Compliance is a component of every retail FFL operation. From firearm Acquisition and Disposition to gunsmithing and storage, compliance is at the center of critical retail procedures and the subject of ATF inspections.
In the pandemic shutdown-riddled year of 2020, the ATF conducted 5,827 firearms compliance inspections – nearly one-third as many as of the previous year. Of the FFLs inspected, 44% recorded at least one violation. Among the 10 most frequently cited violations, three were related to the Acquisition/Disposition of firearms with the remainder related to the completion of ATF Form 4473 or Form 3310.4. While common errors, these violations can put firearm dealers at risk of further consequences if not corrected. And with greater emphasis placed on firearms compliance by the Biden administration, there’s increased pressure on FFLs to seek perfection.
However, FFL owners and operators need not feel alone in their battle against compliance violations. Thanks to the development of FFL technologies, firearm retailers can streamline standard processes to maximize efficiency while also reducing compliance risk.
Electronic Bound Books
The backbone of any firearm retailer is the Bound Book. When firearms arrive, they must be Acquired in the FFL’s Bound Book before being transferred or sold. Similarly, when firearms are transferred or sold, their record must be Disposed. While many small and low-volume retailers continue to use paper logbooks, most FFLs have converted to electronic versions to track firearms.
The benefits of an electronic Bound Book are of convenience, security and compliance. Electronic Bound Books digitize firearm records so they can be accessed anywhere, allow records to be integrated with point of sale (POS) systems and other FFL software, prevent records from being easily lost, stolen or destroyed by water or fire damage, and create both administrative and customer compliance checkpoints to minimize human error. It’s this last reason how firearm retailers can most benefit from such technology.
Combined with electronic Form 4473, or e4473, electronic Bound Books limit errors in recording firearm and customer information by hand, as well as failures to complete forms as prescribed. Instead of manually entering individual firearm serial numbers, barcodes on firearm cases can be quickly scanned for bulk Acquisition as soon as they arrive. And unlike traditional paper 4473s, digital forms allow customer data to be standardized and presented clearly, customers to sign their names electronically, forms to be stored digitally (with an ATF variance) to save paper costs and facility space, and the overall firearm transaction process to be monitored and controlled step-by-step.
Integrated POS System
The second piece of the retail FFL technology puzzle, POS systems allow dealers to accept payment for firearm, ammunition and shooting accessory transactions. While a monitor, credit card reader and cashbox may be sufficient for some operations, integrated POS systems allow FFLs to do more, including manage inventory and employees, create gunsmith work orders, produce sales and accounting reports, and connect with Bound Book and ecommerce tools.
Rather than technology being siloed, an integrated POS allows for firearm information to flow freely between software without the need for data reentry – an opportunity for error. With such technology, a POS can pull a specific firearm from the Bound Book, start and process an e4473, take payment to complete the transaction, properly Dispose of the firearm, generate multiple sale forms and update in-store and online inventory of available firearms.
It may seem like a lot, but automation between software allows for simpler transactions without compliance getting lost in the process.
One of the biggest hurdles for firearm retailers is managing Form 4473s. Federal law requires completed 4473s be retained for 20 years, meaning large firearm retailers must print, organize and store tens of thousands of documents for no less than two decades. Alternatively, FFLs can seek an ATF variance for their digital storage.
By obtaining an ATF digital storage variance, retailers can use hardware and cloud-based technologies to store these digital forms where they can be accessed when needed and protected from loss or damage. But digital storage isn’t just limited to 4473s. Retailers can also store FFL licenses, firearm scrap/destruction photos and even ATF variances themselves digitally, with documents often able to be directly linked to Bound Books and other tools as reference.
Whether saving physical space or protecting files from loss and theft, digital storage offers FFLs a cost-saving and safe means of managing paperwork needed when the ATF comes knocking.
The single most important facet of operating a firearms business, compliance can often seem like a burden to FFLs. However, armed with the right technology, retailers can effectively minimize transaction errors to reduce compliance risk, eliminate ATF violations and focus more on operating a successful firearms business.