Is it time to boycott FFL scammers?

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Remember folks that for all practical purposes you have to have a brick & mortar store to hold an FFL. Then you have to meet all state & federal regulations, pay insurance, utilities, staff salaries, carry inventory, etc. If these dealers can't make a profit - they close their doors. So before you blame these dealers for gouging, look at the state you live in and see what kind of hoops dealers have to go through to stay in business. Trust me, no gun shop is in business to subsidize cheap internet gun shops.

I figure it this way, if I don't like the fee they charge I'll find another dealer...
 
"It was just my advice to the THR members to NOT pay over $20"

Thanks for your concern. Will you be upset if I pay what I like where I like? I really don't want to drive 2 counties away to save a few dollars at some part-time FFL who isn't open 7 days a week. My time is worth something and gas costs money too.

John
 
With all the guns I have bought over the years, I have never had the Insta-check call take more than 2 minutes. Unless the system is down, which happened only once that I can remember - then they tell you to call back.

There is a consiparcy I believe. Part of it is caused by the ATF. Part of it is because if most of the larger dealers just happen to get a good idea to make more $.

I have been told to look for pawn shops. They have not yet started doing this I have been told.
 
There are ffl dealers in my area who charge sales tax, plus a transfer fee. The pawn shop i use charges $20 and no tax as long as i have a bill of sale made out to me. The rest charge $15-$25 and charge sales tax regardless. I offered to pay sales tax on the transfer fee, but refused to let them collect sales tax on something they are clearly (as defined by the bill of sale) not selling. By the way both ffls refused to produce documentation that they could collect tax on an item they didnt sell, and seemed quite offended at the implication i made. If this was a fair and legal practice dont you think UPS and FEDEX would be charging you sales tax everytime they showed up to deliver something you ordered online?
 
Trust me, no gun shop is in business to subsidize cheap internet gun shops.

Yes, I will agree with you on this. But, either way, that particular shop didn't get the sale, right? Either they had what the person was looking for but at a higher price than the person was willing to pay, or they couldn't get what the person wanted, so the person had to shop elsewhere. But, they still have an opportunity of getting the thirty or whatever bucks doing the transfer.

For all of those in this thread who work/have worked at a gunshop, how much profit is made on an average pistol sale?
 
"I have worked for 3 FFL's, all in the same city, and all of them charged $25.00 for a transfer.

is this NOT the going rate?"

There is no such thing as "the going rate." They can charge what they want. One large shop here has a very high rate because they sell a trainload of guns day after day and can't be bothered having their large sales force tied up doing paperwork for pocket change.

Now, before you start arguing, let me ask - If it was your store, would you rather have your salesguy doing a $25 transfer or showing me a $6,000 Parker shotgun? Doing a $35 transfer or showing me a $2600 used Guerini Summit Limited 12 ga.? Doing a $50 transfer or selling 2 $500 scopes, plus rings, bases and ammo?

It's just plain business sense.

John
 
When I moved to Texas I had to find a new dealer to do a transfer. I called around and noticed many of the shops/dealers I had found charged Tax+ % for the transfer of a firearm! I was shocked! I then found an FFL dealer (and happens to deal out of his home) and he charged a flat $20 out the door no taxes. So I asked him why so many others are charging taxes. Here is what he told me...

Taxing transfers is kind of a new practice with some FFL dealers and he explained it like this; Legally they (even him) cannot collect taxes on a Transfer because there are no records for them to pay it as they clearly never sold it in the first place! To sell something you have to own it and the dealer/FFL never owned it so why again are they charging taxes? We had a good laugh.

So you do the math.. .maybe FFL Dealers are being nice and collecting free taxes and giving the government free money right? Haha, yeah I am going to stick my neck out and say no they are probably not reporting it on their 1099. And charging 20% of the bill of sale sure bumps up the amount owed to them + the amount of taxes they *must* collect.

But who am I to judge or ask questions? I don't wanna rock the boat and be considered part of a "conspiracy" as Justin would put it.

Be smart, be safe. Don't get ripped off by these cronies.

:)
 
But when every dealer in say ****,GA are charging $75 or 20% for an FFL or everyone is charging tax ... it raises eyebrows (at least mine and a few others).

I can't speak to the market in a town who's name you choose to omit. But if they're all charging sales tax in violation of state law, perhaps you should get on the phone to the authorities instead of bellyaching about it on an internet forum.

