The need for strong age verification systems in e-commerce has become increasingly important. As online shopping for alcohol, tobacco, vape items, CBD, knives, medication, and other regulated products grows, it's necessary to ensure that sales are limited to individuals of legal age.
Not implementing proper age verification measures can expose your businesses to legal risks but introducing them can often create friction and result in lower conversion rates. Let’s look at how to balance things out and comply with the age-related regulations while not deterring eligible customers.
What is an Age Check and Age Verification System?
An age check means confirming a customer's age via age verification systems before granting access to age-restricted products or services on your website. An age verification system, in turn, is a pop-up, ID scanner, or data aggregator that helps to verify a user’s date of birth and ensure they’re eligible to view or purchase age-restricted content.
Customer age verification technology can reduce cart abandonment or order cancellation that may occur due to a customer’s ineligibility. However, the key purpose of implementing age verification on an e-commerce site is to comply with legal requirements.
Key Age Verification Laws Globally
Leaving age-restricted materials openly accessible to minors can get your website in legal trouble. Possible penalties include heavy fines, legal action, or even business closure.
Here’s a glimpse at the laws related to age verification that you need to know:
- COPPA (Children’s Online Privacy Protection Act). This US federal law requires age verification from any website that collects personal information and sets the minimum age requirement at 13.
- US State-Specific Laws. Similar laws striving to protect children exist on a state level, too. For example, California’s regulations on vape products include stringent age checks, while Louisiana requires proof of age for all online purchases of alcohol and tobacco.
- Digital Services Act (DSA). This EU regulation imposes strict rules on online platforms that sell age-restricted goods, requiring verification processes that protect minors.
- Online Safety Bill. UK retailers selling age-restricted products must meet new requirements under this law, which mandates age verification systems for products like alcohol, knives, and adult content.
- GDPR (General Data Protection Regulation). Any age verification system in the EU must comply with GDPR, ensuring that user data is handled securely and with consent.
If your store operates cross-border, make sure to stay compliant across all regions. Strive to implement a flexible age verification system that adapts to different legal frameworks and helps you avoid regulatory pitfalls.
How Does Age Verification Work Online
There are 4 key ways to verify age online before your users access age-restricted content. These types vary in their stringency, security, ease, and, their use cases.
Document-Based Age Verification
This method involves scanning government-issued IDs, like passports or driver’s licenses, to confirm a buyer's age. It's commonly used in industries such as alcohol, tobacco, and firearms, which must comply with strict regulations.
- Pros: Highly reliable and secure, meets legal compliance requirements.
- Cons: Can create friction in the user experience and may lead to higher drop-off rates.
Case study:
Drizly, a prominent alcohol delivery service, has effectively implemented a document-based age verification system to comply with local and state regulations. Customers are required to upload a valid ID before making a purchase. This approach has not only helped Drizly avoid regulatory penalties. In 2022, the company reported a 20% reduction in order cancellations, attributed to the clear and effective age verification process they have in place.
Database and External Age Verification Services
This third-party age verification method confirms a user’s age via external sources – credit records or social security number checks. Requiring minimal input from the customer, it creates a smooth experience during checkout. This approach is particularly effective for financial services and stores selling prescribed drugs.
- Pros: Reduces customer effort and friction, combines ease of use with strong security.
- Cons: May require integration with external databases and raises privacy concerns related to data usage.
Age Confirmation via AI and Biometrics
AI-driven solutions like facial recognition estimate a customer's age through biometric analysis. The age-smart verification technologies offer a quicker, more seamless verification process, especially for lower-risk products such as CBD, adult content, and online gambling.
- Pros: Fast and user-friendly. Reduces customer friction during verification.
- Cons: May only meet compliance standards for some industries. Accuracy can vary depending on technology and conditions.
Digital Age Gates and Age Verification Pop-Ups
Simpler age verification methods include “self-attestation” or parental consent pop-ups. Digital age gates require users to confirm their age by checking a box or go through a two-factor ID check. These methods are commonly used on websites selling low-risk items like energy drinks and offering digital content for mature audiences (e.g. access to social media platforms and video games).
- Pros: Quick and easy for customers. Can be sufficient for low-risk products.
- Cons: Less secure than more rigorous verification methods. Potential for dishonest responses from users.
How to Choose the Right Age Verification Solution for Your Online Store
Each industry has specific needs for ensuring that age restrictions are met. You have to select the most appropriate method to avoid legal issues while maintaining a seamless shopping experience.
Three key factors to consider when making the choice are:
- Compliance Needs. Depending on your store's location and the products you sell, local and international regulations will dictate which verification methods are acceptable.
- User Experience. Mind the balance between ensuring compliance and minimizing friction. If the verification process is too complex, even eligible customers may abandon their carts.
