Why do dealers charge 2-3% extra when using a Visa or Paypal to buy a handgun?

This is what the banks that handle the transfer of funds to the merchants account charges when a merchant accepts Visa, M/C, PayPal
Hope this helps
Gary

They do it to cover their costs, even though in most cases it's in violation of their merchant agreement.

BLACKGUN is right.  it's a charge to use the card that the dealers must pay.  so, of course, they pass some/all of that on to the customer.

that's why some stores only accept certain credit cards.  i know sam's club here in indy only accepts discover because they (according to sams' club) have the cheapest rates.

It is. That's why they try to be sneaky and
claim that all prices reflect a cash discount
of 3%. I think it's foul.

They are being charged by the banks so they are passing it to us. Just like when you use those checks that get with your Visa/ M/C bills, will be charged a cash advance fee.

It usually only bugs me from a dealer when I'm already getting screwed on the price, and they he brings up the +3%, otherwise I just suck it up.

*edited 'cause I'm tired of arguing with FFL holders.

If you would prefer I could mark your gun up 30% instead of just chaging you $25 for a transfer.

I'm sure you'll argue, but I still think $25 is a pretty sweet deal for 10 minutes of paperwork.  That comes out to $150 an hour for transfers on a gun you didn't have to buy, keep in the store for XXdays/weeks, have to give a sales pitch about, etc...

I stick to one dealer and buy most of my guns from him, but if he doesn't have what I need now, or can't get it for a reasonable price, then he gets my $25, I don't complain about it, so he shouldn't either.

The $25 is not just for the time to do the paperwork unless the guy is doing it in his livingroom at home.The $25 i get includes rent on the store, lights and every other expense you can think of it takes to run a business.
We don't make a dime until the monthly bills are paid.Don't forget, god help us if they find any mistakes on that paperwork when we get compliance checks.Then they want to take away our living.It's a tough living and if you begrudge any dealer who charges $25 for the transfer, get into the business and try it your self.BTW good and regular customers get transfers for free.These same customers allow me other avenues to pay the rent.
Eric the ammoman

as a consumer your paying for it one way or another no matter,what you buy or where you shop.
the dealer is just being upfront about.
i have been in the shops that charge full retail and been in the places that have the best prices,and those guys don't make a great deal of money doing it,a good many dealers do it just to be in the trade.
boxer

The credit card charge is a rip off but credit cards are just too easy and I’m just too lazy most of the time to go gather up a MO or cashier’s check. I really appreciate it when a  seller will take a check and I will pay a little more and buy from that dealer if I have a choice. I also appreciate it when a dealer takes credit cards with no extra charge. That’s why I buy so much ammo from Ammoman.  Looking at it from the other side, my local gun dealer charges me $10 for a transfer because even though I buy guns (lot’s of guns) and ammo elsewhere, I do buy from him occasionally  and he makes a heck of a lot more money off of me than he does selling a guy one $200 gun and a box of ammo every couple of years. I appreciate this too and if someone asks about buying a gun, I send them his way.

I just want to say though, that since I’ve read all the stories about the rip off dealers from all over the country and the problems people have finding a transfer dealer, I think I’ll go in and buy one of those over-priced rifles that he is never going to sell otherwise.

I'm the manager of a small hobby shop. The discount in our industry is typically about 40% off retail. Not a huge margin but ok to survive on. Then came the internet not to mention mail order which has been around forever. We are up against some VERY stiff compitition these days. I'm not complaining. That's called free enterprise. I carry one line if products that sell for around $1000.00. The discount on this line is 23%, and I pay the freight. About $15.00. My cost is $785.00. Now mail order price is usually 10% off plus no sales tax. So if I match that price I have to eat the 7% sales tax in my county. I am now selling this item for $837.00. A $52.00 profit. Not very good. Now, ask me to take a card on that purchase and I give back $25.11 to the card company. This gives me a profit of $26.89. And they better not sit one the shelf long or the numbers drop more. I have to sell a bunch fast to make money. That's how the discounters do it. I unfortunatly don't have that kind of volume. So I charge a little more and knock myself out giving the best service I can. It pays off with most my customers. They come back because they know I'll go the extra mile to take care of them. In turn they are willing to help me. It's a nice relationship. I don't know a thing about the retail firearms industry, but I'm sure it's the same. Just my point of view.