Looking at the area around my town, transfers go from $15 on the low end, to $50 on the high end, with lots of room in between. Most of the dealers in town seem to be charging $20-$35.

Do I have access to their General Ledger/Operating Statements stating that they are in fact giving that unearned tax money to the State... Nope.

Then all you have is a feeling, which is no logical basis for making accusations. It might be a starting point from where an investigation would start, but that's about it.

My father or mother buying a firearm wouldnt know what is right or wrong with the fees some are charging and business practices they are using are illegal or immoral. Neither would someone new to our shooting sports (I was confused for a while). All I am doing is just asking that people wise up to the business practices of FFL dealers that I have noticed quite increasingly lately.

If your father or mother don't know the ins and outs of what's going on, how likely is it that they'll be purchasing their first firearm off of Gunbroker or calling a distributor up to give them a credit card number and the address of a gun dealer?

If they're buying a firearm off the shelf at the local gun shop, it's perfectly reasonable that they would expect to pay sales tax as well as a fee for the NICS check. Of course, it's good business practice to let the customer know that they'll have to pay a fee for NICS check up front.

So 35 bucks an hour to be on hold is less than they're making sweeping the shop floor or trying to make a sale?

JohnBT nailed this one upthread.

Now $25-$35 for the transfer, which you admit is what the dealers you know charge, is "practically for free"?

The last gun I had transferred cost around $700. Even if I had paid $35 for a transfer it only amounts to about 5% of the cost of a gun that I would have paid significantly more for in a retail store.

If I'm already saving a bundle of cash by ordering directly from the distributor/manufacturer, I see no reason to begrudge the fact that my FFL makes a profit off of doing the transfer. After all, the guy's got to make a living somehow.

If that's the case, then why don't they charge the $75 like (apparently) the market will bear?

Because the local market here won't bear that when there are other options available. Things may differ in places like California, where the number of FFL's is probably somewhat more limited and there are additional legal hoops to jump through.

If they didn't want to put up with the hassle of transfers, well, that's why the word "no" was invented.

I don't disagree with you. But that's pretty much what one FFL told me when I asked him about his high transfer prices. Of course, now and again, he might get someone who's willing to pay that price.

FWIW, I don't do business with him.

I'm not trying to berate you personally, Justin; I just think that charging "whatever the market will bear" isn't, in the long run, a sound business choice, even if the business is AT&T, Microsoft, or Joe's Gun Emporium.

I would submit that if the fee being charged is one that would eventually lead to that business losing customers in the long run, then that person is probably charging above what the market will bear.
 
Let me just through my $.02 in to the ring:

In NY, dealer's are required to pay state sales tax on transfers, because the law defines gun transfers as "sales".... most places just build that into the price of the transfer fee, as they charge sales tax on the transfer, as they are required to do. However, there are some who have been audited (myself included) who were told we must charge % of what the gun is worth.... I asked how do I know what it is worth, and I was told to have it evaluated.
Lucky for me I can evaluate just as well as the next guy, and since I am not required to keep pictures, I can state the value is whatever I think it is.... and the NYS tax department has agreed with me.

So when I say it is worth $1, and then build the 8.375% into the fee.... everyone wins.

Each state has its own tax laws and regulations.... claiming that $20 is the most anyone should pay is just plain ignorant of the business.

Time is money, equipment has a depreciation cost and some states take more than 3 sheets of paper (we have 3 for a long gun, and 8 for a hangun 3 you see, and 5 more to get filed with various agencies)...

Before stating facts, how about checking regulations?

Oh, and I charge $25 per transfer, and I give a bulk discount....
 
This is like tap-dancing on the chests of FFL Dealers everywhere! Is there something going on that I am not aware of? This thread is to educate, discuss, share stories, and identify dealers that are price gouging, cheating, and scamming. HOTPIG charges $10 and quite frankly after reading his posts I would do business with him anyday. A few others on THR charge the same or less so I am really surprised so many folks on this forum are "hurt" over this topic.

Before stating facts, how about checking regulations

Before getting all angry and mean ieszu, it is important to first read the entire thread. I understand that there are 5 States that have some serious hardware and Anti's regulatory hoops;
Posted by Javlin;
"I understand in some states that taxes, fees, and other charges apply so it is important to know your local laws"

:)
 
Javelin -

You are not "tap-dancing on the chests of FFL Dealers"... just being ignorant.

