California's AB 2991 Alcohol Payment Law: What Bars and Retailers Must Do
By Yan Payments
What does California’s AB 2991 require?
Starting January 1, 2026, California retailers that buy beer, wine, or spirits from a licensed wholesaler have to pay for those deliveries by electronic funds transfer. Cash, personal checks, and money orders are no longer an accepted method for those payments, outside a few narrow exceptions covered below.
Who has to comply?
The law covers payments from a retail licensee, meaning bars, restaurants, liquor stores, and any grocery or convenience store with an alcohol license, to a wholesaler licensee for delivery of beer, wine, or distilled spirits. It doesn’t reach every alcohol purchase in the state. A delivery straight from a manufacturer, a winery or brewery selling directly to a retailer without going through a distributor, isn’t covered. If your business only ever buys direct from a small producer and never touches a distributor invoice, this law may not touch your workflow at all. Most bars and restaurants buy at least some product through a wholesaler, though, so it’s worth checking your invoices rather than assuming you’re exempt.
How does the payment actually move?
This isn’t a case of the retailer logging into a bank portal whenever it’s convenient. The wholesaler initiates the transfer, pulling payment directly from the retailer’s bank account, and the retailer has 30 days from the delivery date to get that payment through. The wholesaler also chooses which third-party payment processor handles the transfer; unless both sides agree otherwise, that defaults to whichever processor the retailer was already using as of July 1, 2025. Each side pays its own processing fees, and neither party can cover the other’s cost, directly or indirectly.
If you’re a retailer, this means you need a bank account that can accept an EFT pull from your distributor’s chosen processor, set up and verified, before your next delivery. Sorting that out after an invoice is already overdue is a bad spot to be in.
Can a retailer pay by credit card instead?
Only if the wholesaler agrees to it, and even then the retailer covers the card processing cost itself. A credit card charge isn’t treated as an electronic funds transfer under this law, so it doesn’t satisfy the requirement on its own. It’s an option a wholesaler can choose to allow, not a substitute path every retailer can count on.
Are there exceptions to the EFT requirement?
A few situations still allow payment by cash, check, or money order:
- After an electronic payment has bounced for insufficient funds
- For holders of interim or temporary retail licenses
- During processor outages
- For the first 30 days after a new retail license is issued
Outside of those, EFT is the only accepted method for retailer-to-wholesaler alcohol payments in California.
Why is California requiring this?
The bill, authored by Assemblymember Avelino Valencia and signed into law in September 2024 as Chapter 426, moves alcohol payments onto a traceable electronic rail instead of cash or paper. Valencia’s office framed it primarily as a safety measure: delivery drivers who currently carry cash payments between accounts face a real theft risk, and taking cash out of that loop removes the target. Payment-industry advocates who supported the change have also pointed to fewer payment disputes between retailers and wholesalers as a side benefit. None of that is a guarantee for any one business, but it’s the stated reasoning behind the shift.
What should you do before January 1?
A short checklist to work through with your distributor:
- Confirm which processor your wholesaler is using (or will use) to initiate EFT pulls
- Verify your bank account is set up and authorized to accept that processor’s pulls
- Ask what happens, step by step, if a scheduled EFT fails for insufficient funds
- Check whether your point-of-sale or accounting software needs anything adjusted to reconcile EFT payments against delivery invoices
- If you want to pay by credit card instead, get your wholesaler’s agreement in writing, and plan for the processing cost to land on you
If your business runs on tight cash flow around delivery days, the 30-day window gives you some room, but a rejected EFT doesn’t buy you more time, it pushes you into the NSF exception, which comes with its own paperwork and scrutiny. If your current setup makes it hard to keep a clean, predictable cash position for a recurring vendor pull like this, talk to someone about how your payment processing is structured so January isn’t a scramble.
This is general information about a new California requirement, not legal advice. Talk to your attorney or the Department of Alcoholic Beverage Control if you have questions about how AB 2991 applies to your specific license type.
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