The way I understand it, it's not the merchant's job to police the morality, he just makes as much money as possible because that proves the extent to which God loves him. I doubt many members would admit how much ratting out goes on, but anybody backsliding is definitely fair game for constant lecturing from any of the other "devout". Checking up on (male) members is very well handled by the stake presidents (or his designee, can't remember all the fine points just now), who keep a detailed file on every single stake member and can call them in for a regular review and "correction" or "attitude adjustment". Participation is not optional. Enforcement tools include the ability to prevent marriages, job advancement, or participation in the community or family you belong to. Better not get me started on what I think about this, umm, "church", I have learned ten times what my Mormon relatives have been allowed to know and that is probably the only reason they have put up with this control all their lives
