Risky Retail Business: Turning a Blind Eye to Fake IDs

Fake IDs are a very real problem for retail businesses. Consider this college scene:

“Party at Mikey’s this weekend?” Joel, a 19-year-old freshman, said to his roommate, James, across the dorm. “Hell yeah,” he said, slamming his textbook shut. “But dude, what about drinks?”

Joel smirked. “Already sorted. Online order with my fake, the workers at the store are clueless.”

James grinned. “I love to hear that, man, let’s go”.

While this conversation is indeed fictional, for a start, who knows how 19-year-olds talk to each other these days? The scenario is real.

And it is happening a lot.

The extent of fake ID use

Recent exclusive research conducted by Scandit has revealed that 30% of adults aged between 18 and 25 have bought or considered buying a fake ID to purchase age-restricted goods.

Almost half of the 2000+ young Americans Scandit surveyed said they know someone who has successfully used a fake ID, with 20% of those instances for alcohol delivery or collection.

Fake IDs pose a significant issue for retailers in the US. Their widespread use is somewhat down to how easy they are to obtain.

71% of respondents said it was either very easy or somewhat easy to acquire a fake ID.

Alcohol collection and delivery

The rise of quick commerce and other omnichannel services, such as in-store or curbside pickup, have made access to alcohol easier for consumers.

If a retailer is offering these services, there is a high chance that underage customers are using fake IDs.

While IDs are checked, often they are done manually by store associates and delivery drivers. It is tough to tell if an ID is fake by looking at it. Look below for example. See if you think it’s real or fake – and why that is. Fake IDs are becoming increasingly sophisticated, making it very hard to check if you don’t know exactly what to look for.

Retail risks

Retailers risk fines or losing their licenses if found guilty of selling age-restricted products to minors. One quick commerce company lost its license in 2023 when accused of selling to minors in the Boston area.

Fines vary by state and can be up to $50,000 for each offense. Having licenses revoked by regulators would have far worse financial repercussions.

Data from Statista suggests that the revenue generated in supermarkets and convenience stores in the alcoholic drinks market will amount to US$183.5bn in 2024.

For any retailer, missing out on a $200bn pie slice isn’t worth the risk.

Untapped opportunities

With the right measures to check for fake IDs and meet regulations, retailers not currently selling alcohol in certain states due to fear of reprimanding can consider market entry.

Expanding the sale of higher-margin alcohol products (15-20% vs traditional grocery) opens up new revenue opportunities that benefit the top line.

So, what can retailers do to maximize their revenue while minimizing the risk of selling to minors?

Automated ID verification

Most 18-25-year-olds surveyed agree that manual checks are ineffective, with only 13% suggesting eye-balling an ID is sufficient.

Manual ID checks slow down the collection or delivery process. It’s not easy for a store associate or delivery driver to confront a customer and question the authenticity of their ID. They shouldn’t be responsible for spotting a fake.

Automated ID scanning transfers the burden of checking from the associate to technology.

And as IDs are faked in multiple ways, retailers must use various detection methods.

Protect your business with Scandit ID Validate

Scandit recently launched ID Validate to help retailers and other organizations protect their businesses from fake IDs.

ID Validate can verify the authenticity of United States driver’s licenses and state-issued IDs without an internet connection.

Advanced computer vision checks hundreds of ID characteristics, displaying results in just one second.

Due to its ease of use, ID Validate gives workers the confidence to perform checks every time without fear of backlash from a customer who has been challenged based on a manual check.

Your development team will be grateful, too. It integrates seamlessly into your existing workflows, native and web apps, and device fleet.

Auditable, secure data

Importantly for those involved in ensuring compliance, with ID Validate, it is easy to create a complete audit trail and hand it to regulators. App integrations allow for as much or as little captured data to be parsed to central systems to prove that checks occurred.

Identity data is processed entirely on the device, with any data that needs to be transmitted encrypted and anonymized.

8 reasons why product teams choose Scandit ID scanning

Find out