Build a Winning Business Case for ID Validation in Your Delivery and Retail Apps

Delivery companies, liquor stores and grocery retailers – particularly those delivering or handing over online orders with age-restricted goods such as alcohol – face a growing problem in the US: the prevalence of fake ID usage.

As well as significant risk of legal ramifications, counterfeit IDs can have an unacknowledged impact on delivery businesses by causing operational inefficiencies and hampering revenue growth.

One of the roles within a business that can help to combat these challenges is the product manager, ensuring a suitable technology solution for ID validation is urgently built into the roadmap. With other initiatives jostling for priority, it can be difficult to get yours signed off.

This guide will help you make the business case for ID validation technology.

Here’s a stark statistic from our recent report – US Fake ID Research: Prevalence, Impact, and Opportunities: 30% of 2000+ respondents said they know of someone currently using a fake ID for alcohol deliveries. That includes a quarter of respondents under the age of 21 – the legal alcohol purchase age in the US. Meanwhile 56% are using fake ID to purchase alcohol in liquor stores.

This poses a real risk when delivering and handing over age-restricted goods. How can your frontline workers be confident that they’re handing the goods to someone of legal age?

ID checks can, of course, mitigate that risk somewhat, but with fakes so prevalent throughout the US, ‘easy’ to obtain, and growing increasingly sophisticated and harder to detect, there remains a major element of doubt.

That’s not to mention the increased impact on delivery and order collection operations; these checks take time, which can drastically increase both the store associates’ and the delivery team’s workload (plus operational issues when ID checks are failed), and cause customer friction at a time when they’re looking for speed and efficiency.

Read more about the additional risks posed by fake IDs for retail businesses here.

On the other hand, a software that provides robust ID checking functionality can lead to many advantages from a business operations perspective, such as more efficient workflows and growth and revenue opportunities.

Lack of a current ID verification solution is commonplace

Frontline workers often have to rely on manual ID checks, which only go part-way to ensuring compliant delivery. For example, 67% of delivery drivers report that they have no ID verification solution on the devices they use for delivery processes.

Scandit’s data showed that most people believe manual ID checks are ineffective; just 14% of respondents consider it to be the best method. Meanwhile, over half of people (51%) say they believe ID scanning technology would be the most effective at catching fake IDs.

Both delivery drivers and grocery retailers at large can be deemed legally responsible for giving alcohol to a minor, with potential punishments including suspension or revocation of alcohol delivery licenses, and large fines. That’s not to mention the resulting reputational damage.

To minimize disruption for age-verified delivery and pick up, delivery workers and store associates can be equipped with ID validation technology which allows them to accurately and efficiently verify that the order recipient is of legal age – and is using a legitimate form of identification within the existing processes and without increasing dwell time.

The benefit to you and your business? The risk of one of your workers handing over alcohol to a minor is pretty much eradicated. That means you’re much more compliant with the stringent laws in place, and are able to overcome the challenge of counterfeit ID documents.

Identifying the issue of fake IDs and the potential negative consequences is only the first step. Next, you need to build a convincing case for prioritizing a technology solution to overcome the problem, amidst all the other myriad demands a product manager is always juggling. Here’s how to do it.

Define the problem

Clearly communicate the issue and how it can affect the business. Include the potential consequences, such as:

• Financial losses and fines
• Legal risks
• Reputational damage

You should also highlight the people who will be affected, such as employees, customers, and regulators.

Use data to demonstrate the importance of having an ID validation and verification workflow embedded into your application.

This could include internal company metrics such as:

• Number of fake ID incidents
• Financial losses from fake ID usage, such as loss of revenue, fines, chargebacks and legal costs
• Correlations between fake ID usage and customer churn

You could also use industry research and figures, such as those outlined earlier in this piece from Scandit’s first-party research into fake ID usage in the US.

