Dispelling the Top 5 DtC Shipping Myths

Lizzy Connolly
August 16, 2022

Direct-to-consumer (DtC) alcohol shipping can at times seem convoluted and increasingly complicated. States continue to evolve their DtC shipping requirements, which can understandably create some confusion over what is and is not allowed. However, working with the right partner can help to clear up some of that confusion.

Here are some of the top misconceptions – and their corresponding truths – surrounding DtC shipping of beverage alcohol.

I can ship DtC anywhere

• Absolutely not. When DtC shipments occur – whether for beer, wine, spirits or cider – those shipping products need to adhere to the rules of the state where the consumer is located and will receive the shipment.

Rules differ by state and by product type. Just because you can ship wine DtC in one state does not mean that you can automatically ship beer to a consumer in the same location.

clipboard with check mark

Is age verification really that critical?

• Yes. It is illegal in every state to sell or provide alcohol to minors, even accidentally. Proper age verification protocols, including obtaining the signature of an adult who is over the age of 21 at the time of delivery, ensure that you stay compliant and show you are a positive member of the beverage alcohol community.

• Every state requires some level of action, whether it’s requiring at-delivery ID checks, collecting recipient signatures or both. Additionally, some states have stricter requirements, such as point-of-sale (POS) age checks. Check the rules of every state in which you want to ship.

sovos shipcompliantAfter I ship, it’s not my problem

• Even after you have shipped a product to the customer, the responsibility is not automatically shifted entirely onto the carrier or to the customer. Your DtC shipping license will be on the line should anything illegal occur (e.g., a minor receiving alcohol, a customer receiving a product in a state that does not allow DtC shipping of that product).

• You must use a compliant delivery service that abides with all licensing and reporting requirements imposed on them by the states. Currently, the USPS is prohibited from delivering alcohol in the country.

I don’t need to worry about sales tax

• You absolutely need to worry about taxes for DtC shipping of beverage alcohol. Know the rules for each state in which you are shipping because that establishes where you must remit sales taxes and which tax rules apply.

• If you are working with a marketplace, do not assume that they will automatically handle applicable sales taxes.

Vendor contracts are never too good to be true

• If it seems too good to be true, it probably is. DtC alcohol shipping often needs the support of third-party services, but it’s essential to ensure that all state laws are being followed.

• Make sure you know how a service works, what a third-party service will and won’t do, and that they understand how laws vary from one state to the next.

• At the end of the day, it’s your name on the bottle and your business that’s at risk. If a state finds your products are being shipped improperly, they’re going to have questions and will not accept “we were told it was fine” as an excuse.

Take Action

Learn more about the DtC shipping process and why compliance is critical. Contact our team and see how Sovos ShipCompliant can help.

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Author

Lizzy Connolly

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