Master Gun Shop Banking Compliance Overnight

Operating any small business comes with its own set of challenges, but this is especially true if you are owning and running a gun shop. When it comes to compliance standards for the firearms industry, there is no room for error. For federal firearms license holders, this can be the difference between running an effective and compliant shop and having your business shut down completely. There has notoriously been a lack of support from traditional banks as a result of regulatory scrutiny and multi-state complexities, deterring banks from wanting to support and work with gun shop owners. This leaves many gun shop owners thinking, how am I going to stay compliant in such a regulatory industry?

By understanding the key regulations, compliance doesn’t have to be a headache. In this article, we will explore the ins and outs of multi-state FFL banking so that you can understand key regulations, adopt best practices, and work with experts like BKW Servicing to ensure you are on the right path.

Why Does Compliance Matter?

Understanding compliance regulations is crucial for operating any business, but this is especially true if you are a gun shop owner. If you do not meet state, federal, or banking regulations, your shop can experience extreme consequences that cut into your ability to operate.

By not following compliance regulations, you may be hit with hefty fines and penalties as a result of these regulatory violations. You could also have your license revoked as a result of not meeting FFL requirements, prohibiting your ability to sell firearms. Not to mention reputational damage that will impact your ability to grow your client base and produce word-of-mouth referrals. This is all to say, compliance is extremely important! Understanding your state and local laws is another important factor in this, as risks can be even greater depending on where you are operating.

Challenges You May Face

If you are wondering what is needed from you to master banking compliance, this section is for you. Let’s explore a few compliance challenges you may face and how you can address them when owning and running a gun shop.

1. Federal Regulations: There are strict guidelines in place for FFL holders by the Bureau of alcohol, tobacco, firearms, and explosives. If you do not stay compliant with these regulations, you can have your license revoked and other penalties that prohibit you from selling firearms.
2. State and Local Laws: Every state will have its own laws when it comes to governing firearm sales, which makes things extremely complicated if you are operating in multiple states. Some states require additional background checks or waiting periods before you are able to legally sell a firearm, along with tax and reporting requirements that differ depending on the location.
3. Banking Woes: As we mentioned previously, banks are typically very hesitant to work with gun shops due to a variety of concerns. Gun shops are considered to be high risk businesses, so even if a bank does agree to work with you, you may experience high fees, strict account monitoring, and sudden account closures if policies change.
4. Payment Processing: It is likely your customers are not paying for their firearms in cash, this is 2024 after all! Credit card transactions, mobile payments, tap-to-pay, and online sales, will require compliance with your Banking and payment processor. Ensuring that everything is within compliance throughout different methods of payment can be a challenge if you do not work with the right payment provider.

How To Prevent Penalties

We’ve talked a lot in this article about perceived penalties that you might be exposed to when operating a gun shop. Next, let’s explore how you can prevent these penalties and continue operating compliantly.

Get Familiar With Regulations

First and foremost, it is important to get familiar with regulations! Don’t only rely on your bank or payment processor to do the heavy lifting for you, it is important to have a general understanding of what is expected from your shop in order to avoid having a compliance oversight. Get familiar with ATF guidelines for FFL holders, research state-specific laws for every state in which you operate, and stay informed about possible changes that happen with new policies.

Train Your Team

It is not only important for you to be educated about compliance and regulation policies, but to encourage education amongst your team as well. Ensure that your staff understands compliments requirements and the importance of operating under these policies. This training can reduce the risk of errors that can result in shop closures and other fines.

Secure Your Data

Unfortunately, the Firearms industry is no stranger to fraud and identity theft. Due to the high value of products sold within this industry, it is important for you to invest in secure banking systems so that you can protect your customers and your business. It is also important to protect any customer data to maintain trust and avoid any data breach from your business.

How BKW Streamlines Compliance

If you are looking for an experienced and reliable partner to help navigate you through these compliance challenges, BKW Servicing is here to help. Our staff is trained to offer a customized approach for FFL holders, offering comprehensive support to keep your business compliant and help you better educate yourself about laws and regulations. With expert guidance, multi-state banking solutions, transparent pricing, and dedicated support, our team is your operation’s secret weapon.

Ready to master compliance in your field? Contact BKW Servicing today!