Extension of Credit and Prepaid Accounts

Table of Contents

An industry member can extend credit to a retailer on the sale of wine for not more than 30 days from the date of the sale.

An industry member cannot extend credit on the sale of alcoholic liquor or beer to a retailer.

An industry member may establish prepaid accounts where retailers deposit a sum of money to pay for future purchases of alcoholic beverage products. These prepaid accounts are subject to the following requirements:

  • An industry member cannot hold the money deposited in a prepaid account for future payment of a debt.
  • An industry member must transfer the amount of the invoice from the retailer’s prepaid account each time that the industry member makes a sale and a delivery to the retailer establishment.
  • An industry member is not required to establish separate escrow accounts for prepaid accounts.
  • An industry member is responsible for accurately and honestly accounting for the funds held in a prepaid account.
  • A retailer can withdraw the money placed in a prepaid account at any time.
  • An industry member cannot use prepaid accounts to require a retailer to purchase any specific amount of alcoholic liquor, wine, or beer.

Iowa Administrative Code rule 701β€”1003.19