Showcase the opportunities

Alongside the negative impacts of not having ID validation technology, also take the chance to share some of the benefits from having one implemented. For example, you might take the opportunity to show how the business could:

• Improve operational efficiency by handing over orders faster (for in-store or curbside pickup), or getting more deliveries done (by scanning within a second rather than the lengthier process for manual ID data entry)
• Seize new revenue opportunities
• Expand into more (and perhaps more highly regulated) regions
• Improve customer experience
• Increase employee satisfaction

Define the capabilities required

As part of the business case, ensure there’s a clear understanding of what capabilities the chosen ID validation technology will provide. Some of the capabilities to consider might include:

• ID document types to be accepted and scanned
• Speed and performance
• Robust data security and privacy (e.g. on-device processing)
• Integration capabilities with existing hardware, software, and systems
• A simple user experience and interface (e.g. integrated viewfinder)

Calculate the return on investment (ROI)

As with any project, implementing an ID validation solution will come with its own implementation costs. Your business case is therefore the place to highlight how that cost will justify itself in the long term.

Focus on the areas where having a solution will bring positive impacts to the business overall, such as:

• Increased operational efficiency for age-verified deliveries and online order handovers
• The ability to seize new revenue opportunities by serving more customers, and new markets and regions
• Increased revenue opportunities through improved customer loyalty
• Reduction of losses caused by fake ID fraud or mistaken rejection of valid IDs
• Decreased chance of legal costs and fines
• Fewer chargebacks caused by undeliverable orders

You can use existing internal numbers such as the average number of online orders including age-restricted goods or alcohol deliveries made per day, and the average revenue generated from those orders, to calculate how much revenue would be lost over a given time period if your license was to be revoked.

Prioritize the user experience

It’s important to focus your business case on how the solution will benefit the business overall. To do this effectively, showcase the advantages of user adoption. That means illustrating the improvements to the user experience – in this case, frontline workers and drivers.

If the new (compliant) workflow is more convenient, store associates and delivery drivers will prefer it to the previous process, leading to greater efficiency and employee satisfaction.

Spotlight key features that will help with this user adoption, such as:

• Any ID scan mode, removing the need for manual data entry and scrolling
• Integrated torch feature to support scanning in low light
• Viewfinder and text prompts to support the scanning process

You can also highlight the benefits for the end customer, such as faster order collection/delivery times, increased trust, and loyalty.

When choosing your preferred ID validation solution, keep in mind the key performance objectives.

Efficiency: Your solution needs to ensure a quick and seamless delivery process, empowering delivery drivers to quickly complete the checks without standing at the doorway judging by eye. The same goes for retailers’ store associates, at the order collection point (in-store or curbside).

• Accuracy: Our research indicated that 1 in 10 people have had a valid ID rejected as fake by a business, which is damaging to the customer experience. The solution needs to be accurate and work effectively.
• Reliability: The solution needs to work in all conditions (e.g. low light), across a wide range of devices and geographical locations. Some solutions depend on an internet connection to work effectively, which isn’t always guaranteed, particularly in remote areas, so on-device processing is helpful here.
• Security: Be mindful of solutions that require data to be shared with third parties or that are not compliant with data privacy laws and business regulations.
• Integration: Choosing a solution that is tested and comes with a foolproof UI can help to save time by drastically reducing the number of hours required for user testing.

Without an adequate ID validation solution, your business is at risk of breaching compliance laws and regulations. You may also be missing out on potentially lucrative opportunities to enter highly regulated new regions or markets where competitors fear to operate.

It’s essential that you choose a solution that removes doubt and enables frontline workers to efficiently, accurately and securely check IDs before handing over age-restricted goods.

That’s where ID Validate comes in. Scandit’s fully customizable SDK allows you to build ID scanning and fake ID detection workflows into web and native applications.

Compatible with both the handheld computers and smart devices that delivery drivers depend upon, ID Validate offers unrivaled accuracy, speed and security:

• Scan IDs in 1 second
• Looks at hundreds of characteristics extracted from an ID and analyzes them to check for forgery errors in order to verify if an ID is real or fake
  Secure, on-device processing with no third-party data sharing
• Transmitted usage data is encrypted and anonymized, with no personal data stored on the device
• Compliant with data privacy laws and business regulations, including GDPR and CCPA
• Scans over 2,500 ID document types
• Up to 100% scan accuracy (for PDF417 barcodes. 98% accuracy for Machine Readable Zones (MRZ), 95%+ accuracy for Visual Inspection Zones (VIZ))

Ready to integrate ID validation and increase compliance, boost efficiency and increase revenue?

Find out more about ID Validate, or contact us to discuss your challenge and how we can help solve it.