains to the retailer and the retailer ends up out of pocket."
'Switching' is already proving to be a big problem for retailers in Ireland, where incidents have soared since the introduction of a tobacco display ban (Convenience Store, October 2, 2009). Scotland faces its own display ban from October 1.