Dealing with Restricted Products

Dealing with Restricted Products

Posted in Taxes & Legal by on

While you can get literally anything on the internet if you dig hard enough, it’s pretty standard regulation that you are not allowed to sell certain items, or have to sell them with some restrictions in place.

There’s a big long list of things you are prohibited from selling on Shopify, including things like gunpowder (for obvious reasons) and predatory loans (also for obvious reasons). Take a look at the list here.

But not everything is a full-on prohibition, and there are several types of items you can sell with certain regulations and restrictions. These restrictions can be put in place:

  • By a government regulation requiring certain licensing and age laws
  • In the terms set out by a payment gateway (like Shopify Payments, Stripe or PayPal).
  • In the terms set out by your shipping company, which may not ship items like alcoholic beverages or aerosols.

The most common kind of restriction faced by merchants and customers are age verification restrictions. When you walk into a bar and look too young, the bouncer will ask for an ID. But when you’re shopping online? Well, you need to still have some sort of system to make sure you’re not liable for the consequences of selling to someone too young.

What are restricted items when you’re selling on Shopify?

In most cases, sales of alcohol, tobacco, pharmaceuticals, gambling or gaming services, and fireworks or other flammable materials will have age restrictions. Some states or countries will have their own regulations for products such as weapons and munitions, marijuana and drug paraphernalia, or other products and services. Commonly, these kinds of products and services face restrictions in both online and in-person sales.

  • Gaming
  • Betting (including lottery tickets and scratch cards)
  • Alcohol sales
  • Relationship sites
  • Fireworks
  • Knives
  • Tobacco and e-cigarettes
  • Entertainment (including games and DVDs with 12, 15 or 18 certificates)
  • Solvents
  • Medicines
  • Lighters and lighter refills containing butane
  • Weapons such as crossbows, airguns and pellets etc
  • Adult sites

Finding out what legal requirements you have to follow has everything to do with what you sell and where you want to sell it. For example, if you sell wine online in Australia, you still have to have a normal liquor license as if you had a physical store. Many countries with multiple state jurisdictions will have different laws depending on the state.

This can get a bit complicated for e-commerce stores, but boils down to a couple of basic things. You’ll usually need to:

  • Obtain an applicable business license to sell whatever you’re selling
  • Install on your website some form of age verification, as well as clear terms and conditions, to protect you from compliance liability

Be a good bouncer : Installing an age verification tool on your site

Age gates and confirmations

As an online retailer selling an age-restricted product, it’s important to do everything in your power to make sure you are following all laws related to sales to minors. Luckily, it’s fairly easy to put in an age verification tool on your Shopify website by installing one from the App Store.

These usually mean that you will have a self-reported check at the beginning of your site or when someone approaches a certain product collection, in which they say, “yep I’m old enough, thanks”.

Here’s are a couple of examples of a self-reported age confirmation gates.

There is, of course, the really big issue that any thirteen year old can pretend they’re 18 online. But, this is a risk in person as well, as someone can try to buy booze with a false ID just the same. Although age confirmation gates are an easy-to-install tool, they might not be that effective in actually deterring minors.

Credit card verification

The general rule of thumb is that someone who has a credit card (rather than a debit card) has to have been at least 18 to sign up, and therefore should be ok to buy something that is age-restricted to 18+. You likely won’t have to do much to verify anything - this should happen through your payment processor. But you can require that a credit card is used instead of a debit card. You can read more about reducing credit card fraud and other risks here.

This doesn’t do a whole lot for purchases with higher age restrictions, such as 21+ for alcohol in the United States. But for anyone else it’s usually a good step in the right direction.

Identity document scanning

Instead of simply asking for age confirmation, you can require that people buying age-restricted products send you a picture of their ID to prove they’re overage. This method takes more legwork on the part of your office, but could be significantly more effective in actually checking that you’re selling to someone who is old enough.

You will generally have to customise the checkout process to include a place to upload a scan or photo of their ID - otherwise you can simply require that they email you a copy of their ID, and notify all customers that they will have to be verified before their purchase is confirmed.

A couple of things to keep in mind if this is the route you want to go. People can still use a false ID, or steal someone else’s ID. You’re also collecting sensitive information, and it’s incredibly important to do all messages through a secure server so no hackers can get ahold of one of your customers’ IDs.

Purchase online, check ID in store or on delivery

This is another pretty common method, and one that probably works for most purchases. You can allow your customers to purchase anything online, inform them clearly before buying that they will have to be over a certain age, and have the courier who delivers the package verify the customer’s ID.

You can set this up by purchasing the extra age verification service from shipping couriers directly.

Know-Your-Customer checks

You can also buy Know Your Customer (KYC) checks with third party verifiers who are able to cross-check your customer with data they’ve purchased to tell you, “yes, they are who they say they are, and they are as old as they say they are” with more certainty.

KYC checks can cross-check data like electoral data, credit card and loan history, or other semi-public information that you might not have access to yourself.

We can help!

Elkfox is a Shopify Expert and can help you navigate setting up shop every step of the way. Talk to us.

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