Vaping and Cannabis Industries are Booming: Learn how to Easily Comply with Age Verification for Sales of Regulated Goods Online, Mobile and On Premise
April 23, 2019
Mobile commerce, by any measure, is booming. Forrester estimates that sales made via smartphones is expected to reach $209 billion by 2022 and in 2018 accounted for approximately 23% of all online sales. For businesses selling age-restricted products such as tobacco, e-cigarettes and cannabis, selling online is more challenging. Retailers must verify a customer’s age to meet federal regulations. In fact, it is the responsibility of retailers to ensure they do not sell age-restricted products online to people who are under the minimum legal age, and failure to set up reasonable measures to confirm the age of potential purchasers can result in fines and even possible jail time.
New laws that permit the sale of cannabis in certain states have started a whole new industry for online sales and distribution – including home delivery via “Uber” like apps. At the same time, e-cigarettes and vaping are becoming increasingly popular, particularly among teens. In 2018, more than 20% of high school students reported having used e-cigarettes in the last 30 days.
Access to these products is easily available via online sources and online retailers often rely on the purchasers to confirm that they meet the minimum age requirements by simply checking a box or providing a date of birth. Requiring a credit or debit card isn’t enough for proof of age either, as minors can obtain these cards as well. For today’s boundary-testing and technology-savvy teens, these techniques are not adequate and fail to limit access to age-restricted products. In one study, underage buyers were able to use their real ID and a prepaid Visa card to order alcohol online and have it delivered to their home without anyone verifying their age.
As a result of online and mobile sales of restricted products and the proliferation of these products among minors, the U.S. Food and Drug Administration (FDA) announced in November 2018 that new steps to restrict illegal underage use of e-cigarettes would be coming. One proposed measure would require that online stores implement better age-verification measures – far stricter than the self-verifying measures that are common.
California has already enacted the STAKE Act, which prohibits the sale of tobacco products to anyone under the age of 21 and imposes mandatory steps for online retailers to verify the age of prospective buyers. These steps include matching the customer information to a database of verified individuals and if they cannot be verified requiring the purchaser to submit an age-verification kit with valid government identification.
To better comply with current and potential future legislation while still providing a positive customer experience to of age purchasers, retailers should implement improved online and mobile identity verification solutions, as well as in store when applicable. This will protect them from legal implications and guard their reputations in the communities they serve.
There are now technologies that can help merchants accurately verify a customer’s age using their mobile device or desktop camera in seconds. The customer can simply submit a photo of their government-issued ID for forensic authentication to ensure it is a genuine, unaltered ID. The speed of verification means that legal buyers can be assured of a quick, painless experience. On premise, this can be accomplished with either a mobile device or a scanner connected to a desktop or even a self-service kiosk solution.
For an extra layer of protection with remote transactions or for initial sign up to make recurring transactions easier, merchants can employ facial recognition technology to confirm that the person making the purchase is the same person in the ID. The buyer can take a selfie and compare it to the extracted biometric data from the ID. Again, results are given in seconds. In addition to these offerings, Acuant provides liveness detection which confirms that there is a live person in front of the camera – not a static image. Retailers can also use that information for future transactions (using only facial recognition to verify and transact), as well as for records management and marketing to age-appropriate customers.
While age-restricted products like e-cigarettes should not end up in the hands of children, legitimate buyers should be able to purchase products with ease. At the same time, retailers must protect themselves from fraud and fines due to increasing regulation. Acuant’s ID verification solutions allow merchants can take advantage of the boom in mobile commerce while staying on the right side of the law and delivering a superior customer experience.