185—16.91(123) Return of alcoholic liquor, wine, and beer. An industry member may accept the return of alcoholic liquor, wine, and beer for ordinary and usual commercial reasons but is not obligated to do so.
	16.91(1) Ordinary and usual commercial reasons for exchanges and returns.
	a. 	Defective products.
	(1)	Products which are unmarketable because of product deterioration, leaking containers, damaged labels, or missing or mutilated tamper evident closures may be exchanged for an equal quantity of identical products or may be returned for cash or credit against outstanding indebtedness.
	(2)	Freshness dating. An industry member may accept a return of beer for cash or credit against outstanding indebtedness or exchange the beer for freshness reasons provided all of the following conditions are met:
	1.	The manufacturer of the beer has policies and procedures in place that specify the date the retailer must pull the product.
	2.	The industry member’s freshness return/exchange policies and procedures are readily verifiable and consistently followed by the industry member.
	3.	The beer container has identifying markings that correspond with the pull date.
	4.	The beer product pulled by the trade buyer may not reenter the retail marketplace.
	b. 	Error in products delivered. Any discrepancy between products ordered and products delivered may be corrected, within a reasonable period after delivery, by exchange of the products delivered for those which were ordered, or by a return for cash or credit against outstanding indebtedness.
	c. 	Products which may no longer be lawfully sold. Products which may no longer be lawfully sold may be returned for cash or credit against outstanding indebtedness. This would include situations where, due to a change in regulation or administrative procedure over which the trade buyer or an affiliate of the trade buyer has no control, a particular size or brand is no longer permitted to be sold.
	d. 	Termination of business. Products on hand at the time a trade buyer terminates operations via cancellation of the trade buyer’s license or permit may be returned for cash or credit against outstanding indebtedness. This does not include the temporary seasonal shutdown of a trade buyer holding a 12-month license or permit.
	e. 	Termination of franchise. When an industry member has sold products for cash or credit to one of its wholesalers and the distributorship arrangement is subsequently terminated, stocks of the product on hand may be returned for cash or credit against outstanding indebtedness.
	f. 	Change in product. Except as provided in paragraph 16.91(2)“b,” a trade buyer’s inventory of a product which has been changed in formula, proof, label, or container may be exchanged for equal quantities of the new version of that product.
	g. 	Discontinued products. When a producer or importer discontinues the production or importation of a product, a trade buyer’s inventory of that product may be returned for cash or credit against outstanding indebtedness.
	h. 	Seasonal dealers. Industry members may accept the return of products from retailers holding an eight-month seasonal license or permit upon cancellation of the license or permit. These returns shall be for cash or for credit against outstanding indebtedness.
	16.91(2) Reasons not considered ordinary and usual. The following are not considered ordinary and usual commercial reasons for exchanges and returns. Exchanges and returns for these reasons are prohibited.
	a. 	Overstocked or slow-moving products.
	b. 	Products for which there is only a limited or seasonal demand.
This rule is intended to implement Iowa Code section 123.186.
[ARC 7028C, IAB 5/31/23, effective 7/5/23]