Research Brief #4: It’s the manager — stupid! 
A legal action to reverse the revocation of a liquor license in Albuquerque, New Mexico in 2011 provides an important lesson for operators about preventing underage sales.

RRForum
By Brad S. Krevor, Ph. D, Director
December 7, 2021

Rudy’s Red Barn Liquor in Albuquerque was cited for four underage sales violations within eighteen months, triggering a license revocation under New Mexico’s strict and aggressively enforced alcohol sales laws. Since a New Mexico liquor license can be sold for tens of thousands of dollars, but not if suspended or revoked, Rudy’s Red Barn Liquors was highly motivated to ask the state court to reverse the decision of the New Mexico Alcohol and Gaming Division.

The lawsuit raised seven (!) arguments against the validity of the revocation. The central argument was that revocation is punitive, it should apply only to wrongdoers, and Ruby Red Barn is not a wrongdoer because of the demonstrable steps it took to prevent sales to minors.

Police records showed that:

• in the first inspection, the clerk asked for an ID and the underage decoy presented a vertical ID, indicating < age 21 (IDs for those 21 and older are horizontal), but the clerk made the sale.
• In the second inspection, the facts were identical to the first inspection.
• In the third inspection, the clerk recognized that the vertical license indicated the customer was underage but sold anyway, commenting that he knew there were stings underway but the decoy “didn’t look like the type who would be part of a sting.”
• in the fourth inspection, the clerk examined the vertical ID and said, “We’re not supposed to take these IDs but for you I will.”

In all the inspections, police found that: specialty calendars and signage (indicating that vertical IDs would not be accepted) were in plain view; clerks had completed a New Mexico responsible server training program; and clerks had signed a document affirming that they had been trained to comply with the age 21 law.

In its filings, Rudy’s Red Barn Liquors pointed to all the RR practices that it had put into place and noted that in the final two stings, the clerks acknowledged that they were acting in direct violation of store policy. The operator argued that it “did everything in its power to avoid sales to minors.” But the judge replied: “As evidenced by four sales to minors in 15 months, Appellant apparently did not do everything he could to avoid sales to minors.”

The operator was right: it had put extensive RR practices into place. But the judge was also right: the operator had failed to get its staff to follow store policy.

An operator must train staff on ID-checking policies and the protocols that should be used to determine that an ID is authenticate and belongs to the customer who presents it. But policies and training per se are not enough. If the operator does not also make the case for staff buy-in to these policies, and following the protocols, that establishment is vulnerable. Police and regulators hear the same complaint from operators over and over: “But I told (the offending clerk or server) not to sell to anyone without a valid ID!” — often followed by “and that I’d fire her/him if she/he did.” Telling not to sell to a minor is not as effective as explaining why preventing underage sales is important both to your business and to them as well.

The Take-away. RRForum’s research with a large national chain showed clearly: Stores whose managers remind staff all the time of the need to check IDs, and the importance of refusing underage sales, have the very best compliance rates. Without staff buy-in, all the signage, training, and technologies to verify the age of a customer and authenticity of the ID may go for naught. Sales to minors may be the staff member’s fault but it is also the operator’s responsibility to prevent that from happening. 

A future Research Brief discusses how to strengthen staff buy-in by using incentives for staff who check IDs in compliance checks or mystery shops.