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7 Ways You Could Lose Your Restaurant Liquor License

7 Ways You Could Lose Your Restaurant Liquor License

The world of restaurant licenses and permits in the US is a lengthy and expensive process. But obtaining a restaurant liquor license is usually key to financial success for most restaurants and bars. With food margins so thin thanks to spoilage and waste, alcohol is where many establishments make most of their profit. So if you lose your restaurant liquor license—especially if you get hit with a steep fine—it could be game over for your business.

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7 ways you could lose your alcohol license

  1. Not properly checking IDs
  2. Letting unlicensed or underage staff serve alcohol
  3. Allowing staff to drink on the job
  4. Letting guests drink in unlicensed areas
  5. Serving patrons who are visibly intoxicated
  6. Not having control of your guests
  7. Not keeping proper documentation

1. Not properly checking IDs

If you don’t properly check photo ID as required by state law (local liquor boards will often run sting operations checking for this), or serve minors alcohol as a result, you can lose your license. In fact, serving alcohol to anyone under 21 in the US is the most common reason a restaurant liquor license is revoked.

2. Letting unlicensed or underage staff serve alcohol

Many states require staff serving alcoholic beverages to obtain a permit or certification such as ServSmart or SmartServe before they can do so. If someone serves drinks without a permit, depending on which state you are in, your license can be revoked. Additionally, most states require anyone serving alcohol to be at least 18 years old (though it could be older), so that is something to keep in mind when you are in the hiring process.

3. Allowing staff to drink on the job

In many states, it is illegal to allow staff to consume alcohol while they’re still on shift and can result in you losing your liquor license. It’s important to stress the severity of drinking on the job to your staff and how it can negatively affect the business as a whole. This is also the reason why some bars or restaurants may not allow staff to drink at the establishment even off the clock, as an additional precaution.

4. Letting guests drink in unlicensed areas

If you have an outdoor patio or set up tables and chairs on the sidewalks during the summer months, your restaurant liquor license may not extend to those areas, depending on your state laws, the property lines or other factors. Before setting up and serving in an outdoor area, check to see if there are any additional permits or licenses you need to obtain.

Close up of a cocktail being poured from a shaker into a short glass with two large ice cubes and an orange peel twist on the rim.

5. Serving patrons who are visibly intoxicated

In order to avoid guests getting too intoxicated at your bar or restaurant, it’s important to cap the number of drinks they can be served within a certain time period and to offer them food and water between drinks. If a guest shows up to your establishment already intoxicated, offer them food, water or to call an Uber or cab for them, but let them know you won’t be serving them alcohol at your business.

If a bar continues to serve a patron who is visibly intoxicated, the bar, bartender and the license holder can all be held liable and forced to pay damages should there be any resulting personal injury, accident or death. The license holder could also lose their restaurant liquor license, permanently.

6. Not having control of your guests 

If your patrons are too loud or are too intoxicated or engaging in illegal behavior (even without your knowledge), you could be held liable for their behavior, especially if the police receive enough complaints from surrounding businesses, residents or other guests. If your guests are behaving badly and don’t respond to polite but firm requests to be more respectful of those around them, you’ll need to get them out of there.

7. Not keeping proper documentation

If it’s found that you don’t keep legitimate records, such as invoices or order sheets, that document where and when your alcohol was procured before serving, your license can be revoked. When you receive a delivery from one of your alcohol vendors, make sure they give you proper documentation and that you store the records in a safe and organized place where you can easily access it if needed.

It’s important to remind your staff of the seriousness of these actions and the effect they can have not only on your restaurant’s liquor license but also their own personal liability. If you’re looking for a technology partner to help you manage your operations and keep a closer eye on how product is moving, talk to one of our experts today to find out how Lightspeed can help.

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