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Age verification is an issue that won't go away for online retailers
Archived article dated Thursday July 17th 2008
The reality of the internet is that many retailers are still getting to grips with operating online stores and continue to find it a tough task handling the rapid growth in virtual store sales that are still significantly outpacing those in physical stores.
by Mark Chirnside
To date they have had a job just keeping up with this exponential growth, which is a welcome problem, especially in the current tough climate. But this has led to some problems, in particular with accepting payments online, which retailers have yet to fully get their heads around.
One of the big issues concerns age verification, which is a serious issue in stores but seems to have escaped the notice of retailers operating online shops. On the High Street it is very difficult for anybody underage to wander into a shop and buy knives, glue, fireworks, alcohol, tobacco, Lottery tickets, 18 certificate DVDs & games, without being challenged. Many tills will automatically prompt the sales assistant to ask for some form of age verification before the transaction can be completed.
But go online and it is extremely easy for any underage person to buy any of these potentially dangerous items because online retailers often regard a credit or debit card as verification of the age of the individual using it.
The problem with this is that it not only fails to take into account the fact many young people borrow their parents' cards to make transactions online but that there are an increasing variety of new payment cards hitting the market aimed at under-18s, including pre-paid debit cards that can be used just like any traditional debit card.
Urban legend has it that prepaid debit cards were used to rent a couple of cars when there were no funds at all on the cards and no address verification, and the two vehicles have since disappeared without trace. This highlights the serious failings by merchants to adapt their payment systems to identify the myriad of new card types now available.
The banks are not helping matters either. Consider that Lloyds TSB recently decided to write directly to the teenage holders of its ATM-only card to ask if they would like to replace it with a debit card that can be used online or in shops. All that's required to make a purchase is sufficient funds in the account. No age verification is needed at all because it acts like any other debit card.
But regardless of the actions of the banks it really should be the online retailer's responsibility to make sure they know the limitations and restrictions of any payment method they're accepting, before relying on it for other purposes such as age verification. And unfortunately the tabloid media and at least one Westminster MP have taken it upon themselves to ensure that this issue won't go away. Margaret Moran MP has introduced a private members bill in the House of Commons calling for online retailers to take 'reasonable steps to establish the age of its customers' when selling adult goods and services.
Maybe retailers should look to the online gaming industry as an example of good governance of age restrictions. Companies in this sector typically use one of the many age verification systems available to ensure that the person they are dealing with is over 18 years of age.
But none of this is being done at the moment by retailers. At a time when online sales are still growing and new payment types are flourishing this could turn out to be a costly mistake.
Mark Chirnside is chief executive officer, Ukash
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