A dealer may face penalties for which of the following actions?

A dealer may face penalties for failing to display their license because it is a legal requirement in Colorado for licensed dealers to prominently display their sales license. This requirement ensures transparency and instills trust in customers, as they can verify that the dealer is authorized to conduct business. Not displaying the license can lead to penalties because it violates regulations set forth by the state’s licensing authority.

The other options do not represent direct violations of licensing regulations. While improper sales techniques may reflect poorly on the dealer and could lead to reputational damage, they don't necessarily result in a penalty under licensing laws unless they violate specific statutes. Similarly, having insufficient inventory or a poor customer rating are not actionable violations under the licensing requirements, though they may impact the dealer's business performance and customer satisfaction.