The High Cost of Failing a Municipal Sting
Courtesy of www.cslea.com
The sale of alcohol and tobacco products requires owners to follow clear and concise policies to ensure compliance with state law. Any non-compliance could result in a wide range of negative consequences like fines, penalties, license suspension, and even jail time.
Let’s look at some examples:
FDA threatens to fine Walmart, Kroger and convenience store chains for selling tobacco to minors
Lincoln Walmart faces suspension or fine after 16-year-old sold alcohol
Four Fairfield businesses cited for selling alcohol to minors during decoy operation
Newnan Crossing RaceTrac beverage license to be reviewed for underage sale
Marion Wal-Mart liquor license suspended for 30 days (corridorbusiness.com)
Mount Pleasant Trader Joe’s beer and wine permit suspended after third underage violation
As you can see, failing to prioritize alcohol and tobacco compliance is simply bad for business. With so many possible penalties for selling alcohol or tobacco products to minors, it’s vital that business owners use every preventative measure available to reduce the risk of legal and financial issues.
Before we jump into the many penalties that business owners may encounter from a failed Sting, we must first define the two types of Stings: 1) Municipal Stings, and 2) Stings scheduled with Stinger Compliance.
Municipal Stings:
To keep communities safe, and to fund their departments, law enforcement agencies actively use undercover operatives, also known as “Stings,” to catch businesses in the act of selling age-restricted products to minors. If a Municipal Sting is failed, there will be consequences for the business owner and the employees involved.
Stings Scheduled with Stinger Compliance:
Stinger Compliance also conducts Stings, but they are funded and managed directly by the business owners as a preventative measure. Bar, restaurant, and shop owners can schedule Stings with Stinger Compliance to ensure their staff members are checking for identification and following the law.
If a Sting scheduled with Stinger Compliance fails, there are no fines, penalties, or risks for the business owner. Instead, a report is provided to the business owner providing details on the staff’s level of compliance and areas where re-training is needed.
It’s important to note that the cost of a failed Municipal Sting far surpasses the small fees charged for a preventative Sting with Stinger Compliance. In this blog, we’ll give an overview of the many potential ramifications of selling alcohol or tobacco products to minors during a Municipal Sting.
What is the true cost of failing a Municipal Sting?
No matter the type of venue or business model, there will be repercussions if caught selling age-restricted products to minors – that is, anyone under the age of 21. The repercussions can include any, or all of the following: legal costs, jail time or probation, fines, loss of licensure, damaged reputation, and employee replacement costs. Let’s dive a bit deeper into the many possible costs.
Disclaimer: Depending on the state’s laws, business owners and the staff members involved can face penalties and fines. It is encouraged that business owners speak to a lawyer to fully understand local laws concerning the sale of alcohol or tobacco products. We are not lawyers and cannot provide legal advice.
Legal Costs
In most states, selling alcohol or tobacco to a minor can result in a misdemeanor. In some cases, employees can face felony charges if someone is killed or seriously injured.
If staff members or business owners are charged with misdemeanors or felonies, legal fees will be incurred. It’s recommended that a lawyer with specialties in this area is hired, though they can cost hundreds of dollars per hour. In the end, individuals and corporations can owe hundreds of thousands of dollars over the course of a lengthy court case.
Damaged Reputation
The saying “all publicity is good publicity” does not apply in the case of failing a Municipal Sting. Failing a government-funded sting operation can result in your business (and even the employee’s name) being listed in news articles reporting on the results of the sting operation. Also, if a business’s liquor or tobacco license is terminated, signage is required by law to be placed in a conspicuous location for all customers to see.
This kind of publicity and damage to reputation can be a killer for businesses in locations where communities choose to pull their support from establishments known for causing harm to the community.
Jail Time or Probation
Individuals caught selling to minors may even be ordered to serve time in jail. In many states, the guilty party may spend up to 12 months in a state jail or on probation. Depending on the individual’s prior record, the penalty and duration of jail time will vary.
Fines
If an individual or business owner is only subjected to paying fines, they may consider themselves lucky. However, the size of the fine depends largely on the issue at hand. Fines can range anywhere from $200 to $10,000. They may also be charged to the individual, the employee, or both depending on the situation.
Some factors that determine the size of the penalties include the state where this incident occurred and the history of offenses. For example, there are different fines for 1st, 2nd, and 3rd offenses.
