A new law that will allow credit card companies to flag suspicious purchases at firearms stores continues to be contested. Some states have already banned it, but it’s approved to be law in California.
This is a controversial topic. In fact, Mastercard, Visa and American Express all initially agreed to come up with a standalone merchant code specifically for firearm stores, but then they took a pause once they received backlash from Second Amendment advocates. Now, they’re all in again after the law has passed in California.
Retailers are assigned a 4-digit merchant code based on what they sell. There are different categories for different goods, and right now, gun shops are categorized under sporting goods stores but will soon have their own code.
“These codes are not item level specific,” said Hudson Munoz executive director for Guns Down America.
Munoz said the new merchant codes could help spot gun violence before it happens.
“What they do is classify the retailer so at that level, we can say somebody paid $4 to take a toll road or $75 at Barnes & Noble or $1,000 at a gun store,” he said.
Merchant codes are often used for fraud detection.
“Merchant category codes can be used to create what are called detection scenarios. The detection scenarios say, ‘Hey, something’s not right here. Take a deeper look. See if there’s a problem, and if so, report it to law enforcement,’ ” Munoz said.
The idea is that the new codes could recognize a similar scenario when it comes to guns. However, not everyone is on board. Second Amendment advocacy groups say the codes are a violation of privacy.
“Gun owners do have privacy rights and if they want to purchase ammunition or if they want to buy a firearm, they shouldn’t be having to look over their shoulder if a credit card company is keeping tabs on them,” said Second Amendment Foundation spokesperson Dave Workman.
But gun control groups say giving gun stores their own merchant codes doesn’t infringe on anyone’s rights.
“The code bolts onto an existing system for classifying retailers, and that has any number of benign uses. So, the notion that this is like unwarranted tracking, I think, is overstated,” Munoz said.
“The concern out there, and when you’re talking about California, it’s a justifiable one, this is becoming some sort of a backdoor gun registry. And naturally, gun owners are concerned about that,” Workman said.
This new law will go into effect in May 2025.