At our chapter, we don't have a hard and fast rule as to when letters can be worn out. Personally, though, I don't wear them out to bars or parties, whether they be huge ones or small house parties.
About the only time that I will be drinking in letters is inside the chapter house, since everybody knows me
, or the guests know that I am a Phi Sig. However, I don't see a problem with wearing my lavalier out to parties.