California Implements First Merchant Category Code for Firearm Dealers

July 2, 2024

WASHINGTON — Yesterday, California became the first state to require the use of the merchant category code (MCC) for firearm and ammunition dealers, with Colorado expected to follow closely behind. As of July 1st, in states where required, merchants whose primary business involves the sale of guns and/or ammunition will be categorized under the “Guns and Ammunition Shops” code, which was created in 2022. Guns Down America, a national organization at the intersection of gun violence and business, and Brady, the nation's oldest gun violence prevention organization, applaud the implementation of this potentially life-saving code.

Hudson Munoz, Executive Director of Guns Down America: "The only thing controversial about the gun store merchant code is that it didn’t already exist. Gun retailers have long hid behind the sporting goods merchant code—even if the only products that line their shelves are guns and ammunition. Every other retailer has an accurate merchant category code—and if bicycle shops and sporting apparel have their own codes, so should gun retailers. This code brings gun stores formally into the financial system, holding the industry accountable to the same standards as the rest of the retail economy. California's government should be commended for treating gun merchants like every other business, despite the gun industry's attempts to undermine this effort through misinformation and fear-mongering.”

Tanya Schardt, Senior Counsel and Director of State and Federal Policy for Brady: "California's law ensuring the use of the Merchant Category Code (MCC) for firearms retailers marks a significant step forward in our efforts to prevent gun violence. By categorizing firearm and ammunition retailers distinctly, financial institutions have a critical tool to identify and flag dangerous activity, potentially preventing gun trafficking and mass shooting tragedies before they occur. This common-sense measure treats the firearms industry the same as all other industries, and enhances our ability to protect communities from gun violence."

Guns Down America and partners have been pushing for implementation of the gun store merchant category code nationally and in states across the country. Click here to read the Gun Store Exception report that explored the impact of payment processors on gun violence.

With the code going into effect in California yesterday, a dangerous patchwork of state-level bans on MCCs, including new laws in Georgia, Iowa, Tennessee, and Wyoming also go into effect, underscoring the need for federal legislation to to resolve the conflict between state laws and end the weaponization of this banking standard that is letting gun and ammunition retailers operate under a special exception despite the threat to public safety and potential benefit for crime prevention.