Americans love guns. As the most heavily armed nation in the world, America leads the world in private civilian gun ownership, with over 120 guns per 100 civilians. With a third of United States households owning at least one gun, the firearms industry in America is easily the most thriving private arms market globally. Due to the controversial nature of the firearms industry, this sector is regularly considered “high-risk”, which means financial institutions regularly impose account holds or high fees, if they even decide to offer credit card processing at all. Many merchant account providers such as Square, PayPal, and others refuse to process online and mobile firearms transactions; this leaves many firearms dealers and gun shows without a reliable credit card processor.

Pinpoint Payments believes that every business, regardless of the industry they serve, deserves a reliable credit card processing solution. We deal with “high-risk” businesses because we believe they truly aren’t “high-risk” at all. Responsible gun ownership is at the heart of American ideals and legal sale of these firearms prevents the creation of illegal black markets. In this article, we’ll go over some American gun statistics, what they mean for firearms dealers, and how Pinpoint Payments facilitates merchant account processing for these businesses.

American Gun Ownership Statistics

Gun ownership in America, per capita, is the highest in the world. There isn’t even a close second. Per 100 civilians, Americans own 120 guns; there are more guns than people in America, with an estimated 393,347,000 private firearms in circulation with a population of 326,474,000 Americans. Here are a few quick facts about the distribution of firearms nationally and internationally:

  • The global armed forces controls 133 million (13%) of small arms
  • U.S. civilians account for about 46% of worldwide civilian-held firearms (393 million small arms)
  • Globally, law enforcement holds about 2% (23 million) small arms
  • According to smallarmssurvey.org: “U.S civilians own 393 million guns. That is 3 times as many guns as the armed forces of the Russian Federation (30.3 million), China (27.5 million), North Korea (8.4 million), Ukraine (6.6 million), United States (4.5 million), India (3.9 million), Vietnam (3.8 million), Iran (3.3 million), South Korea (2.7 million), Pakistan (2.3 million), and all the other countries (39.7 million) combined. American civilians own more guns “than those held by civilians in the other top 25 countries combined.”revolver and shell casings
  • American civilian gun ownership is staggering: American civilians own 100-fold as many firearms as their military and 400-fold more than their law enforcement.
  • In May 2018 alone, there were over 2 million gun sales.
  • In April and May 2018, Americans bought 4.7 million small arms. If you add up every gun possessed by every law enforcement agency in America, that is less than twice as many guns bought in April and May of 2018.

There seems to be an endless number of unbelievable facts about gun ownership in America. We could fill the page with statistics like these, but we think you get the picture… the private gun business is overwhelmingly large in America and it shows no signs of slowing down. These numbers guarantee one thing: the firearms sector in America is reliably profitable. So why do many financial institutions still consider it high risk?

Why are Firearms Dealers Considered High Risk Businesses?

One reason why firearms dealers are considered high-risk is due to the controversial aspect of the industry, which we mentioned previously. There are certain elements to this sector that are under constant change due to firearm laws at the federal and state level. Legislation towards firearms is constantly changing because of gun violence in America, which dissuades many banks and merchant processors from accepting firearms dealers as clients and business partners. The laws concerning this industry are unstable, so many credit card processors label the entire industry as unstable.

Many banks also do not wish to be viewed as “gun-friendly” as they perceive it as a controversial political and social issue; however, we believe that the biggest reason for the hesitation is the risk of chargebacks in this industry.

What are Credit Card Chargebacks?

A chargeback is a credit card refund that goes through the bank itself and not the merchant who was responsible for the sale. A consumer can request a chargeback of a particular transaction by contacting their bank. If a consumer requests a chargeback for no good reason, it is the digital equivalent of shoplifting and theft; however, chargebacks are a necessary part of the financial system due to unscrupulous merchants, identity thieves, and financial errors. Government officials mandated chargebacks when credit cards were first gaining popularity. Chargebacks protect consumers from fraud, unauthorized purchases, and errors on behalf of the business they may have purchased something from.

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There are certain illegitimate uses of chargebacks that occur on a daily basis. Some of these can include:

  • Buyer’s remorse. If someone buys a product or service then regrets it and schedules a chargeback, this is theft. Always contact the merchant about the possibility of a refund.
  • A family member/child used your card. Settle this dispute with the family member or merchant and not the bank.
  • Forgetting about the purchase. You’d be surprised how often this happens. Always be sure to double-check before requesting a chargeback.
  • Wanting a quick refund. Always go through the merchant first. Unnecessary credit card chargebacks create a ripple of economic unsteadiness.

Chargebacks in the Firearms Business

There are many reasons why there are a high amount of chargebacks in the firearms industry. One of the speculated reasons is centered around the legality of firearms in the United States. In America, it is illegal to make a private purchase of a firearm if you have a felony conviction in your past; this can spur a felon to use illegally obtained credit card information to make the purchase. Usually, the purchase will go through and the gun will be shipped prior to the victim’s knowledge of the fraud. The gun is then shipped, the chargeback is initiated, and both the gun dealer and credit card processor lose money.

Another example stems from the fact that guns are expensive. A consumer, at the end of the month, may realize that they don’t have enough money to make rent because they purchased a $500 firearm. An unscrupulous consumer may intentionally file a chargeback to try and cheat the dealer, or file a chargeback instead of returning the firearm to the merchant.

Not all chargebacks come from a place of ill-intent, however.

Preventing Firearms Chargebacks

There are a few things that firearms dealers can do to help reduce the amount of chargebacks their business receives. Even though a firearm dealer is more prone to chargebacks than other businesses, the number of chargebacks can be substantially reduced if you implement smart business practices.

  • Many chargebacks are initiated because the customer was unsure of where the charge came from. This can sometimes be caused by an unclear or ambiguous billing name/address on the credit card statement. Make sure to effectively label your businesses’ charging name.
  • Have a generous and easy-to-understand refund policy. Perhaps even suggest to contact the business instead of the bank first in your refund policy text. Refunds are going to happen for one reason or another; gun owners tend to be very particular about the look, feel, and weight of a gun, so refunds happen regularly. Even though refunds will hurt the profit of your business, chargebacks are even more damaging in nature, as too many chargebacks can result in the termination of your merchant account.
  • Provide easy-to-find contact information on your website. Many chargebacks are initiated because of hard-to-find contact information or poor customer service.

Pinpoint Payments offers a robust, automated chargeback prevention solution with hundreds of integrations and automated processes. We help your business manage, fight, and prevent unneeded chargebacks. Our chargeback management system provides complete integration into most banks and CRM services, prevents almost 50% of chargebacks before they happen with no effort on your behalf, and can work with both US-based and international processors.

Merchant Processing for Firearms Business

Avoid losses, fines, and headaches with Pinpoint Payments today!two rifles

Pinpoint Payments specializes in chargeback management and prevention to help avoid many of these unnecessary chargebacks from hurting your businesses’ bottom-line. We deal with many businesses that have been deemed as “high-risk”, including firearms, CBD, vape, and startup companies. We incorporate Verifi CDRN, which enables real-time communication between the merchant and issuer to resolve fraud and non-fraud disputes before they ever become a chargeback. With CDRN, you will receive timely notifications directly from the issuer to resolve the issue promptly; avoid costly chargebacks that can hurt your business.

Obtaining a merchant account is often one of the last hurdles when starting a firearms business. Pinpoint Payments simplifies this process by providing point-of-sale terminals for your brick and mortar, online payment gateways, virtual terminals, card-not-present transactions, mobile payment options for tradeshows, and unparalleled fraud and chargeback prevention. If you are interested in opening a credit card processing account for your firearms business, contact us today to get started.