It’s no secret there’s a shortage of ammunition and firearms. Unfortunately, this shortage has triggered a retail frenzy over the past 18 months. Nearly 40 million guns were purchased legally in 2020, and another 4.1 million were bought in January. U.S. gun sales in January surged 60% to 4,137,480. This makes it the largest single month since figures started to be recorded in 1998. The gun sales industry has become an example of the double-edged sword effect—the basic rule of supply and demand. The less guns, ammo, and supplies that are available, the more people will be lined up to grab any and all inventory as soon as stores stock up. Moreover, without inventory, most shops cannot compete to drive customers into stores. So, where does this end, and what can pawn shops expect in firearm sales through 2021? First off, what happened? Short answer, 2020 happened. Let’s be frank: What didn’t go wrong in 2020? First, COVID-19 hit full force in early 2020, shutting down businesses, manufacturing plants, retail stores, and so much more. By our estimation, this lit the match to cause one serious chain reaction in the firearm industry. Next, our country found itself caught in the midst of a political war. It was the perfect storm. This media-driven “molotov-cocktail” hit the country hard. The minute stores opened, ammunition was swept off the shelves. Firearm application submission went through the roof. More than 21 million gun background checks were conducted in 2020 – up 60% from 2019. All while firearm and ammo manufacturers were still shut down. The end result – one of the largest shortages we have ever seen. Shortages are lightening up. The good news is most of the manufacturers and distributors have stepped up. As of April 2021, we are seeing signs of inventory coming down the pipeline. Companies, like Ruger and Smith & Wesson, have come forward to ensure their customer’s new processes are in place and that product is coming. While it may take some time to restock circulation, we can all sleep a little easier knowing that firearms and ammunition manufacturers are doing their part to make more inventory available in the very short term. This scenario would likely put the general public at ease and in turn decrease the instant demand for guns, ammo, and supplies once again bringing balance to the firearm industry.  A shift in power For gun stores, pawnshops, and firearm customers the not-so-good news is a major shift in power has taken effect. One of the largest most controversial items on the forefront of the Biden Administration’s docket is gun control. We may very well in fact be in the midst of firearm history as we know it. In March of 2021, a bipartisan coalition in the House of Representatives passed two bills to close what they refer to as “loopholes” in the gun background check system. Additional major changes are mounting from the Biden Administration aiming to appoint a new Director of the ATF as well as working to pass more restrictions and laws around manufacturing guns, purchasing guns, and yes simply owning guns. Should these reports have any truth and beyond that new laws put into place, this will surely impact the firearm industry as a whole. To what level we can’t exactly say at this moment. We might assume this could make it more difficult to purchase and possess guns and ammunition in the United States. This could push the American consumer market to continue to line up around the block awaiting retail distribution deliveries.  The long and the short of the barrel If trends are telling us anything, like a pawnshop or any firearm retail store, it’s more important than ever to stay informed of ATF compliance and offer customers the ability to legally purchase a firearm in the most convenient ways possible. With demands seemingly increasing through 2021 and lines to purchase becoming longer, retailers should aim to find ways to better serve their customer base. Streamlined digital solutions like the E4473 integration will prove largely valuable to keep things quick, simple, and law-abiding when it comes to gun sales. For more information on E4473 and how we are working to digitize a 360-degree firearm selling experience, check out our website! Sources: https://www.usatoday.com/story/money/2021/02/10/this-is-how-many-guns-were-sold-in-all-50-states/43371461/ https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/07/fact-sheet-biden-harris-administration-announces-initial-actions-to-address-the-gun-violence-public-health-epidemic/ https://www.foxbusiness.com/lifestyle/gun-background-checks-2020-record-firearms

