Underage drinkers are no challenge for technology
Compliance is at the heart of everything Vinoshipper does and at the top of the list is the prevention of underage purchasing, using online age verification. Ensuring alcoholic beverages are not purchased or delivered to underage drinkers is a critical part of safe Direct to Consumer sales, and it is one of the easiest factors to ensure. In fact, of the hundreds of thousands of online transactions we facilitate every year, 99.84 percent of all digital age verifications pass the “of age” test, with the remaining 0.16% of underage purchasers stopped at the source.
Verification systems compare public information, such as name, date of birth, and address, to ensure the buyer is of age, prior to allowing the purchase. Third-party vendors, such as IDology, make the verification process seamless prior to completing a transaction.
Furthermore, state shipping regulations require that any packages containing alcoholic beverages are clearly labeled and require an adult signature prior to delivery, or the package is returned to the sender. All orders with alcohol included are sent via special carrier accounts that record alcohol is being sent, include special package marking, and are shipped with tracking numbers with meta-data indicating alcohol is included and an adult signature is required.
While the opponents to direct shipping spread fear about underage drinking, the federal government addressed the topic earlier this year in a report released by the Tobacco Tax and Trade Bureau (TTB), a bureau under the Department of the Treasury.
“The direct-to-consumer model, common in wine, has been spreading to beer and spirits and offers distribution opportunities for small producers,” said a report issued in February 2022 titled Competition in the Market Place for Beer, Wine, and Spirits. “Some, however, argue that direct shipment risks making alcohol available to underage drinkers. An FTC study of direct wine shipments found no evidence of such abuse, but there is a lack of evidence specific to beer and spirits.”
Furthermore, in the FTC’s first study on the matter, titled E-commerce Lowers Prices, Increases Choices in Wine Market, the FTC noted that, “If states choose to allow direct shipping, we would encourage them to adopt stringent requirements, similar to those that apply to brick-and-mortar retailers, with respect to verifying a customer’s age.” It is now 2022, and online sellers of alcohol have surpassed the basic requirements that brick and mortar retail follow. Using online ID verification adds an additional safety layer, ensuring alcohol stays out of the hands of those who are underage.
Age verification is one of four regular focus areas for regulators. Others include Licensing and Compliance, Tax Calculation and Collection, and Auditability. Think of the four areas as ALTA.
If any State regulatory bodies are evaluating electronic age verification in the direct-to consumer distribution model, both in terms of the distribution opportunities it presents for small producers in their state, and the worry it may present of making alcohol more readily available to underage drinkers, we welcome the opportunity to provide them data on real world transactions, not just information from surveys.