Buinesses that sell age-restricted products face a common problem: Fake IDs and age fabrication.
In fact, 11.73% of all alcoholic beverages sold in the U.S. in 2016 were consumed by underage customers, according to the Journal of Studies on Alcohol and Drugs. Additionally, a recent JAMA research letter revealed that in 2018, 49.8% of California’s tobacco and vape establishments neglected to verify secret shopper’s ages.
For businesses, the consequences are clear. Faulty customer age verification standards result in hefty fines, lost sales (if licenses are revoked), and disruptions to day-to-day operations.
Although this is a real problem, businesses can’t rely on any old age verification technique. If customers have to wait longer than three seconds for age verification, they’re unlikely to return and will seek out a store with a better customer experience.
You might be wondering: What age verification solutions are available?
In this guide, we’re looking at current compliance requirements for age verification policies, how they’re applied at the state and federal levels, which businesses must implement them, and how to implement a thorough and user-friendly age verification process.
Age Verification: How Does It Work?
Age verification works by requesting identification from customers before selling them age-restricted products or services like lottery tickets, tobacco, or alcohol, and it may even be required to qualify for discounts and incentives. For example, age verification is a requirement for the Altria scan data program.
Depending on whether an individual’s age is being confirmed in person or electronically, the process can look quite different.
In-Person Age Verification
A government-issued photo ID, such as a driver’s license or passport that displays the buyer’s birthdate, would typically be required when purchasing an age-restricted product or service in person, such as in a brick-and-mortar liquor store.
The seller will then generally examine the ID to look for evidence of tampering and confirm the presence of any unique features (like holographic foils and text). Additionally, they will make sure the ID’s photo matches the face of the individual in front of them. Some IDs have security components like barcodes or NFC chips that are made to help stop fake IDs. These can be scanned to assist the seller in verifying the legitimacy of an ID.
Need some help? See our tips for spotting fake IDs guide for more info.
Electronic Age Verification
Online, sellers must still confirm the customer’s age when they want to buy an age-restricted product through a website or mobile app. Typically, this is done by verifying official IDs.
Website age verification with FTx Identity includes these steps:
- The user is prompted to snap a photo of their driver’s license (or other acceptable ID)
- The authenticity of the ID is examined
- The user is asked to take one or more selfies
- To make sure the ID was not stolen, the selfie is matched to the ID photo
ID scanning software makes this possible. Information is taken from the ID and compared to the data the user has provided. Whether or not the person is of legal age is automatically determined by the system. Customers who live in states where mobile driver’s licenses (mDLs) are available and recognized can use these in place of taking a photo of their physical ID.
Online ID scanning solutions typically rely on biometrics identity verification tools.Biometrics is one of the best ways to prevent false-positive fake IDs scans.
Age Verification Requirements: Are You In Compliance?
To help maintain consistency in age verification expectations and processes, there are compliance regulations at both the federal and state levels. Federal regulations frequently give a general framework for compliance with regard to certain times, such as cigarettes, while state regulations offer more specific guidance.
The following are a few examples of state and federal regulations regarding age verification:
Federal Age Verification Regulations
According to the Tobacco 21 law, which was enacted on December 20, 2019, “it is now illegal to sell any tobacco product—including cigarettes, cigars, and e-cigarettes—to anyone under 21.”
All individuals and retailers must abide by the law. Anyone under the age of 27 who tries to buy a tobacco product must now have their photo ID checked by the seller, according to the FDA. Additionally, businesses are not allowed to give away free samples of any tobacco product and may only sell tobacco products in vending machines that are housed in adult-only facilities.
Additionally, there are defined minimum ages for purchasing alcohol. The minimum legal drinking age (MLDA), which is 21 years old, was raised as a result of the National Minimum Drinking Age Act of 1984, according to the CDC.
State Age Verification Regulations
Many states have passed their own age-related sales limits in addition to federal laws.
In the case of New York, businesses are accountable for both direct sales of alcohol to minors and “indirect deliveries,” which happen when an adult buys alcohol and then gives it to a minor. If businesses violate these rules, the New York Liquor Authority may temporarily or permanently suspend their ability to get a liquor license or impose fines of up to $10,000 per violation.
All online retailers in California are now required to “take reasonable steps, as specified, to ensure that the purchaser is of legal age at the time of purchase or delivery, including, but not limited to, verifying the age of the purchaser,” according to Bill 2511. This bill prohibits the sale of fireworks, firearms, tobacco, and ammunition to those under the legal age. Businesses that violate this legislation risk paying a $7,500 fee for each infraction.
Is Age Verification Necessary at Your Place of Business?
Any business that sells age-restricted goods, grants access to activities that are age-gated, or offers services that demand adult consent is required to verify customers’ ages. Among the several business types are:
1. Tobacco and Alcohol Businesses
As was previously mentioned, tobacco and alcohol sellers must attempt to confirm the age of online customers. This verification covers the entire range of tobacco products, including cigarettes, smokeless tobacco, cigars, hookah pipes, e-cigarettes, nicotine gels, and dissolvables. Only adults over 21 are allowed to purchase tobacco. Individuals over 21 are allowed to purchase tobacco.
