Why is ecommerce for beverage alcohol different?
Some aspects of Thirstie's platform may seem unfamiliar to developers who have worked on other ecommerce platforms in a non-beverage alcohol context. This guide provides an overiew of how regulatory scape and compliance concerns shape the user experiences for the online sale of wine, beer and spirits on sites supported by Thirstie's ecommerce solutions.
Note: This guide is for informational purposes only and is not legal advice. Consult your legal counsel for compliance questions.
More than legal drinking age: the three-tier system
The most obvious and well-known requirement in selling beverage alcohol, through traditional brick and mortar channels as well as online, is verifying that the purchaser is of legal drinking age. Once you have satisfied age verification, however, the broader requirements of three-tier compliance come into play.
Under 21st amendment to the U.S. Constitution, which repealed prohibition, the states have the ability to regulate commerce in beverage alcohol. This means that the 50 states, plus Washington D.C, can each take different approaches to regulating the sale of alcohol. While the laws vary by state, they all follow the "three-tier system," which separates the industry into the following tiers:
- Suppliers, i.e the wineries, breweries and distilleries who produce or import beverage alcohol;
- Wholesalers and distributors; and
- Retailers, the liquor stores, package stores, grocers and restaurants who sell to the public.
Both the states and the federal government play a role in licensing and regulating the activities of each of the tiers.
Like other providers who provide services to licensed entities in the beverage alcohol industry (such as credit card processors, point-of-sale systems, etc.) third-party ecommerce platforms, like Thirstie, are not directly regulated under the three-tier system. Third-party service providers supply the infrastructure for the tiers to operate online while respecting these boundaries.
What does Thirstie do?
Compliance is ultimately the responsibility of licensed entities. Thirstie's ecommerce platform allows licensed retailers to sell online through multiple channels, including your website, while ensuring that non-retailers (such as brands and suppliers) don’t engage in retailer-only activities. This allows licensed entities in the three-tier system—the suppliers, wholesalers and retailers—to perform the same functions in an online context as they do in traditional brick and mortar commerce.
Key points:
- The Thirstie Network is an "open platform" that any licensed retailer can join if they meet minimum requirements for handling online orders.
- The licensed retailers control what channels display their inventory, and what products are available.
- The retailer determines what price to charge.
- Retailers control inventory, pricing, and order acceptance/rejection.
- All commercial activities involving the sale of alcohol are the retailer's responsibility.
- Non-retailers who integrate with Thirstie have no input or control over the selection of retailers, which retailers are displayed on the website, or on pricing.
Thirstie also provides services to the retailer that they otherwise would have to obtain from other service providers, such as credit card processing, fraud management and shipping/delivery logistics.
UX implications
Age gate: Requiring the purchaser to verify that they are of Legal Drinking Age is the bare minimum for beverage alcohol compliance. Websites which provide information about beverage alcohol products and are integrated with Thirstie may opt for different approaches to collecting this information, but Thirstie's checkout will not allow a user to complete a purchase without confirming LDA.
Address entry: We collect address information early in the user journey so that we can identify retailers who can legally sell to the consumer.
PDP: We display the name of the retailer(s) who are offering products for sale, and take steps make clear to the consumer that beverage alcohols products are not being sold or fulfilled by Thirstie or any other unlicensed entity. We support different user experiences that allow you to be confident that you're site is not overstepping three-tier boundaries.
Terms and Conditions: Since all commercial aspects of ecommerce are occurring on the Thirstie platform and are under the control the licensed retailers on the, Thirstie's terms and conditions and privacy policy must be displayed. They are included in the appropriate components if the site uses the Thirstie SDK.
Checkout: Thirstie's checkout pages provide clear messaging to the user that purchases are being fulfilled by licensed retailers. The checkout process also ensures that payments are directly between the consumer and the retailer.