The National Instant Criminal Background Check System (NICS) was launched as part of the Brady Act in 1998 and is run by the FBI. The FBI website describes the mission of the NICS as “saving lives and protecting people from harm.” The goal of NICS background checks is two-fold: ensuring the timely transfer of firearms to eligible buyers and not letting firearms fall into the wrong hands (source). From November 30, 1998, to September 30, 2022, the FBI conducted 434,836,997 background checks. ATF Form 4473 is the first step in this process. As a firearms dealer, here’s everything you need to know about NICS background checks. NICS Background Check System In order to participate in the National Instant Criminal Background Check System, you first need to enroll. This involves completing the NICS enrollment form which you can find here. The fastest way to complete a background check while your customer is in the store is by using the NICS E-Check system. “FFLs who use the NICS E-Check are able to initiate an unassisted NICS background check for firearm purchases via the Internet.” It requires a separate enrollment, which can be completed here. The speed of the background check depends on which contact method you’re using. Call centers can process a background check in a little more than two minutes on average. Calls requiring further investigation take about eight minutes. Electronic processing is the fastest at just under two minutes. Whether you’re requesting the background check by phone or by E-Check, you should make sure to have all the necessary information — for all the checks you want to request — ready to go before calling or logging in. The customer service representative won’t be able to hold while you look for missing information. Here’s what you need: Sections A & B of the new 2020 Form 4473 fully completed A valid photo ID for each background check An answer of “yes” to question 21a, answers of “no” to questions 21b-21k, and answers of “no” to questions 21.1.1 and 21.1.2. (unless the transferee/customer is using a Visa, in the US temporarily, possess a valid hunting license or other qualifying exemption document). The Gun Control Act (GCA) makes it unlawful for certain categories of persons to ship, transport, receive, or possess firearms or ammunition, to include any person: convicted in any court of a crime punishable by imprisonment for a term exceeding one year; who is a fugitive from justice; who is an unlawful user of or addicted to any controlled substance (as defined in section 102 of the Controlled Substances Act, codified at 21 U.S.C. § 802); who has been adjudicated as a mental defective or has been committed to any mental institution; who is an illegal alien; who has been discharged from the Armed Forces under dishonorable conditions; who has renounced his or her United States citizenship; who is subject to a court order restraining the person from harassing, stalking, or threatening an intimate partner or child of the intimate partner; or who has been convicted of a misdemeanor crime of domestic violence. See additional details by visiting the  ATF website. NICS Background Check Databases While four primary databases are searched during a NICS background check (The NCIC, the Triple I, the NICS index, and the DHS database), the FBI NICS checks searches more than 60 databases or “indexes” and checks state records which are submitted daily/weekly/monthly by state agencies. The National Crime Information Center (NCIC) is “a criminal records database allowing criminal justice agencies to enter or search for information about stolen property, missing or wanted persons, and domestic violence protection orders; to get criminal histories; and to access the National Sex Offender Registry.” The Interstate Identification Index (III) is a national index of criminal histories maintained by the FBI. It includes people who have been arrested for a serious crime anywhere in the U.S and allows states to share information on criminal activity between themselves. The NICS Index is used to determine whether or not a person is eligible to purchase firearms or explosives. The Department of Homeland Security’s Immigration and Customs Enforcement database is used when the prospective buyer isn’t a U.S. citizen. NICS Responses If the response to a background check is “proceed”, the NICS transaction number (NTN) is recorded in field 27b and the firearm is transferred. If the response is “denied”, a NICS resolution card with NTN at the bottom is provided to the customer so they can appeal. If the response is “delayed”, the NICS has three days to research and respond. Often the NICS examiner can provide a response immediately, but if there is no response after three days, the transfer of the firearm can proceed. From November 30, 1998, to September 30, 2022, 2,139,545 firearm transfers have been denied, ½ of 1% of the number of background checks conducted. Of those, 51% were due to the conviction of a crime, 10% were because the person was a fugitive from justice, and 10% were due to the unlawful use of a controlled substance. The FBI, through NICS, provides full-service background checks for 37 states, the District of Columbia, and three U.S Territories. Thirteen states act as a point of contact (POC), which means that FFLs contact the state-designated agency directly for background checks. The remaining states act as a partial POC, sharing responsibility with the FBI for background checks. A complete map of NICS participation can be found here. When a state acts as a POC, it expands the number of records that are searched. If a potential buyer has a state record that doesn’t allow the purchase of a firearm, it will be found when the state databases are searched. The federal government encourages states to share their records with the FBI, but it isn’t a requirement. The NICS Improvement Amendments Act of 2007 was passed to improve communication between the states and the feds, leading to more records available for search in the national databases.   To go deeper on the details of the National Instant