Laws will take effect in Nevada and California that mandate EFT payments between retailers and wholesalers. Stepping into the electronic age and encouraging the use of technology is a good thing, mandating it is a different story.

In Nevada in May of 2025 and in California in January of 2026, retailers are either going to be required to pay wholesalers through EFT or credit card transactions. A retailer that paid with check or cash will be prohibited from doing so.

Government mandating payment terms between two private parties is bad enough, the details are worse.

Under the law, the wholesaler initiates the EFT payment from the retailer’s account. In other words, the laws allow the wholesaler access to the retailer’s account. They decide when payment becomes initiated. Many retailers run on small margins and with the alcohol industry shrinking, budgets are getting tighter. But under the law, the wholesalers dictate the terms of payment. So, a retailer that may want to delay payment to pay for rent for example, would not maintain this option, as timeliness of payment is dictated by one party. Negotiations between the parties on terms of payment is dictated not by market conditions but by government mandate.

Also, sometimes orders are not up to standard and there is a disagreement on what was delivered.  If there is a dispute between the two parties, it becomes very hard for the retailer to withhold funds in protest, as the wholesaler maintains control over the bank account’s payments.

These laws also provide wholesalers an unfair priority over other vendors. In California and Nevada, the states stepped in to ensure the wholesaler gets paid and has priority over any other vendor. This is especially concerning when a business goes into bankruptcy and there are secured creditors that are not going to get paid their full amount due. These laws ensure the liquor wholesaler gets priority over businesses that would be first in line in a bankruptcy proceeding.

The law poses an additional burden of added cost to the retailers. Checks are generally processed without a fee and there is no charge for paying cash. A transaction fee will usually apply to electronic transfers. This is something large chain retailers can negotiate, a luxury the small retailers don’t possess.  Under Nevada’s law the wholesaler does not pay any fees incurred by the retailer for EFT transactions. In other words, we are going to mandate the law and make you pay for it.

Legislation favoring the wholesalers is blatantly obvious and unfortunately begins to spread rapidly. Whether it is ignoring constitutional jurisdiction issues with fulfillment warehouse legislation or mandating that a wholesaler can invade a retailer’s bank account, it becomes a disturbing trend. Government should be impartial, unfortunately in the liquor world, it keeps on mandating winners and losers!