Instead of bashing me for being angry... how about reading what I wrote? I stated that I work within the laws to give my customers as low a rate as I can.... one of the Dealers out here charges $80 +% ... and if he knows you he only charges $50 +%....

I think my $25 is pretty reasonable comparatively.... don't you? So I am not price fixing, gouging or running a scam... which accused dealers of doing across the country... but you had a tiny disclaimer to ward off attacks...

Perhaps it should have stated "If you are in one of the 5 most restrictive gun states in the country, do not read."

Common sense, huh?
 
The tax thing depends on who paid for the firearm.

If you send your check or credit card to the out-of-state place that sold the gun, and have it shipped to your FFL dealer, there is, or should be, no sales tax charged.

If the seller is in your state, or has a branch in your state, you have to pay them the sales tax.

If you have your dealer place the order for you, and he pays for it with his own credit card or whatever, then he is required to charge you sales tax when you pay him for the gun.
(Because he is, in effect, buying it and reselling it to you.)

BTW: My dealer charges a flat $5.00 fee for the backround check, and you pay the shipping.

He used to do it free, but the ATF said he had to show a profit at the end of the year, so it went up to $5.00 last year! :banghead:

1224.jpg
rcmodel
 
I think my $25 is pretty reasonable comparatively.... don't you

Sure :)

? So I am not price fixing, gouging or running a scam... which accused dealers of doing across the country... but you had a tiny disclaimer to ward off attacks

Darn that fine print, I know! :D

I am not saying if you charge $20.01 your a scammer. $25 whatever. I am not going to argue a Lincoln or Hamilton on a transfer. That is non-sense and petty. Its just that everywhere my little eyes have been on the net $20 is a pretty easy find (in most places). I am talking about dealers seriously taking advantage of people... and in droves to boot for something that is mandated by law to occur.

I should have probably left out the Transfer portion as one of my three effect statements as it is really up to the dealer on what to charge. I am just saying that the fees have been creeping up to well over $50 and $75 in many places. Just get the word out there are other places to go to do a transfer that is not going to cost you an arm and a leg (or illegal taxes). I am sure your a good man iesu.

:)
 
This is like tap-dancing on the chests of FFL Dealers everywhere! Is there something going on that I am not aware of? This thread is to educate, discuss, share stories, and identify dealers that are price gouging, cheating, and scamming.

Something which you have utterly failed to do.

Again, if you're aware of FFL's who are breaking the law, why aren't you reporting them to law enforcement?
 
Javelin -
Apology accepted.

Just wanted to let you know that some of us are not out to rip people off... we actually care about the customer.... but we will charge what people are willing to pay. As there are other FFL's near me, I must be competitive, or people will go elsewhere.

Be glad you are not in California... where I used to live there was but one FFL in a 50 mile radius... and he was the cheapest at $200 a transfer!
 
Again, if you're aware of FFL's who are breaking the law, why aren't you reporting them to law enforcement?

I KNOW!! I wish I had saved the numbers that I had called a couple weeks back. I can't even find/remember the site that I pulled them up on. That was where the idea of this post came up! Maybe others have noticed some wierd things going on with FFL dealers.

And I think yes we should go ahead and prosecute them... the government is going to do something on behalf of the gun owners of America. I am not going to hold my breath.

The best thing I think I can do is get the word out and if enough people become wise to these practices maybe, just maybe, it will end.

:)
 
I should have probably left out the Transfer portion as one of my three effect statements as it is really up to the dealer on what to charge. I am just saying that the fees have been creeping up to well over $50 and $75 in many places. Just get the word out there are other places to go to do a transfer that is not going to cost you an arm and a leg (or illegal taxes). I am sure your a good man iesu.

So, your entire point boils down to "it's a wise idea to shop around and find a good price on things you want and/or transfer fees that must be paid."
 
So, your entire point boils down to "it's a wise idea to shop around and find a good price on things you want and/or transfer fees that must be paid."

Stop Hi-Jacking the thread Justin. Information is my point... is'nt that what THR is about? The fact that some FFL dealers are price gouging, some seem to be price fixing, some seem to be charging illegal taxes is concerning to me. And maybe the gun community is unaware of this activity.

Am I the only one that has a problem with this? I doubt it.

