Marketing Practices FAQ

Pricing / Promotions / Coupons

  1. Does TABC automatically investigate large retailers who sell beer below cost?

    There is a concept called the "loss leader" among the industry, where a product is sold at a loss to lead customers into the establishment. This business practice, in itself, is not illegal and we will investigate these situations on a case-by-case basis.

  2. Are "2 For 1" prices on alcohol legal? For example: premium 24 ounce cans, 2 for $x or $x each.

    2 for 1's at on-premise retailers are prohibited. See Rule 45.103 (c)(1). However there is no similar rule for off-premises establishments such as convenience stores or grocery stores. 2 for 1 at an off-premise retailer may or may not be legal, depending on how the pricing is structured. Rule 45.101 (a) says that no retailer my offer an incentive or inducement with the purchase of an alcoholic beverage; therefore, advertising a free can of beer (24 oz.) with the purchase of one (24 oz.) can would likely be prohibited.
    In contrast, it's been the agency's historical position to not regulate pricing structures of a retailer provided no excessive discount exists. Hence, if a 24 ounce can of beer ordinarily cost $2.00 and the retailer wants to discount the second can by 50% and assess a charge of $3.00 for two cans of beer, nothing would likely prohibit such provided it does not involve a coupon offer.

  3. Is it legal for a bar to require men pay a cover charge, but not women?

    There is nothing in the law that prohibits establishments from conducting this practice. However, any door charge or "buy-in" that results in reduced drink prices is a violation of Rule 45.103 On-Premises Promotions.

  4. Can a bar have a $2 vodka well drink from opening until 2:00am?

    TABC Rule 45.103 requires that "happy hour" prices end at 11:00 pm. Nothing would preclude a retailer from offering a drink special from opening to closing time; however, if such practice induces a consumer to drink to excess or causes the retailer to not be able to monitor or control consumption by consumers, the retailer will be liable for engaging in a practice to induce a consumer to drink to excess. 16 TAC 45.103 (c)(11).

  5. Can beer distributors or manufacturers purchase beer for consumers at an on premises licensed location?

    Yes, 45.113(b)(3) allows for beer to be purchased for consumers provided the beer is consumed on the licensed premise, in the presence of the purchaser, and the purchases are not pre-arranged, pre-announced, or excessive. This is referred to as "bar spending."
    "In the presence of the purchaser" means that the purchaser and consumer are in company together as that language is applied in normal usage. In the case of a corporation, this refers to the agents, servants or employees of the corporation.
    Neither the event nor the purchase may be pre-arranged or pre-announced to consumers or to the retailer.
    "Excessive" is defined as: exceeding a normal, usual, reasonable, or proper limit; or describes a quantity, an amount, or a degree that is more than what is justifiable, tolerable, or desirable. See Alcoholic Beverage Code §1.04(6).

Coupons

  1. Can a retailer give a "rain check" for beer on sale if the retailer runs out?

    Yes, a retailer may issue a rain check to an adult consumer of legal drinking age if the beverage on sale is out of stock. A rain check is simply a document that entitles its bearers to a one time purchase at an advertised price, as guaranteed by the retailer, once the item is back in stock. In contrast, a coupon is prohibited by Rule 45.101(c) because it limits the offer to only bearers of the coupon rather than all persons.

    For this reason, we conclude that the offering of rain checks to consumers who, although present at the store on the authorized sale day, were unable to purchase a product at an advertised price, does not constitute an unlawful "inducement," "premium stamp" or "coupon" under rule 45.101.

  2. Can on-premise retailers advertise and distribute by flyer a 50% discount of choice of alcoholic beverage with the purchase of a meal?

    16 TAC 45.101(b) prohibits coupons or rebates for the purchase or discount of an alcoholic beverage. Further, 108.02 of the Alcoholic Beverage Code prohibits the advertisement of alcohol by flyer distributed on a public street. However, 16 TAC 45.101 (d) allows an on-premise retailer to offer a discount or complimentary alcoholic beverage as part of a meal package. However, the retailer may not require the consumer to present a coupon to receive the offer. Further, nothing prohibits the retailer from advertising such offer in a regularly published periodical such as a magazine, newspaper, or mail-out.

  3. Can a bar or restaurant mail drink coupons to customers? For example, "Bring this postcard in for two complimentary drinks"?

    No, the holder of a manufacturing, wholesale, or retail level license or permit may not give any rebate or coupon redeemable by the public for the purchase of or for a discount on the purchase of any alcoholic beverage. A retailer may give one complimentary beverage to an individual consumer during the course of one business day but may not do so by redeemable drink ticket or coupon. Reference 16 TAC Section 45.101(b) & 45.103(c)(3)