City officials in Shakopee are seeing more businesses fail alcohol or tobacco compliance checks than ever before and weighing whether increasing fines will improve the situation.

The city currently has 48 businesses with a liquor license and 29 businesses with a tobacco license. Some establishments have both.

In 2022, Shakopee saw 19 businesses fail a compliance check — 10 tobacco failures and nine alcohol failures — compared with a total of 10 in 2021.

"It's concerning, the number of failures that we're seeing," said Shakopee Police Chief Jeff Tate. "We've never come close to that [number of violations], ever."

During a compliance check, an underage person who is working with police tries to buy alcohol or tobacco at a licensed establishment. When asked, they must show an ID showing they are underage and can't lie to the cashier if asked their age. A police officer is typically waiting nearby.

Shakopee does at least one check per licensed business each year, Tate said, and tries to do two if possible.

"I don't believe it's necessarily an isolated issue in Shakopee," Tate said, adding that he's heard other chiefs and sheriffs say they've seen increases, too.

Shakopee City Administrator Bill Reynolds also said he's "very concerned" about the number of noncompliant businesses. He wants to see fines increase and said the issue will be discussed at a December City Council meeting. The rest of the city's ordinance is "solid," he said.

"We need to ensure that the fines make a business take the issue seriously," Reynolds said in an email.

The city's ordinance issues a $1,000 fine and one-day license suspension for the first violation of selling alcohol to minors, though penalties may be lessened if no other violations occur the following year. Penalties increase for additional violations; a fourth may include license revocation.

For selling tobacco to minors, the ordinance stipulates a $500 fine and one-day suspension; the suspension won't be enforced if the business has no further violations for a year. Penalties increase for subsequent violations; a third could include license revocation.

Both Reynolds and Tate said they didn't have a sense of why businesses were failing.

"It'd be nice if there was one single reason you could pinpoint," Tate said.

At an October City Council meeting, Thomas Cohen, who has co-owned Merwin Liquors in Shakopee for about a year, spoke at the public hearing held because of his violations. Merwin failed a liquor compliance check in August 2021 and both a liquor and a tobacco compliance check in December 2021.

Cohen said he didn't think Shakopee's compliance methods were "demonstrating the type of success for which I know we all strive" and offered to help the city make improvements. He asked the city to "take a pause" from imposing penalties to figure out if its compliance protocol was effective.

Cohen said COVID-19 had been stressful for small businesses.

"It seemed like we were stuck in an endless cycle of hiring, training and then losing employees to other opportunities, sometimes within a matter of days," Cohen said, adding that the workers who showed up had to complete all the tasks other workers didn't finish.

The job "is not as easy as you would think," he said.

Cohen said every employee is required to complete the Minnesota Licensed Beverage Association's training program before they begin as a cashier. Every transaction requires the employee to enter the customer's birthday, he said, and the store offers $100 to employees that pass a compliance check.

Before COVID-19, Merwin also held mandatory, in-person training events, he said.

Tate said blaming COVID-19 "isn't a viable excuse; it's a cop-out."

He said officers give cashiers "every benefit of the doubt" and that spotting an underage ID has never been easier.

The city is also hosting an upcoming training on checking IDs. Increasing fines is the least the city can do, he said.

"We haven't put our finger on [why it's happening] yet, but hopefully it's a wake-up call to businesses that they do have to train their employees," Tate said.