As an entrepreneur operating in the legal firearms industry, you are bound to be facing added resistance and scrutiny from all sides. In fact, you may be finding it to be difficult and costly to merely accept credit cards from law-abiding customers who are purchasing above-board weapons and accessories. Understanding why this is the case and obtaining cost-effective credit card processing for firearm merchants can make the road to a successful online or retail firearms operation much smoother.

The importance of accepting credit cards.

These days, you have to look long and hard for an online or physical store that doesn’t accept credit cards. After all, customers have grown accustomed to the convenience and added security of paying with plastic.

When you run a guns and ammunition business, the need to process these non-cash payments is even greater. That’s because firearms are big-ticket items. When making larger purchases, most buyers prefer to use credit cards. Add to this the increased focus on contactless payment methods during the coronavirus pandemic, and the priority for gun merchants to find a good credit card processing provider is even stronger.

The high-risk designation.

You are running a long-standing operation with an established history of customer service and adherence to all regulations. Even still, you may be experiencing delays or outright rejections from merchant service providers just because of the nature of your products. Why is this the case?

Simply put, financial institutions have one overarching priority: To make money and please their investors. As a result, they want to do business with clients who represent the lowest possible risk for chargebacks, defaults, fraudulent purchases, regulatory changes, or legal liability.

Like it or not, the firearm trade represents all of these possibilities to a much higher extent than your average commercial entity. Challenges include background checks, training requirements, minimum age restrictions, and the complexities of online sales. In fact, aggregators such as Stripe, Square, and PayPal (who often work with small businesses when they are just getting started) do not even accept firearms merchants as clients. When you do find potential credit card processors, you will likely experience long waits, rejections, higher costs, and increased scrutiny. So, what can you do to locate the best fit for your high-risk online gun business?

1. Work with a specialist.

It goes without saying that you will need to choose a provider who deals with high-risk merchants and who is friendly to the gun industry. However, you should go a step further and focus your attention on choosing one with experience and expertise in credit card processing for firearm merchants.

By collaborating with someone with industry knowledge, you'll have a partner who is well-acquainted with the inside details of the gun and ammunition sector. When you don’t need to waste time explaining seasonal fluctuations, federal oversight, or other niche issues, you can focus instead on doing what you do best: Growing your business.

2. Do your homework and organize your data.

No matter which vendors you ultimately choose to apply to, all will put you through a vetting process. Be prepared by collecting at minimum the following pieces of information:

• Valid government ID.

• At least three months of bank statements.

• A voided check from your bank.

• Copies of utility bills and your mortgage statement or rental agreement.

• EIN or Social Security Number.

• At least three recent credit card statements.

Also, be ready to discuss your company’s history, including any outstanding debts.

3. Operate under a policy of full disclosure.

Even though you may be considered “high-risk,” you should have nothing to hide from customers, regulators, or credit card companies. Openly share your comprehensive business model, and run a well-maintained website. At any time that it is requested, allow your books and complete product roster to be reviewed by the merchant provider, and make the vendor aware in advance of any changes you plan to make. 

4. Prepare for close scrutiny at all times.

As you undergo the application process, the company’s underwriters will be intent on ensuring that you represent a risk worth taking. Prepare for their inspection by having the following information available:

• Ownership and organizational documents for your business.

• Personal resume and credit score.

• Business plan and marketing strategies.

• Chargeback history.

• Business license, status, and history.

• Cash reserve on hand.

• Social media pages, including access to reviews.

5. Give yourself plenty of time.

Desperation can be one of your worst enemies as you search for the best specialty credit card processing company for firearms businesses. If you don’t give yourself enough time to calmly search for the best provider, you may wind up roped into a contract that features high fees, lengthy terms, and/or stiff cancelation penalties. While you are waiting to settle on the ideal candidate, explore alternative secure payment processing options such as ACH and echecks that can tide you over until you have the permanent solution that is best for your business.

Once you do find the perfect credit card processing partner, you can take advantage of numerous features that will enhance your business and please your customers. These may include the following:

• Complete point of sale systems that allow you to accept payments and keep your finger on the pulse of your back-office employee, inventory, customer loyalty, and sales reports.

• Mobile solutions that you can take with you on the road to gun shows or outdoor training demonstrations.

• Secure, online payment processing capabilities and expertise to walk you through every step of growing an ecommerce business.

In the end, the reality is this: Your gun business is considered high-risk and, as such, will incur elevated costs and be watched more closely. However, many of these concerns will be minimized once you find an experienced card processor with industry-specific knowledge and a complete array of features and capabilities that will enable your firearms business to hit its targets.