States warn about age verification violations

Source: https://www.avalara.com/

Gail Cole

December 15, 2021

Beverage alcohol sellers are required to verify the age of consumers to ensure alcohol doesn’t fall into the hands of minors, and states are on the lookout for businesses that fail to verify age in the proper way.

Age verification requirements for direct shippers are set by each state, yet only about seven states have explicit requirements for verifying age for direct-to-consumer (DTC) sales. The remaining states prohibit sales of alcohol to minors but may not have explicit guidelines detailing how direct shippers must verify the age of consumers.

When a transaction takes place face to face, it’s easy to ask for the consumer’s identification. Verifying age is more difficult for online sellers, but there are four key age verification processes available for direct shippers:

Affirm the age of the consumer before they shop by restricting access to digital content

Collect the purchaser’s date of birth, which is required on some returns

Verify the purchaser’s age

Require the deliverer to inspect identification and obtain a signature at the point of delivery

State age verification policies

The following states have clear age verification guidelines for direct shippers of alcoholic beverages.

Arizona. Licensees must verify the purchaser is at least 21 years of age by obtaining a copy of a valid photo identification as prescribed in section 4-241, subsection K. Alternatively, a licensee may use an age verification service.

Georgia. Licensees must require the person placing the beverage alcohol order to “state affirmatively that he or she is of the age required by Code Section 3-3-23” and verify the age of the orderer either by physically examining an approved government issued form of identification or by using an approved online age and identification service.

Indiana. Licensees must obtain proof that the consumer is at least 21 by checking a state or federal government issued identification card. If in-person verification isn’t possible, a photocopy or facsimile copy that’s mailed or electronically transmitted is acceptable, as is a computer scanned, electronically transmitted copy. Alternatively, the licensee may use an age verification service. Direct wine shippers must tell carriers to verify the recipient of an alcohol shipment is at least 21 as well. Records must be maintained for two years.

Kansas. Licensees must require the person placing the order to “state affirmatively that he or she is 21 years of age or older.” Additionally, the licensee must verify the age of that person “either by the physical examination of an approved government issued form of identification or by utilizing an internet based age and identification service approved by the director of alcoholic beverage control, or the director’s designee.” Kansas provides a list of approved internet-based age and identification service providers.

The carrier is responsible for obtaining the signature of an adult who is at least 21 years of age “as a condition of delivery.”

Michigan. Licensees must verify the age of the individual placing the order by obtaining a copy of a photo identification issued by this state, another state, or the federal government, or by using an identification verification service (several have been approved by the Michigan Liquor Control Commission). Michigan also requires the person receiving and accepting the order on behalf of the qualified retailer to record the name, address, date of birth, and telephone number of the individual placing the order on the order form or other verifiable record of a type and generated in a manner approved by the commission and provide a duplicate to the commission. For alcohol deliveries, recipients must show identification verifying their age and sign for delivery.

Oklahoma. Licensees must require consumers to verify, “by electronic means or otherwise,” that the consumer is at least 21 years of age. Direct wine shippers must ensure the deliverer or common carrier obtains the signature of a person aged 21 or older.

South Dakota. Direct shippers must verify the age of the person placing the order by obtaining a copy of the person’s valid age-bearing photo identification document issued by this state, another state, or the federal government, or by using an age verification service. The direct shipper must also record the name, address, date of birth, and telephone number of the person placing the order on the order form or other verifiable record. Finally, the direct shipper must notify the person placing the order that the recipient is required to show a valid age-bearing photo identification document issued by this state, another state, or the federal government upon delivery.

What happens if you fail to verify a customer’s age?

Failure to confirm the age of customers is risky for businesses.

States periodically engage in sting operations to determine whether beverage alcohol sellers are checking identification as required. The California Department of Alcoholic Beverage Control runs a well-publicized Minor Decoy Program to “reduce the number of licensees who sell alcohol to minors and reduce youth access to alcohol.” For the first offense, a business can be fined or have its license suspended. The license is automatically suspended after a second offense and may be revoked after a third offense. The Oregon Legislature is looking to require the Oregon Liquor and Cannabis Commission to develop uniform standards for a similar minor decoy program.

The South Dakota Department of Revenue is required to penalize businesses that sell alcohol to minors, with penalties ranging from $500 to $2,000 and/or suspension of license. Recently, the state sent emails to direct shippers reminding them to renew their licenses, register all products, and verify the age of consumers. It advised direct shippers to either obtain a copy of every customer’s identification at the point of sale (and retain it for three years) or use an age verification program to ensure customers are actually of age. The department also warned that failure to verify age as required could lead to a $1,000 fine per shipment – a penalty the department issued a few times in 2021.

In a nutshell, direct shippers must do more than ask customers to check a box stating they’re 21 or older.

Similarly, the Massachusetts Alcoholic Beverages Control Commission recently issued warning letters to some licensees. The letters explain that Massachusetts prohibits sales of alcoholic beverages to persons under 21 years of age under M.G.L. c. 138 §19F, and that the commission could impose the following penalties:

First violation: 180-day suspension of the direct shipper license or a fine of $1,000, or both

Second violation: 1-year suspension of the direct shipper license or a fine of $2,000, or both

Third, or subsequent violations: 2-year suspension of the direct shipper license or a fine of $5,000, or both

The commission then encouraged recipients to ensure their company accepts orders and payment for alcoholic beverages only from persons who are 21 years of age or older.

One way to ensure age verification is to contract with a third-party age verification service provider.

Using a third-party age verification program

The fact that age verification is required puts direct shippers in a tricky spot because verifying the age of the consumer generally requires a transfer of sensitive personally identifiable information, such as a driver’s license or passport. As Avalara for Beverage Alcohol General Manager Jeff Carroll notes, copies of these documents must then be maintained for up to four years for audit purposes – and protected.

Using an age verification service like Avalara Age Verification for Beverage Alcohol allows you to obtain the information you need to verify the age of consumers without the added burden of storing that information in your business systems. Visit Avalara for Beverage Alcohol to learn more.