However, age verification software has and will continue to be a useful tool for a variety of age-restricted businesses. From weapons to alcohol, it’s important to consider how to prevent underage sales in any age-sensitive industry. For example, subscription businesses selling age-restricted products online, such as wine-of-the-month clubs, benefit from age verification software in many ways.
Fraud and Chargeback Prevention
Memberships with any subscription billing model are no strangers to chargebacks, since it’s common for customers to dispute recurring payments over time, either because they forgot about them or weren’t aware that they signed up in the first place. When you add age-restricted products like wine into the mix, that risk multiplies. A common scenario is when a child uses a parent’s credit card without the parent’s consent.
When the parent discovers the charge, and is unable to get a refund from the business, they often initiate a chargeback instead. Age verification prevents this scenario, protecting your business from products falling into underage hands and from the financial loss and frustration of handling chargebacks that could have been avoided with the right technology in place.
In addition, age verification confirms the buyer’s identity and allows the business to block buyers and/or IP addresses that have been linked to fraudulent activity. Custom integrations can help businesses set their own rules to detect fraud. For example, it’s possible to set up age verification software to work with fraud filters to compare order information against merchant blacklists of known fraudulent accounts to block those orders, or block orders from an entire region, reducing your exposure to fraud.
Fewer Refunds and Voided Transactions
Because age verification occurs right before the customer checks out, if the customer is underage, the transaction will not go through. This simplifies payment processing for the merchant and banks involved, as they don’t have to process refunds and voided payments that result from finding out a buyer is underage after the payment has already processed. Refunds cost your business the same transaction fee as the original payment, and voids aren’t free either.
For instance, an online wine-of-the-month club may verify age only upon delivery of the product. If they find the buyer to be underage, they’ve wasted the time and effort to pack, ship, and deliver that product, not to mention the task and cost of going back to refund or void the payment. Online age verification confirms a buyer’s age before payment takes place, ensuring this scenario doesn’t play out. Upon delivery, an ID should still be required in person to ensure it matches the order information.
Efficient Verification
Another common practice for ecommerce alcohol businesses is to ask customers to submit an ID via email and manually review it in-house before accepting a payment. This can be time-consuming and inefficient if staff are not available around the clock and have other departments of the business to manage. If a customer places an order at midnight, and staff can’t check the ID until 8 a.m., the risk of cart abandonment increases. The customer may get impatient and choose to shop elsewhere.
Having advanced age verification software, backed by a highly-trained team to manually review IDs 24/7, takes the pressure off in-house staff. It’s specifically designed to be unobtrusive and fast, so as not to frustrate the customer and harm conversion rates for the business. When a wine-of-the-month membership customer updates their billing or shipping information, the software will respond by re-verifying their age. Many age verification companies will only charge the business for accepted transactions, not any declined ones, which is another plus for the cost-conscious business owner.
The Cost of Doing Business without Age Verification
When you consider the potential downfalls of operating an age-restricted ecommerce business without age verification software, the risks—chargebacks, extra processing fees for reversed payments, underage use of your products and fines that could come with it, extra staff hours, and more—far outweigh the cost of a reliable age verification solution. There are many options on the market to choose from so that you can find the best fit for your online business. We are available to answer any questions you might have along the way.