Railhead has it.  Quite a few dealers operate on a small margin and the CC card eats into that.  I buy alot of wholesale on the net and SGN and you know alot of margins are tight there.  CC is a convienence to me not the seller.  Swipe and i'm done.  Plus the merchant also has to wait to be paid from the CC company which I believe is once a month.  However whenever I am willing and dealing hear and otherwise I almost always eat the paypal fees because it is more of a convienence for me and it figure to be very little.  On very expensive items I will sometimes charge it depending on the deal that is worked out.  I am not a dealer of any kind though.  Just have to keep my wife in shoes [:D]

Klutch. Visa- M.C. are usually deposited at the end of the business day now. Discover and Am.Exp. can take up tp three days. That may just be my processer, but I think it is pretty much the same everywhere.

Dey gotta pay a vig on da cards.

A dealer I bought a gun from didn't tell me about the 3% until I picked up the gun and he already ran the credit card. He played dumb and said that he thought he told me over the phone and that he ususally has a big sign that says he charges for CC purchases. This really pissed me off. Not only did I have to pay a 8% sales tax he sneaked this in there that. I will not deal with dealers like this anymore, or anyone else that charges for CC use. If the dealer needs the money, they should just markup the price a little more, instead of playing this game.

Ammoman, hipwr223,

You are completely missing my point.  I don't mind paying $25 for a transfer.  I accepted it as a part of being a gun buyer a long time ago.  I was countering Hineline's post that sounded as if he thinks he's entitled to a +30% on every gun that comes into his store, and he's doing the buyer a favor by only charging $25 (forgive me if I read his intent incorrectly).

So you guys don't like doing transfers, I understand that.  It probably is a pain in the ass, but it's part of the job.  But if you were my local dealer, here's what you would get from me...  About $5000 in gun/ammo/parts/etc. purchases a year (and that's just the stuff I don't get from outside sales, like you Ammoman), and no I don't get my transfers free even though I consider myself a good customer.  So I pay MORE than my share of the shop owner's bills.  He has NO right to bitch when he can't get me a gun, so I have to get it elsewhere and have him transfer it, no matter how long it may take for the paperwork.  Hell, I'd rather pay a bit more to walk in the store, grab the gun off the shelf, examine it, pay the guy, and walk out with my gun TODAY, instead of a week or two later and find the gun is 60% instead of 99%.

My point is, I'm not bitching about the transfer fee, I appreciate what you guys do for us.  But on the flip side, you folks shouldn't bitch about having to do transfers and not profit 30% on a gun you didn't sell, afterall, we spend a lot of money with you.  And I do wish I had my own FFL, remember it isn't as easy to get one as it used to be.  On the flip side, if you don't like doing transfers, give up you FFL...


BTW, I take all my boxes and packing material, I don't think anyone likes me walking out of the store with an "assault rifle" in plain view...

The 3-4% markup is in violation of the seller's agreement with the credit card companies for using their service.  If you report them to Visa or Mastercard, then their credit privileges as a merchant will be revoked or refunded on your card.

My CC merchant account costs me .30 a transaction and the 2.3% of the total for Visa/Mastercard, even more for AE or Discover. Not to mention the cost of machine lease and online fees. And no where in my agreement does it say I can not charge the cost off to my customer.
Major stores pay a set monthly fee, because of their volume, and the small guy who only does 5-10 a month gets slammed.
TAC

One more thought on transfer fees, I buy almost exclusively guns that are considered 'preban,' so a lot of the time my dealer doesn't have what I need right away, or can't get it for a fair price.  It is then and only then that I have to go to an outside source to find what I need and have it transfered (at twice the fee for postbans $50, but that's another story).  

I can understand why a dealer would be pissed about the buyer that comes in every so often with a SGN and has you transfer a brand new gun from an outside dealer that you have in your store for only $50 more.  The folks that never buy anything from you, but will have you transfer every gun they buy, so they don't have to pay taxes.

So I understand why you don't like doing transfers for those types, however, folks like me that buy 50% of their guns from their local (trusted) dealer, do spend a lot of money with you guys, so we deserve a little bit of respect.