:)
 
If there are FFL's that are engaging in price gouging, price fixing, or charging illegal taxes would you care to name some of them?


After all, sharing information is what THR's all about.
 
Javlin Wrote:
I KNOW!! I wish I had saved the numbers that I had called a couple weeks back. I can't even find/remember the site that I pulled them up on. That was where the idea of this post came up! Maybe others have noticed some wierd things going on with FFL dealers.

What maybe I go on some 20/20 documentary for THR? Haha.

:)
 
Scam v. "What the Market Will Bear" -- different things!

Scam is charging "sales tax" when it's not due. That's misleading, and deserves a righteous smackdown.

Charging $100 (or whatever the local worst is for you) isn't a scam. It might be annoying, but look at the upside: If all the dealers within 30 miles of you really do get together, form a cabal, and decide henceforth and forever more to charge a uniform, crazily high price, guess what? That leaves the market wide open for anyone willing to charge less, *and* tells you which dealers you might not want to patronize any more.

It's not like there's a bluebook out there which says *precisely* what the market will bear -- every market is an aggregate, a tangle of imprecise bids and flags flying up flagpoles seeking salute.

What would happen if all the local dealers in a small town (let's say there are two of them) decided to charge ONE MILLION DOLLARS per transfer? I'm sure you wouldn't pay the million dollars and feel put out, and I' m sure no one else would either. If your local price for transfers is out of line, in your opinion, it sounds like there's a good market opportunity for someone to charge less. It might not happen, but aren't you glad that no one has in fact figured out the "perfect" price for anything? If they did, new entrants would have an awfully tough time.

timothy
 
The fact that some FFL dealers are price gouging
I assume you're using the term "price gouging" colloquially, as there are rather strict legal definitions of what price gouging actually is. If you are implying that the price is unfair, I regretfully inform you that a free-market economy is not based on fairness. Communism, on the other hand, is. Unfortunately, communist markets don't seem to work out so well. If these prices were so out of line for the market and there was enough money to be made by lowering prices, someone would certainly be taking advantage of that.

some seem to be price fixing
Again, this is a term with strict a legal definition and that definition is not "charging the same price." Unless you have evidence of collusion, there's not really any point throwing this term around. Everyone charging about the same price for something is evidence of economic equilibrium, not price fixing. Again, if these prices were so out of line for the market and there was enough money to be made by lowering prices, someone would certainly be taking advantage of that.

some seem to be charging illegal taxes is concerning to me.
I'm afraid that I'm no tax law expert, but I wouldn't through around the term "illegal taxes" either unless you were familiar with the tax codes and the rules and regulations passed down to dealers by the state. In California, for example, the California Board of Equalization has declared that transactions through an FFL where the seller is not a retailer do not require the collection of sales tax, but transfers from a retailer through require the collection of sales tax. See this post on calguns for details. It wouldn't surprise me that other taxing agencies have given out similar information. Taxes codes are one of the most convoluted bits of law out there. If you are terribly concerned, you should contact your local taxing agencies and see what they have to say about it. Also, while you are there, asking them about how to file the use tax for every item you buy online.

And maybe the gun community is unaware of this activity.
While I don't have much faith in the collective intelligence of the "gun community" myself, I certainly do believe that they are aware of the concepts of shopping around and realizing that different places charge different prices for the same thing.
 
The gunsmith I use for transfers charges $21 for it. The only tax is on the $21 he charges. This is for a pre paid transfer from one FFL or individual to a FFL ( him). He enters it into his books ( in amd out)
and makes the call.

Oneshooter
Livin in Texas
 
Boy this was fun. Bottom line is pay what you're comfortable paying and if you question whether taxes should be collected - contact your state tax office.

Whenever possible I do my business with local shops as I want them to keep their doors open - which provides me with a local selection - and a place to hang out and chat...
 
If title to the firearm passes to the dealer then he would be required to collect and remit sales tax. Whether or not the transfer fee is subject to sales tax is a function of the individual state tax code. If title to the firearm does not vest in the dealer then he would not be required to collect sales tax on the firearm in Ohio. In addition to the ethics of collecting tax if the title to the TTP does not rest with the dealer, many (most?) states have some form of "unjust enrichment" provision in their tax code that requires the person collecting the tax to remit the tax collected to the state when collected in error if the erroneous collection is not refunded to the consumer.
 
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