There are modest variations in cannabis laws. Many states allow adults over the age of 18 to have cannabis for medical purposes, but businesses can only sell the drug to adults over the age of 21. In the United States, the legal drinking age is 21.
2. Gambling Venues
According to Grand View Research, the market for online gambling was valued at 63.53 billion dollars in 2022, and from 2023 to 2030, it is anticipated to increase at a compound annual growth rate (CAGR) of 11.7%. States have different minimum gambling ages. While most states have chosen 21, some, like Montana and Oklahoma, have placed the minimum age at 18.
3. Gaming Websites
According to Business Insider, the pandemic opened the door for a brand-new category of internet gambling: video games. Several new platforms that let users wager real money are now on the market. However, despite being required to do so, many of these new sites failed to keep away underage gamblers.
The legal gaming age is often set at either 18 or 21, and gaming websites generally follow the same rules as casinos. Businesses should anticipate stricter restrictions and heavier fines if they don’t follow these rules as this market develops.
4. eCommerce Companies
Any online store that offers goods or services that are age-restricted must set up an age verification system. Alcohol, tobacco, weapons, ammunition, and adult-oriented material are a few examples of these products. Failure to do so could lead to fines, legal issues, and damage to your reputation. The minimum age to purchase a good might range from 18 to 21 depending on the item.
5. Food Delivery Services
If customers order alcohol, food delivery services must also confirm the customers’ ages. Delivery drivers must be shown identification before giving customers any alcohol, whether it is bought separately or as part of a larger food order. A person must be at least 21 years old to order alcohol.
6. Adult Entertainment
Businesses in the adult entertainment industry, such as those who sell or distribute pornography online, have always been obligated to check that visitors were at least 18 years old before allowing them access. This was often accomplished by age gating, which is pretty simple to get around. A recent law in Louisiana mandates stricter age checks before a person can view online pornography. Businesses must confirm customers’ ages using a “commercially reasonable method,” and the law mentions database verification and government ID verification as possible solutions.
7. Social Media
Although social media legislation intended to safeguard children has received bipartisan support, it is still not nationally regulated in the US. Some states are resolving the situation on their own in the meantime. For instance, the governor of Utah signed two bills into law in March 2023 that limit children’s usage of social media sites and mandate that social media platforms confirm the ages of all users in the state.
8. Medical-Related Services
Businesses that provide medical services must also check the ages of their clients, a duty that has grown even more important with the growth of telemedicine. Expectations for age and identity verification will quickly change now that telemedicine is here to stay. Typically, to offer informed consent for medical operations or services, patients must be at least 18 years old.
What Is Age Gating?
Age gating is the practice of hiding web content behind a form that asks visitors to input their birthday, choose their age, or confirm that they are of legal age to consume the content.
For instance, a visitor trying to access a website that focuses on wine would be asked, “Are you over 21 years of age?” Age gates have been used on the internet for years, but they don’t really count as an age verification method because they don’t genuinely confirm that the user’s information is correct. They believe what the user says. Since the person can just lie about their age, they are relatively easy to get around.
Age gates are therefore no longer sufficient in the majority of countries for confirming age. Businesses must now take proactive measures to verify customers’ ages before offering them access to an age-restricted good or service. This entails acquiring and verifying legitimate documents that clearly prove the customer’s age.
Examples of Age Gating
“Age gates” are often checkboxes or form fields on websites that ask visitors to verify that they are at least a specified age, such as 18 or 21, or to provide their birthdate as identification.
Some age gating examples include the following:
- A cannabis company asking, “Are you over 21 years of age?” and the user must select “yes” to access the site.
- An online betting site that requires users to enter their birthday before being given access.
- An adult entertainment website that requests users choose their age from a drop-down menu before continuing.
Why You Need an Online Age Verification Solution?
The widely used “are you at least ___ years old?” pop-up that can be found on many websites is the most basic kind of driver’s license verification. However, the issue is that even though this method is straightforward, individuals can easily lie if they are not of legal age.
Due diligence, which calls for businesses to take actions that really lower total risk, generally cannot be satisfied by asking customers if they are a certain age.
Another part of confirming an age is its intricacy. Users will just move their business elsewhere if your age verification procedure is difficult and slow. When using an age verification system, it’s crucial to bring together speed and security to help lower risk and maintain regulatory due diligence.
The bottom line is that age verification is crucial for online businesses and retailers. But although oversimplification can pose a security risk, complexity can irritate customers. With the state-of-the-art age and identity verification technology provided by FTx Identity, you can quickly and easily verify a customer’s age while also ensuring compliance. Curious to learn more? Set up a consultation and demo with one of our specialists to learn more about what’s possible with us!