‘Break it, replace it’ policy costly for LCB
By Kari Andren
Published: Sunday, July 15, 2012, 12:01 a.m.
Updated: Wednesday, January 9, 2013
Pennsylvania wine and spirits stores are willing to forgive butterfingers, sidewalk spills and serving mishaps, according to state Liquor Control Board officials.
Customers who break unopened bottles of wine or liquor in the parking lot, at home or anywhere off site can take the broken glass back to the state store for a free replacement, according to the stores' little-known, unwritten policy.
The LCB leaves it to “the judgment of the store employees to distinguish between what they believe to be a legitimate reason for returning the bottle versus something where somebody's trying to be deceitful or fraudulent,” said Jason Worley, an LCB attorney.
Liquor Control Board Chairman Joseph “Skip” Brion said the guidelines are simple. If a customer breaks a bottle and the cap or top is not open, he can return it to the store and receive a replacement bottle of the same product.
“People don't break bottles that often that are not opened,” Brion said. “In our beverage industry, I don't think it happens that often. But when it does, we're more than happy to accommodate.”
The LCB does not track how much the policy costs the system each year.
Officials can only say that broken bottles returned by customers and bottles broken in a state store by customers or employees while shopping, unloading or stocking shelves cost the LCB nearly $1.1 million over two years.
But the practice of replacing broken bottles has drawn the ire of state store critics.
“The numbers are just another example of why the LCB's attempt to mimic free markets doesn't work,” said Jay Ostrich, director of communications for the conservative Harrisburg-based Commonwealth Foundation. “No ‘world-class' retailer would be able to survive in a non-monopoly system with a policy as asinine” as this one.
Brion said the policy is used by food and beverage retailers in Pennsylvania and surrounding states.
But workers in some private, out-of-state wine and spirits stores were surprised by the LCB's practices. Barbara Kleckner, manager of Cedar Green Wine & Cheese in Cleveland, said the store might replace a broken bottle for a “really good customer,” but it doesn't have a universal repla cement policy.
“When we pack (a bag) for them, we say, ‘Hold the bottom.' They're on their own then,” Kleckner said. “If it's somebody who walked out with a $5 bottle. .. and didn't heed our advice, we'd say, ‘I'm very sorry, but you didn't listen.'”
At the Wine Rack wine store in Morgantown, W.Va., employee Tracy Thorne said bottles are sometimes replaced.
“If it's a regular, we know them, they're not drunk ... typically we'll replace it for them,” Thorne said.
But in Pennsylvania's case, it's not a store owner who eats the cost of product replacement, Ostrich said.
“When the PLCB fails, they do not actually pay the price for their failure. Taxpayers and consumers pay the price,” Ostrich said.
Broken bottles are part of the $5.5 million lost by state wine and spirits stores from 2009-11 through shoplifting, employee theft, delivery shortages, shipping errors and electronic or human errors at the store level, according to records obtained under the state's Right to Know Law.
The total losses account for .18 percent of the roughly $3.1 billion in sales at the 620 state stores over the two-year period. The LCB spends about $1.1 billion annually to purchase wines and spirits sold in stores.
That percentage loss is less than half the median loss figure for companies with $1 billion to $3 billion in annual sales, according to a 2009 study by the Alexandria, Va.-based Food Marketing Institute. The study found that companies in that category reported a .44 percent loss for retail sales in 2008.
Kari Andren is a staff writer for Trib Total Media. She can be reached at 724-850-2856 or email@example.com.
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