Loss of Licensure
In most states, failing a Municipal Sting multiple times can result in the revocation of your license to sell age-restricted products like alcohol and tobacco. This, of course, is devastating to business owners who depend on the sale of these products to pay their rent and operational costs.
A byproduct of losing a liquor or tobacco license is the inability for staff members to make ends meet, thus forcing them to resign. Without the ability to pay the bills or staff members to keep the doors open, business owners can find themselves closing up shop permanently.
Licenses, once revoked, are difficult, but not impossible, to reinstate.
Employee Replacement Costs
In the case where an employee is caught serving age-restricted products to minors, that employee may become terminated by the business owner. In this case, it will require the employer to source, interview, hire, and train a new employee.
The cost, both mentally and financially, of hiring new employees is something to be considered by business owners.
Costs of Failing a Sting in Georgia
It’s vital that Georgia business owners review the Georgia State Code as well as employ a lawyer to represent them in the event of a failed Sting or legal issue concerning the sale of age-restricted products. Below is an excerpt of the Georgia Code on the sale of alcohol that highlights the many repercussions of selling alcohol to a minor.
Rule 560-2-2-.32 Notification of Disciplinary Action:
Disciplinary action as used in this Regulation means any action taken by any municipal, county, state or federal agency against the Licensee, its employees, or its Place of Business including but not limited to:
Arrests by local, state, or federal authorities of the Licensee or any of its employees;
Citations issued by local, state, or federal authorities, to the Licensee or any of its employees;
Indictments, presentments, or accusations in any local, state, or federal courts against the Licensee or any of its employees;
Convictions of, or penalties imposed pursuant to a plea of nolo contendere or non vult against the Licensee or any of its employees in any local, state, or federal court;
Penalties imposed by any regulatory agency against the Licensee or any of its employees; or
Any other written charges or reprimand by local, state, or federal authorities.
Traffic citations that do not result in arrest, written to the Licensee or any of its employees need not be reported to the Commissioner or the Commissioner's agents.
Civil actions or accusations against the Licensee, or any person, firm or corporation holding a financial interest in the license, shall be reported in accordance with paragraph (1) of this Regulation.
Civil actions or accusations against employees of the Licensee need not be reported.
Here are two rules that should be noted for business owners that sell tobacco products:
Rule 560-8-1-.04 Violations: Unlawful Activities - General
Any person holding any license, permit, or registration issued pursuant to the Code and these regulations who violates any provision of the Code or these Regulations, or directs, consents to, permits, or acquiesces in such violation, either directly or indirectly, shall by such conduct, subject the license to suspension, revocation, or cancellation.
For purposes of administering and enforcing this Act, any act committed by an employee, representative, or agent or Representative of a Licensee shall be deemed to be an act of the Licensee.
It shall be a violation of this Act and these regulations for any Licensee, permittee, or registrant to permit any person to engage in any activity on the premises for which the license is issued or within the Place of Business, which is in violation of the laws or regulations of any federal, state, county or municipal governing authority or regulatory agency.
With respect to any such activity, it shall be rebuttably presumed that the act was done with the knowledge or the consent of the Licensee; provided however, that this presumption may be rebutted only by evidence which precludes every other reasonable hypothesis such that such Licensee did not know, assist or aid in such occurrence, or in the exercise of full diligence could not have discovered or prevented such activity.
Rule 560-8-1-.11 Sales to Minors - General
No licensee, employee of such licensee, representative, or any person acting on behalf of such licensee shall sell or barter, directly or indirectly, tobacco products, tobacco-related objects, alternative nicotine products, or vapor products to any person who is under 21 years of age. Any act committed by an employee, representative, or agent of a licensee shall be deemed to be an act of such licensee.
Preventative Measures
To prevent the failure of a Municipal Sting, business owners must be aware of any risks. Stinger Compliance partners with business owners by completing risk-free Stings at bars, restaurants, shops, gas stations, and more. Our secret shoppers are above the age of 21 and therefore, are able to legally purchase alcohol or tobacco products.
During a Sting with Stinger Compliance, our Stingers anonymously purchase alcohol or tobacco products and give you a virtual report on the level of compliance at your place of business. Stinger Compliance offers packages that check if employees are verifying customers have valid identification as well as packages that add custom survey questions about the quality of service or cleanliness of the facilities.
By understanding the level of compliance in your daily operations, employees can be re-trained or replaced before real legal issues arise for your business. Stinger Compliance brings awareness to business owners and helps prevent failed Municipal Stings.
Ready to get started? Book your first Sting with Stinger Compliance today!
