Most lfs, even the best run, are occasionally going to end up with dead fish in their tanks. Fish do die, and the fish in the lfs have just been through a very stressful journey. Bad signs are:
when the fish are clearly long dead, half decayed and surrounded by a cloud of fungus, and have still not been fished out
when you can see that there is infection in the tank and the not-for-sale sign has not gone up
when you point it out to an assistant and they refuse to fish the dead fish out "because it is natural for fish to eat their dead companions"
when dying fish are being harrassed by their companions and the assistant refuses to do anything about it
Needless to say, I have come across all these. But I have also come across the opposite: a shop where you hardly ever see any dead bodies; shop assistants who thank you for pointing out the dead and fish them out immediately, shops with a proper quarantine system. I now try to point out problems as gently as possible, to make it easy for assistants to change their ways without too much loss of face. Two years of negotiating life for a handicapped daughter has turned me into a much more wily person than I used to be. These days I'm interested in getting results, not in venting my feelings.