Good God, John!!!  Are you even reading my posts before you jump into rant mode???

For the third time, I don't give a flying f--k about paying for a transfer fee!!!  I accept it, and I've NEVER bitched about a transfer fee of $25 or less.

You're right, so I was wrong about the time to do a transfer, my point of my 2nd post was that I MORE than make up for buying out of state to my dealer in additional sales.

The 30% thing is a quote from Hineline, I don't know, nor to I care how much you make off each gun!!!


Since we are in different states, you will not have to worry about transfering a gun to me, I'll leave it at that.

If it makes you feel any better, I will now NEVER buy a gun from ANYONE other than my  local dealer, and I will try my hardest to buy over $4000 dollars (profit) worth of stuff from my local FFL, so I can single handedly keep him in business.

Sorry for the rant, but you just aren't reading my posts for content, you're taking words out of my mouth and implying feelings that I am not expressing.  And for the record, you picked guns as your business, don't bitch to me about your profit margin.  It isn't my responsiblity to keep you in business.

You need to check your local state laws. In Texas it is illegal for a merchant to add a credit card surcharge to a purchase - but the State of Texas and local government entities can (they are exempt)and does add the 3% surcharge if you pay any State (or local) fees, taxes, etc. with your credit card. This was in a news story I read recently on how the State of Texas was told that they had to disclose this when people pay by credit card. I don't know if any other states have laws like this but maybe someone could check and find out.

I do want to reiterate that I don't feel like my dealer owes me anything other than a fair deal that he'd offer to any other customer, no more no less.  If he wants to cut me a special deal every once in a while, great, if not, I won't curse him for it.  

I don't feel like I single handedly pay my dealers rent, but hopefully he has other customers in addition to me.  

So $5K (about 50% of my total yearly gun spendings) isn't much money???  Well, I'm not a millionaire (yet) so it IS a LOT of money for me.  I'm sure many other folks here would agree.  I consider spending that much green out of my yearly income shows the degree of loyalty I have to my local dealer.

If that $500 profit pays even close to half your rent a year, than hypothetically you only need about 24+ customers like myself to cover your rent for the year, not too shabby if you ask me.

BTW I'd consider my dealer a friend, that's why I stick with him.  I use him whenever possible.  Here's an example of my loyalty (or stupidity if you wish):  I'm shopping for an HK/Fabarm FP6.  I found one at another dealer in my city for $325, I passed on it to get one for $430 from my friend/dealer.  Now if that isn't loyalty, I don't know what is.


So let's end this by agreeing that:

You are in a tough business, with profit margins that are not always as much as you would wish.  

No dealer owes me anything, but on the flip side I am not under contract to spend my money (no matter how little, or how much you believe it is) with any one particular dealer.

If you pukes would buy at suggested retail then we would gladly eat the 3%.  There is no big conspiracy going on "THERE IS NO PROFIT MARGIN IN NEW GUNS!" I have said it before and will say it again -Go get your own FFL and start making and saving your millions.  Rant off

That's why everything in the shop already has a 3% cash discount marked on it that you are not elegible for with a CC.

ARRGG!!!

OK, for the last times, I don't mind the +3%, I don't mind the $25 transfer fee, when the dealer is a good guy.  Most dealers I use are great, every so often I run into some serious crooks, the same as in ANY business.

Summary, I love my FFL, he can do no wrong!

1GR, can I have your FFL, since you are obviously unhappy with the money that you make???

HKocher - replied before I read the entire thread.  The problem with transferring the FFL is that it is just not that easy.  You would need a full rectal exam anyway so you might as well get your own.  Glad to hear you and your dealer are CLOSE.

Hell, I don't want to bother with the pain of getting an FFL nowadays, I was just busting your balls.  For the record, most of you guys are doing a great job.  Of course there are a few bad apples that ruin it for the rest.

Funny how people are VERY vocal when a dealer screws them, but they remain quiet for the most part when a dealer helps them out.

hipwr223: Where is your shop located? My Dad lives in Montgomery County, PA near Norristown. I'd love to be able to steer some bidness to an AR15.com'er.

Semper Fidelis
Jarhead out.