Citi Merchant Services Refuses To Process Credit Card Sales For Firearms
January 11, 2008
I have been hearing mumblings and grumblings lately that Citi Merchant Service and First Data Corp. had stopped accepting their credits cards used in the purchasing of guns. Thanks to a Black Bear Blog reader who alerted me, it seems that the National Shooting Sports Foundation has verified this to be true and explains what has happened.
The story has become a bit bigger than just the credit card processing. NSSF posted on their website information about this announcement by Citi. NSSF posted a copy of a letter sent to CDNN Sports, Inc., a company that sells firearms, from Citi Merchant Service. That letter stated that Citi was dropping CDNN and would not be processing any more of their firearms transactions.
Citi explained to Charlie Crawford of CDNN Sports, Inc. the reason they were being dumped.
“…..due to the sale of firearms in a non face-to-face environment. Keep in mind that a violation of the Gun Control Act occurs when a gun offered online is sold to an individual in another state; the act prohibits selling a handgun to a resident of another state. Shipping across state lines is also banned, yet guns for sale online reach people across the country. We at Citi Merchant Service are unable to monitor or track adherence to these Gun Control laws.”
NSSF apparently posted this information at their website to inform readers and members of actions by Citi Merchant Service. At the same time, in a letter ultimately sent to Citi, Jake McGuigan, Director of Government Relations and Ted Novin, Director of Public Affairs for NSSF, believed this letter that was sent to CDNN Sports, Inc. had to have come from a single, perhaps even unauthorized employee of Citi Merchant Service, because it “contained so many errors that one could only deduce that it was an uniformed mistake that would consequently be corrected.”
In what to me anyway, seems to be a very childish move, First Data Corp. sent an email to NSSF as a plea to, “respectfully request that you remove the posting from your website regarding Citi Merchant Services and First Data Corp.”
First Data Corp insisted the posting at NSSF site was inaccurate. They explain that the letter, of which NSSF posted on their website to CDNN Sports, Inc. from Citi Merchant Services and First Data Corp, “did a less than satisfactory job of expressing applicable policies.”
In their feeble attempt to right the record, First Data Corp explains why they won’t process cards for purchases of guns online. The company’s position is, “Our policy restrictions address only the sale of firearms in a non face-to-face environment. Non face-to-face transactions occur when a cardholder is not present in front of a merchant and includes mail order and online purchases. It is our policy not to service merchants that make non face-to-face sales in a number of industries, including firearms.”
It became obvious to NSSF that Citi Merchant Service and First Data Corp either were just plain anti-gun or were ignorant of the laws or both. NSSF replied to the request to take down the website posting.
NSSF refused to take down the posting and explained that according to the information they had received, including the email sent to them, the information on their website was accurate.
NSSF will not remove its Web posting nor will we rescind or alter our story.
NSSF went on to tell them they obviously were totally ignorant of existing laws.
Your antigun corporate policy is based on ignorance of the law applicable to the sale of firearms.
It’s so bad that NSSF had to explain to CMS and FDC the legal industry processes they were interfering with.
Furthermore, the policy of First Data and Citi Merchant Services interferes with the receiving and shipping of inventory from and to federally licensed firearms retailers, distributors and manufacturers. This inventory supplies not only lawabiding Americans, but military and law enforcement agencies as well.
Got Citi?
Tom Remington
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I have done business with CDNN, they are good people. Citi has no clue what they are talking about and has no business telling people (wrongly) that they are in violation of the law.
I don’t hold any Citi or First Data cards, nor do I do any business with them. If I did, the accounts would be cancelled immediately, and a reason for the cancellation would be provided in writing, both to the account manager and to the upper management.
I realize it’s a bit tougher for a retailer to switch credit card processing companies than it is for a consumer to drop a credit card, but I would hope that there is a mass exodus from the CITI/FDC services unless this issue is corrected in a satisfactory manner.
Citi is one of the few businesses in town with a “no guns” sign on the front door.
The problem is that FDC processes 60% or better of the credit card transactions across the country. They also ‘own’ most of the data lines that ATM information is transmitted across (they own the STAR system). I thought that I was safe with my USAA credit card, but USAA has confirmed that FDC processes the transactions for all of their credit cards. FDC and American Express also have an agreement — see it here:(http://home3.americanexpress.com/corp/pc/2007/fdc.asp)
First Data is everywhere and is not soley affliated with Citi.
I hope that they feel major backlash as a result of their decision but I am afraid that this just might be the start of something bigger. I will not give up my right to purchase and own firearms and will not have FDC or Citi telling me what to do or how to do it!!
Thanks for that information Diane. I hadn’t taken the time to investigate how big their influence is.
I am extremely disappointed with Citi and First Data stance with their anti-gun policies. I have been a card holder for many years with Citi and I will now be closing my account with them. As a Life Member of the NRA and LEO, I will not support any organization that does not preserve the rights of law abiding citizens.
Todd
[...] is blogging about it? Read more at: Black Bear Blog Camo [...]
[...] Texas based company CDNN Sport of Abilene, Texas is in the spotlight. It seems that Citi bank is refusing to honor credit card sales to the company. Citi merchant services is claiming that CDNN sells firearms over the internet which they oppose. [...]
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The money spent processing credit cards is minimal at best and should be looked at as a necessary business expense. We will find that on average, it costs a few cents or a small percentage for each credit card transaction.Nice posting, so informative .Thanks
It is totally understandable that people are fustrated about this issue, but it all boils down to risk and not so much ignorance of the law. Non face-to-face credit card sales are the highest risk for any merchant type and it is easy to overcome a background check so if the store sells any firearms and it turns out to be a big scam and the merchant then has to payback the consumers of which were violated and if the merchant cannot afford to payback the damages it then is up to the credit card processor, msp, and/ or iso to pay for it. It comes down to statistics based on industry and if the payment processor feels like the industry is a potential hazard then they can create a holden account and withhold funds or even terminate a merchant file to prevent future credit card sales. My suggestion would be to use a high risk payment processor that is willing to accept risky sales. I am all for firearms, but non face-to-face sales is extremely risky and easy to manipulate background checks.
You need to ask your service providers what they are planning to do, and when. They may not have staff available to get this done in a reasonable time, and so you may be waiting an unacceptable time to get there. Know what is preventing early resolution and you may know whether it is worth hanging in with them, because switching can still leave you in the same problem soon.
We process credit cards for several retail guns stores. We would love to help all gun store owners
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