Confused about the legality of scanning IDs in your retail store? You’re not alone.
ID scanning laws vary by state. Each state has different requirements. In Nevada, for example, retailers are required to scan IDs for tobacco sales. Note: Nevada is the only state that requires ID scanning for cigarettes.
However, although you may not be required to scan IDs, it can help you stay compliant. ID scanning can help you catch fake IDs, reduce errors, and check driver’s licenses quickly.
Generally, you might choose to scan IDs based on the products you sell (e.g., tobacco, liquor, or cannabis). Or if your business must restrict access to underage guests (like a bar, dispensary, or nightclub). In these cases, you might be wondering:
This guide to ID scanning laws by state covers that and more. Keep reading to learn everything there is to know about using an ID scanner in your business.
A common question that we hear is: Is my business required to scan IDs before completing a purchase.
In most cases, you aren’t required to scan driver’s licenses. However, a few states do require mandatory ID scans in certain cases. They include:
Several states do require ID scanning technology for transactions like: check cashing, pawn exchanges, scrap metal sales, notary public, currency exchange, sale of cold/flu medicine, and controlled substances.
Am I legally permitted to scan IDs?
The answer is that yes, in most cases, your business can choose to scan IDs. New Hampshire is the only state that prohibits ID scanning, and Maryland has a bill under consideration.
However, each state has different requirements for:
To remain compliant, you must carefully consider your state’s ID scanning requirements.
In most cases, the business isn’t required to inform the customer before performing a scan. However, consent is required if biometric information will be collected like:
In these cases, the business would need a notification waiver to collect and store this sensitive data. Ultimately, review your state’s consent requirements prior to implementing ID scanning.
Several states protect businesses that scan IDs under “affirmative defense” laws.
In these states, using an ID scanner offers businesses legal protection if they unknowingly sell to a minor despite a seemingly valid ID. The scan acts as proof that the business took “reasonable” precautions to prevent an underage sale.
For example, if an underage guest at a bar was using a fake ID and it passed an ID scan, the business could be potentially protected from fines and lawsuits (in certain cases and for the sale of certain products). These laws vary by state.
For example, in Arizona, affirmative defense relates to alcohol sales. States with affirmative defense laws with ID scanning include:
Retailers and bar owners face pushback from customers regarding ID scans. Many customers have privacy concerns. Therefore, if you choose to implement ID scanning, you might be wondering:
ID scanning involves using a device to scan the barcode of an ID document (driver’s license, passport, state ID card, or government-issued ID). A scanner reads the information, determines if the ID card is legitimate, and can then store the data.
Currently, there are no federal laws regarding ID scans. However, there are laws that govern consumer privacy. Therefore, businesses should choose an ID scanner that’s compliant with these laws, which regulate the storage and transfer of personal information.
Yes, a customer can refuse an ID scan. In the cases outlined above (when ID scanning is mandatory), a transaction can’t legally take place.
But what if an ID scan isn’t legally required?
Business owners should set their own rules. Outside of New Hampshire (where ID scanning is prohibited), a business owner could either:
Each state places limitations on the types of information that can be collected and stored. Most states allow ID scans to collect:
Some ID scanners can collect more detailed information, including the customer’s address, image, or even biometric information. However, the customer’s consent may be required for more sensitive information.
States govern data retention timeframes and may even have special requirements by industry. Generally, be aware of your state’s PII requirements (personal identifiable information) and timeframes.
However, many states do not have laws. For example, Alabama and Colorado do not regulate a business’s ability to retain information from a scan.
Be aware of your state and local regulations. And choose online ID scanning software that allows you to customize data collection and retention parameters.
Some states require ID scanning for the sale of tobacco or alcohol. Yet, even when it’s not required, ID scanning can protect your business.
Eleven states offer protections for businesses that practice ID scanning for age-restricted products, so-called “affirmative defense” laws.
ID scanning offers protection for businesses selling age-restricted products. However, many states also require data retention for various transactions, including:
ID data retention varies by state. But in many, they require a photocopy of the driver’s license or a record of the customer’s data. In these cases, ID scanning can simplify these data retention requirements, and allow a business to process the transaction much faster.
Here are some additional ways that ID scanning is being used in business:
While ID scanning offers convenience and potential age verification benefits, you need to be aware of the potential risks. Many customers fear privacy breaches when they offer their ID for a scan. Therefore, it’s essential to build trust with customers (and use a reputable age verification platform).
Some of the risks include:
There are numerous benefits to using ID scans in your business. However, it’s imperative that you understand the requirements.
Because most states allow ID scans, it’s important that you consider:
These tools streamline transactions. But if they’re not secure, they can do more harm than good. Need a reliable provider? FTx Identity is a digital ID card scanning system that’s ideal for tobacco, alcohol and other age-restricted industries. Contact our sales team today to learn more.
