Pouring responsibly: age verification for online alcohol retailers

In recent years, e-commerce has disrupted the alcohol industry, and online sellers have taken a significant slice of the alcohol market. By 2027, analysts predict the global online alcohol market will hit $40 billion, making up 4% of all alcohol sales, up from just 1.9% in 2019. 

As online alcohol sales continue growing, retailers face new challenges in ensuring responsible sales practices. Recent studies have shown that underage consumers can purchase alcohol more easily online than in person. And traditional age verification methods like simple age affirmation ("click this button if you're over 21") or visual ID checks have proven inadequate. This vulnerability exposes retailers to severe consequences, including potential suspension or revocation of their alcohol licenses. 

As the alcohol industry evolves, it’s important for online sellers to incorporate tools that can reliably verify customers' ages during checkout and delivery. We’ve written this guide to help online alcohol retailers understand the verification landscape — and to offer some strategies for finding the right verification solution. 

Age verification regulations for online alcohol sales

In the US, the online sale, shipment, and delivery of alcohol are regulated state by state. Rules vary depending on whether a business is:

• A national direct-to-consumer (DTC) alcohol service (e.g., Naked Wines, Flaviar, Sips Tequila, or Craft Beer Club)
• A local retailer or restaurant (e.g., local liquor stores and restaurants that offer online alcohol orders through their websites or through third-party delivery apps like DoorDash or Uber Eats)

Direct-to-consumer (DTC) alcohol services

States that allow DTC alcohol shipments all require some form of age verification to ensure the purchaser is of legal drinking age. The specifics vary by state but generally fall into one of two categories: point-of-sale verification and delivery verification.

• Point-of-sale verification: Several states require age verification at the time of online purchase. For example, in Kansas and Michigan, DTC shippers must verify a purchaser’s age by inspecting the buyer’s government-issued ID or using a third-party age verification service. Multiple other states require point-of-sale verification but don’t specify which form that verification has to take.  Today, many DTC platforms selling alcohol in these states use age gating (asking a purchaser to confirm their birthdate) at the time of purchase to remain compliant. 
• Delivery verification: Most states require age verification at the point of delivery. This typically involves the delivery person checking a valid government-issued ID to confirm the recipient is 21 or older. Some states, such as Pennsylvania, also require an adult signature upon delivery. It's important to note that while not an explicit requirement in most state laws, adult signature is a standard practice for alcohol shipments because carriers like FedEx and UPS require adult signatures for alcohol deliveries as part of their policies.

Local retailers and restaurants 

Regulations for online alcohol sales typically focus on the point of delivery. In most cases, delivery personnel must inspect a recipient’s government ID and obtain a signature from someone over 21 before handing over alcohol.

In California, regulators require online retailers and restaurants selling alcohol to verify a purchaser’s age, but allow  the retailer or restaurant to choose whether to verify a purchaser’s age during the online checkout or at the point of delivery. The law states that the retailer must “take reasonable steps 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.” The bill goes on to specify that reasonable steps include, but are not limited to:

1. Requiring the purchaser or recipient to input, scan, provide, or display a government-issued identification
2. Requiring the purchaser to use a non-prepaid credit card for an online purchase.
3. Implementing a system that restricts individuals with accounts designated as minor accounts 
4. Shipping to an individual who is of legal age 

Common age verification methods for online alcohol sales

Because regulations vary based on business type, alcohol retailers have adopted different different processes tailored to their circumstances and risk tolerance. Below are the typical methods vendors use to confirm their online purchasers’ ages; however, age verification can differ between vendors, even within the same business category. 

DTC alcohol services

Step one: The purchaser affirms their age (enters their date of birth) at the time of online purchase. 

Step two: An online age verification provider verifies the purchaser’s data. This involves cross-checking the customer’s provided information against various databases and public records or using government ID verification. 

Step three: The purchaser presents a valid ID and adult signature upon delivery. 

Local retailers and restaurants

Most local retailers and restaurants use third-party delivery apps like DoorDash or Uber Eats to handle online sales and deliveries. However, some national retailers with local brick-and-mortar locations like BevMo! have their own e-commerce websites powered by third-party delivery services like Gopuff. 

Third-party delivery apps 

Step one: The purchaser uploads their government ID. 

Step two: The app uses age verification technology to conduct government ID verification. 

Step three: Delivery personnel take a picture of the recipient’s ID through the company’s app, which uses age verification software to check authenticity. 

