The Alabama Court of Civil Appeals recently ruled that the Alabama Beverage Control Board (ABC board) can impose a convenience fee for credit card purchases of liquor. This decision affects many liquor licensees across Alabama who had challenged the fee, claiming it violated state law.
The case, filed on August 7, 2026, involved the Alabama Beverage Licensees Association and numerous liquor businesses, including Kristi, LLC, Supreme Properties, LLC, and Pinki's Fine Wine and Spirits, Inc. They argued that the ABC board's 2% convenience fee for credit card transactions was unlawful under Alabama Code § 28-3-53.2. The plaintiffs sought a declaration that the fee constituted an illegal increase in the wholesale price of liquor.
The dispute arose after the ABC board began charging the convenience fee, which the plaintiffs claimed was a violation of the statutory cap on the markup for liquor sales. They contended that the fee effectively raised the cost of liquor beyond the 16.99% limit set by law. The trial court ruled in favor of the ABC board, leading to the appeal.
In its ruling, the court affirmed the trial court's decision, stating that the convenience fee was not part of the wholesale cost of liquor. The court explained that the fee was specifically for customers who chose to pay with a credit card, distinguishing it from the wholesale price of the liquor itself. The court cited, "The wholesale cost of a case lot of liquor is not changed by the imposition of the convenience fee solely on customers that choose to pay by using a credit card." This ruling was made by Judge Edwards, with concurrence from Judges Moore, Hanson, Fridy, and Bowden.
The court also noted that the convenience fee was authorized under Alabama Code § 41-1-60(e), which allows boards to impose such fees to offset credit card processing costs. The court found no ambiguity in the law, rejecting the plaintiffs' arguments that the fee constituted an unlawful markup.
This ruling has significant implications for liquor licensees in Alabama, as it confirms the ABC board's authority to impose convenience fees for credit card transactions. The decision clarifies that such fees do not violate the statutory cap on liquor pricing, allowing the ABC board to continue its current practices.
The ruling may set a precedent for similar cases in the future, as it reinforces the distinction between transaction-specific fees and wholesale pricing. Liquor businesses that rely on credit card transactions may need to adjust their pricing strategies to account for these fees.
Looking ahead, the plaintiffs may consider appealing the decision to a higher court, although details on any potential appeal were not available in the court filing. The outcome of this case could influence future regulations regarding credit card fees in the beverage industry.