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SB 731

Liquor: other; payment of administrative fee to wholesaler for a payment dishonored by a financial institution; require. Amends sec. 903b of 1998 PA 58 (MCL 436.1903b).

2023-2024 Regular Session Introduced by Rosemary Bayer and 16 co-sponsors

Michigan requires alcohol retailers to pay wholesalers' administrative fees when their checks or electronic payments are dishonored, shifting bank-related payment failure costs to retailers.

referred to second reading
#liquor:other
0
WeVote Research Nonpartisan
Bill Summary · SB 731

Legislative bill overview

SB 731 amends Michigan's liquor regulatory statute to require retailers to pay wholesalers an administrative fee when checks or electronic payments for alcohol purchases are dishonored (rejected by banks due to insufficient funds or other issues). The bill clarifies financial responsibility for payment failures in the wholesale-to-retail alcohol supply chain.

Why is this important

Bad checks and failed electronic payments create operational costs for wholesalers—bank fees, administrative processing, and collection efforts. This bill assigns those costs directly to retailers whose payments fail, potentially reducing wholesaler losses and discouraging retailers from submitting bad payments. For retailers, it adds a new financial penalty beyond the original transaction dispute.

Potential points of contention

  • Fee structure undefined: The bill requires an administrative fee but doesn't specify the amount, leaving wholesalers significant discretion in setting costs and creating potential for disputes
  • Small business impact: Smaller retailers operating with thin margins may face disproportionate burden if payment failures occur, potentially harming already-vulnerable businesses
  • Double jeopardy concern: Retailers may argue they're penalized twice—through the original debt plus an additional administrative fee—without standard consumer protections available in other industries

Compiled from official sources — confirm details with the bill’s official record.

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