Retailers and restaurants with e-commerce platforms 

Step one:  Purchasers affirm their age (enter their date of birth) at the time of online purchase. 

Step two: Delivery personnel manually check the recipient’s ID and request an adult signature at the time of delivery to confirm that they are over 21. 

The problem with age gating and physical ID checks for online alcohol sales

In the US, businesses are required to obtain a license to sell alcoholic beverages. This license comes with a crucial responsibility — demonstrating adequate due diligence to ensure that alcohol sales are limited to individuals over the age of 21. Licensees who fail to demonstrate due diligence risk having their license revoked or suspended. 

As evidenced above, some licensees rely on age gating (whereby an online visitor self-attests that they are over 21) at the point of purchase and physical ID checks at the point of delivery to verify a purchaser’s age. This is problematic for two key reasons:

1. Age gates do not verify a purchaser’s age. Age gating simply asks purchasers to self-declare their age or date of birth. Consequently, minors can easily fabricate their age to complete an alcohol purchase. Studies show a high success rate (45% in one case) for underage attempts to purchase alcohol online from retailers using age gates. 
2. Relying on delivery personnel to check IDs is often unreliable. Studies show that alcohol is frequently handed over to underage recipients during delivery. For example, one study found that restaurants and bars illegally provided minors with alcohol in 25% of deliveries, while on-demand apps did so in about 80% of alcohol deliveries. 

‍

A better solution: multi-step age verification

Unlike age gating, age verification is a process designed to externally verify a person’s age. This provides a far greater degree of certainty that the person on a businesses’ site is actually the age they say they are. There are multiple age verification methods and processes you can implement. For online purchases,  electronic age verification is most common. It typically involves the following steps:

• A purchaser is prompted to take a photo of their government ID.
• The system confirms that the ID is authentic by checking for certain features of a government ID such as watermarks, holograms, and stamps. 
• Information is extracted from the ID and checked against the information provided by the user.

Some systems integrate another layer of verification to ensure that the government ID matches the person submitting the information. This typically involves the following steps:

• The purchaser is promoted to take a selfie or series of selfies.
• The photo in the ID is compared against the selfie(s). 
• Depending on the capabilities of the age verification system, the selfie also uses liveness detection to analyze if a subject is a real person or a spoof.

A robust, multi-step age verification process can help licensees avoid legal consequences and/or license revocation for inadvertently supplying a minor with alcohol. It also enables businesses to demonstrate due diligence by creating an auditable record of each transaction. 

Streamline age verification with Persona 

Persona offers a robust, configurable digital age verification solution that can be seamlessly integrated into your e-commerce platform to meet your business needs, including:

• Compliance with age verification regulations: Our configurable platform offers multiple verification options that can be easily applied at critical points in the transaction (from point of purchase to delivery) to meet state-specific regulatory requirements, allowing for seamless adjustments as regulations shift or business operations expand to new states. 
• Compliance with data privacy laws: Persona’s built-in measures enable granular access control and data retention policies to redact consumers’ personal information on a recurring basis. 
• Risk tolerance: Persona offers various age verification methods that you can customize based on your business needs and risk tolerance. These include automated government ID upload and capture, selfie capture as a second layer of verification, and integrated database checks to verify ages and identities.
• Consumer preferences: With Persona’s full testing suite and analytics, you can see where consumers are dropping off. You can then use this information to adjust your age verification flow, whether that means  adding in-app guidance , changing which documents are accepted, adding another layer of verification, or something else.. 

A typical age verification flow with Persona might involve the following:

• Step one: The individual purchasing alcohol is prompted to upload their government-issued ID at the time of purchase.
• Step two: Persona's system assesses the validity of the submitted ID and the individual's age. You can configure the system to check against different age thresholds in different regions. And depending on your specific requirements and risk tolerance, you can configure the checks to make the assessment more or less stringent.
• Step three: Based on signals gathered actively and passively in real time, you can incorporate additional verification steps, such as selfie capture, to verify that the user is actually the person represented in the ID.
• Step four: Before the alcohol is handed to the customer, the courier scans the individual's ID to verify it's the same person.

With Persona's flexible and customizable platform, you can tailor the age verification process to meet your unique business needs, boost conversion rates, increase operational efficiency, and maintain compliance with relevant regulations.

‍Need robust, reliable, and streamlined age verification? Contact us to learn more or get started for free.