Gun sales in the United States reached record levels in 2020. Industry data and gun background checks revealed 23 million guns were bought last year. This was a 65% increase from 2019 when 13.9 million guns were purchased by Americans. Securing a proper Gun Shop Merchant Account is a must if you want to compete in this space. Accept credit cards, debit cards, and eCheck payments today with SecureGlobalPay.
With more civilians purchasing handguns, rifles, shotguns and machine guns for sport, hunting or to defend themselves, the firearms and ammunition industry ended up generating over $63.49 billion in 2020.
According to a small arms survey, there is an estimation of 393 million guns in America. This is the highest per capita in the world. And with a 2020 U.S. Census population estimating that 331 million people live in America, this means the United States has more guns than people.
But even with these record numbers, the demand for firearms continues to increase every year, and owning a gun store can be a profitable business.
The gun industry is not only a profitable industry, but it is also a highly unregulated one. Where the numbers of gun dealers and gun stores or shops remain largely unchecked.
Owning a lucrative gun store business means being able to accept credit cards and process all card transactions. This is a reality because most gun buyers prefer to pay with plastic cards over cash.
This is particularly important because purchasing guns with ammunition is not cheap. People prefer to pay for high ticket items with the convenience of their cards and not a wad of cash.
There is also the current state of the world that has left many Americans with little choice but to buy things online more frequently, including firearms.
What is a Gun Store Merchant Account
This high-risk merchant account helps gun shops accept payments from point of sale systems, credit card terminals, and the Internet.
Banks and other traditional financial institutions do not provide this payment processing service. So firearm dealers and retailers are forced to look beyond them for payment solutions.
High-risk account providers are willing to work around problems that make financial institutions nervous by providing payment processing solutions gun businesses desperately need.
Why Gun Selling is Risky Business
Businesses in the firearms and ammunition industry always have their applications rejected by traditional financial institutions.
These organizations consider anyone in the gun business a high-risk merchant and are uncomfortable doing business with them.
This has nothing to do with illegal or criminal activity. Selling guns is a legal business in America and contributed $52 billion to the economy and generated $6.8 billion in state and federal taxes.
So if the firearms industry is so profitable why are financial institutions avoiding it?
The reason lies in the plenty of baggage that comes along with the industry.
Legal and regulatory issues, too many chargebacks, a complicated selling process, and fraud are just a few problems that bog down the firearms sector.
Financial institutions believe there are too many loopholes in the gun industry. Their belief is that even the simplest terms of the agreement can be violated because it is a largely unregulated industry.
For example, the right to bear arms is clearly stated in the United States constitution. However, the gun control laws are not the same in every state. These gun laws are further complicated because they are also in conflict with laws at the federal level.
Another example is the high risk that comes with selling guns online. Despite the background checks, age requirements, and other safety precautions, these weapons still end up in the wrong hands causing chaos, grief, and bloodshed.
Gun ownership is a polarizing topic in America and for the sake of their reputation, many financial establishments choose not to work with enterprises that sell firearms.
Why You Need a Firearms Merchant Account
If you do not own a gun shop merchant account, your business will struggle to provide first-rate services to customers.
The gun selling business is highly competitive. Without a merchant account to receive payments, you hand over the advantage to other gun businesses and allow them to take away your customers.
You also leave your business vulnerable to many risks linked to the industry.
Here are more benefits of getting a gun shop merchant account:
- Access to a worldwide market
- Safety and security
- Fraud protection
- Internet payment gateway
- Processing of plastic money
- SSL encrypted servers
- Multiple currency options
- Infrastructure support
Getting a Federal Firearms License
Finding a merchant account provider for a gun dealership is important, but not before getting a firearms license. Anyone planning to sell firearms, gun accessories or ammunition needs to get a Federal Firearms License (FFL).
This is a federally issued license that applies to individuals and corporations legally allowing them to trade or sell firearms.
As part of the process, the Alcohol, Tobacco, and Firearms federal agency (ATF) runs a background check on you. They investigate every facet of your life to confirm that you can be totally trusted with the business of selling firearms.
The license costs 1000’s of dollars and takes over 2 months to be sorted out.
As a firearms dealer understand that the U.S. government expects accurate and authentic records of all your gun sales
You are also expected to conduct personal background checks on prospects looking to purchase firearms.
Some gun shops need a zonal permit to operate their business. You need to confirm if one is needed to run a gun store in the area.
Documents Needed to Open a Gun Shop Merchant Account
Setting up a gun shop does not only require a legal license and background check. There are certain legally binding documents required too.
These documents help your application when applying for a high-risk gun merchant account.
- Gun shop business plan
- Certificate of incorporation
- Biometric documentation and fingerprint cards from local police department
- Insurance policy documents
- Certificate of corporation
- Tax compliance documents
- Zoning compliance permit
Choosing a Gun Merchant Account Provider
People have a right to be cautious when making card transactions. They know their personal details can be stolen by fraudsters.
So, when customers want to do business with you and see the extra precautions that have been taken, they are comfortable and return for repeat business.
When choosing a high-risk provider do not only consider having a way to accept credit cards and process your payments. There are other things that you need to consider to help you in making the right choice.
Here are 7 things you should do before choosing a gun merchant account provider.
- Locate online reviews of the firearms merchant account provider.
- Application process must be clear-cut and straightforward.
- Ask for recommendations from those who have used firearm merchant services.
- Not all providers charge processing, set up and installation fees.
- Find out if there are hidden charges, never be taken unawares.
- Inquire about restrictions on sales volume.
- Review terms and conditions of agreement. Seek clarity on what you do not understand.
There are many shady companies claiming that they offer gun merchant account services. Do your research and never allow low prices to be the only basis for your decision.
Keep in mind that as a high-risk business, your fees will be higher than a low-risk business.
High-risk merchant account providers need some form of compensation for the risks being taken on your behalf. This is particularly key for startup gun shops with no reputation and little sales volume.
Always go for a payment processing solutions company that has plenty of experience partnering with gun shop merchants.
Be satisfied with the security and financial measures before making your final decision.
Getting the right gun shop merchant account provider is critical to your business survival. This confidence allows you to focus on creating great experiences for your customers.