Nov 18, 2002
ID'ing a Problem
By Mitch Morrison
Hit one too many times by sting operations in 2000, Jeff Trendler lost patience — not with state enforcement officials, but his clerks.
"It was very frustrating," said the general manager at Phoenix, Ariz.-based Express Stop Inc., a 30-unit convenience store chain. "We had a case where we had training one day and that night a clerk who passed the training sold alcohol to a minor.
"One of the most difficult challenges for us was getting the clerks to buy into the need to card. Instead, many of them were just blatantly disregarding the rules. It was discouraging."
Smacked with eight to 10 citations of selling alcohol to minors, Express Stop invested two years ago in an electronic age verification unit developed by Legal Age Security Software of Northern California. "The impact has been tremendous," Trendler said. "We've seen a huge jump in our success rate. We haven't had an alcohol violation in over a year and a half."
Suddenly, those stings don't hurt quite like they did in 2000.
A technology relatively new to the convenience business, age identification, both in stand-alone and integrated point-of-sale systems, is only a few years old and found primarily at larger chains and oil companies fearful of negative redress brought on by wrongful sales.
"A very small percentage of convenience stores have any kind of age verification equipment. Reliance is on the store clerk," said John Hervey, chief technical officer for the National Association of Convenience Stores. "Because of all those sting operations on tobacco and beer, you want to have an affirmative defense. You want to be able to say, 'Yes, I scanned it. Yes, I have a way to tie the transaction to the piece of equipment.'"
Age-verification devices are capturing unprecedented interest, particularly in the wake of Sept. 11, which spurred intensified screenings of counterfeit identifications. Today's age identification tools are often tapped by law enforcement and other government agencies that, through a simple swipe of a magnetic stripe or bar-code driver's license, can unearth a treasure of information.
For convenience stores and the retail world, the purpose of electronic age identification is more parochial and less sophisticated. Theirs is a business of age-restricted products. "Without age verification you don't know who you're sell-
ing to," said Beth Chamberlain, director of age verification sales for Intelli-Check Inc., the Woodbury, N.Y., proprietor of IdentiScan and Intelli-Check products.
"You could be selling to minors or you could be okay. If you ask for a driver's license, it could be real, it could be fake," she said. "You don't know without having an age verification system that can tell you if the license is authentic or counterfeit."
The spurt in age-verification suppliers can be linked to the 1998 national tobacco settlement that has underwritten increased vigilance in local- and state-sponsored stings. Rarely does a week pass without the announcement of another sting.
In Iowa, enforcement officials stepped up compliance checks about two years ago with money from the state's lawsuit settlement with tobacco companies. Sting operations found 12 percent of retailers targeted in the operations fell from 18 percent in 2000 to 12 percent the following year. About 33 percent of businesses had sold to minors before increased enforcement, a tobacco enforcement official said.
In Hawaii, heightened sting operations are credited for quashing the state's infamous reputation for selling smokes to minors. In 1996, Hawaii had one of the worst track records in the country with 43 percent of stores caught selling tobacco to teens. This year, the figure plunged to 6 percent.
In July, Pennsylvania Gov. Mark Schweiker signed sweeping legislation to crack down on merchants selling cigarettes to minors. "Too many young Pennsylvanians aren't getting the message that smoking kills," he said upon signing stiffer legislation that included tripling the state's per-pack tax to $1. "Last year, 12.8 million packs of cigarettes were sold illegally to kids. That's 12.8 million reasons to crack down on illegal sales, and that's exactly what this law will do."
The most notorious incident occurred in Burnsville, Minn., where a SuperAmerica gas station earlier this year had its tobacco license suspended for one year after police caught clerks selling to teens for the fifth time in two years.
Although the suspension was lifted in July after parent company Speedway SuperAmerica agreed to pay more than $67,000 toward a youth-smoking prevention program, the trend across the country is clear — stings are up, putting retailers on notice.
"Stings are the only motivation to make some merchants comply with the law," said Elaine Kirby, spokeswoman at Legal Age Security Software in Placerville, Calif., which lets operators track the clerk and shift by producing batch reports for all three shifts. "Convenience stores and gas stations are the primary targets. Because they're so high-profile, police are always zoning in on them."
"Retailers don't know how much they need an age identification system until they have it and see how effective it is," added Mark Baughman, president of Torrance, Calif.-based TriCom Card Technologies Inc., maker of ID-e reader, which reviews magnetic stripe and, with upgrades, bar-code-encrypted licenses. "The mindset is it's another piece of equipment sitting on my counter. It's something that they really don't want, but need."
Two and Two Is . . . ?
The problem, according to those interviewed, is that some clerks, quite frankly, can barely count. Subtracting 1988 from 2002 may result in 24 and an illegal sale of smokes or beer.
"We found that some clerks have troubles calculating dates," said Mike Cox, vice president of operations at the 28-unit Corner Pantry chain, the c-store division of Tucker Oil Co. in Columbia, S.C.
"Some of their math skills don't calculate that quickly. This takes the human error out of it. It's virtually impossible to make a mistake," he said of the IDentiScan system rolled out chainwide. "Just swipe the license and if the light turns green, the transaction goes forward. If it's a no-go, the light is red."
Like many retailers, Corner Pantry's move to electronic age identification was driven by heightened undercover buys that Cox described as "almost entrapment because they get someone who looks older and who happens to be just under 21."
Nonetheless, to avoid any pitfalls, clerks at Corner Pantry are required to card anyone who looks 30 or younger. While violations have fallen dramatically, Cox does run into an occasional problem. "In fact, just last night," he said in a September interview with CSNews, "we had an incident where the cashier didn't use the card reader and we got burnt.
"She looked at the ID and figured it out in her head. She was wrong and they [local law enforcement] got her," Cox continued. "She was lazy. She was a new employee, who like all employees, knew how to use it, but in this case, chose not to. This was the first incident we've had in eight months."
The employee was terminated. "One strike and that's it," Cox said
Beyond Taboo Items
In addition to blocking improper sales, age-verification equipment serves another capacity — to help corroborate that the customer on the card is the one conducting the transaction. This is critical for stores that cash checks. In such cases, these pieces of electronic gadgetry must go beyond basic age identification purposes.
While no information exists in the c-store segment, according to Food Marketing Institute's recently published 12th annual loss prevention survey, worthless checks cost supermarkets roughly $192 million. The report added that grocers accepted an average of more than 250,000 bad checks per company and that the average value of a bad check was $68.37.
The problem is much more severe when encapsulating the entire retail marketplace — between $10 billion and $25 billion, said Larry Gilbert, CEO and president at Nashua, N.H.-based Identico Systems. Identico's True ID electronically scans a customer's photo ID, then transmits the data to Identico's database, where it is stored.
"When the customer makes another transaction, that person's digital photo image comes up so the clerk can compare that to the person in front of you," Gilbert said. "We look at it as another loss-prevention tool. Our system can block a transaction based on a mismatch of the front and back sides of a driver's license."
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