- Data Privacy. Storing and transmitting sensitive user data (IDs or biometric information) requires high standards of security and encryption. Ensure that your solution complies with privacy regulations and let your customers know about it.
If you sell low-risk items on Magento, Ecwid, and Wix, Amasty’s Age Verification Popup can be a great choice. The plugin fully complies with major legal requirements across different regions and easily integrates with each platform. It also sports flexible settings that help you customize the design and minimize disruptions for your clients.
Cost Analysis: How Much Does Age Verification Cost?
First, let’s talk about non-compliance costs. Failure to comply with age verification regulations can result in significant penalties, for example:
- In the U.S., violations of COPPA can incur fines up to $46,517 per violation.
- In the EU, GDPR violations may lead to fines of up to €20 million or 4% of annual revenue, whichever is higher.
The cost of implementing an age verification system to avoid these penalties can vary. The major factors that affect the costs are your business size, compliance requirements, and product types. Here’s a breakdown of the potential expenses and factors to consider:
- Custom development and integration fees – If you need a tailored solution or API integration, costs can range from $1,000 to $5,000. The total depends on the complexity of the integration and the platforms you use.
- Product subscription fees – Most age verification services use a subscription pricing structure. Monthly fees typically range from $50 to $500.
Not many businesses have a reason to invest in the custom development of age verification software. The market offers enough products to cover e-commerce age confirmation needs almost immediately and at a low cost. The offerings can be divided into 2 groups:
Low-Cost Solutions
- Pricing: Typically ranges from $50 to $100 per month.
- Features: These solutions generally provide basic document verification and database checks. While they are budget-friendly, they may lack advanced features such as biometric verification.
These products are ideal for most businesses selling low-risk items and looking for a cost-effective solution.
Premium Solutions
- Pricing: Generally starts from $300 per month and can go much higher.
- Features: These offer more robust verification methods, including AI-based age estimation and multi-layered ID checks.
Premium age verification systems are best for higher-risk industries such as gambling, firearms, and alcohol sales, where stricter compliance measures are necessary.
5 Best Practices for E-Commerce Website Age Verification
As we said at the beginning of this article, you need to strike the right balance with age verification in your store, ensuring both legal compliance and a smooth customer experience.
Follow these best practices to achieve this balance and maintain customer trust while staying within the law.
1. Offer Multiple Verification Options
Provide a variety of age verification options to enhance the customer experience. For instance, you can allow users to verify their age through an ID scan, credit card check, or mobile phone verification. Such flexibility will minimize friction and increase the chances that customers will complete the purchase.
2. Mobile Device-Based Age Verification
Ensure that your potential customers can verify age on any device. Implement a mobile-first design that loads quickly and displays clearly on smaller screens. Avoid excessive input fields or complicated navigation, and confirm that ID upload or document scans can be done easily via smartphone cameras.
3. Ensure Scalability
Your age verification system should be scalable to handle increased traffic, especially during peak sales periods or events. Choose a system that grows with your business and supports a large number of verifications without causing slowdowns or downtime. Cloud-based solutions are often ideal for managing scalability.
4. Keep the Process Seamless and Fast
A lengthy or overly complicated verification process can frustrate customers and lead to abandoned carts. If you can afford it, use technology that automates and streamlines the process, such as APIs that verify information in real-time without requiring customer input.
5. Clear Messaging and Transparency
Communicate the reason for age verification at multiple points in the customer journey – on product pages, the checkout process, and through pop-ups. Educate your customers on why this step is necessary through transparent messaging that builds trust and reduces the risk of abandoned carts.
Age Verification: Key Takeaways
To sum the information up, here are the key takeaways for anyone looking to learn about or implement age verification:
- Aligning age verification with user experience will help you maintain a smooth transaction process while meeting all the necessary legal requirements.
- Age verification apps are affordable and cover the needs of most businesses. Investing in them is much more reasonable than losing hundreds of thousands in a legal case.
- Make sure to choose the right verification method depending on your business and the products you sell – some may need robust checks, while others can use quicker options.
- Look for a flexible, scalable solution so that your verification process can adapt as your business grows and regulations shift.
Frequently asked questions
Age verification is the process of confirming a person's age to ensure they meet legal requirements for specific activities or products, like alcohol sales. Methods include ID checks, online verification, or third-party services to maintain compliance and enhance safety.
Online stores verify age through document uploads (e.g., ID), database checks, or AI-based solutions that analyze biometric data or perform automated ID verification. The method depends on the risk level of the products.
Yes, age verification is generally safe when conducted using secure systems. Most methods encrypt sensitive data to protect users' personal information and comply with privacy regulations.
To implement device age verification, choose a method (ID upload, credit card), integrate verification tools, create a user-friendly interface, ensure data security, test the system for accuracy, and stay updated on legal requirements for compliance.
