American Express, Visa, Mastercard Implement Code for Tracking Gun Store Sales Amid Regulatory Uncertainty

Major credit card companies are moving ahead with implementing a merchant code available for firearm and ammunition retailers in order to comply with a new California law that will allow banks to potentially track suspicious gun purchases and report them to law enforcement, CBS News has learned.

Retailers are assigned merchant codes based on the types of goods they sell, and these codes allow banks and credit card companies to detect purchase patterns. Currently, gun shops are lumped in with other types of retailers such as sporting goods stores.

Mastercard, Visa, and American Express initially agreed to implement a standalone code for firearm sellers but later paused their work on it after receiving backlash from Second Amendment advocates concerned that tracking gun purchases would infringe upon the rights of legal gun owners. Gun control activists hope this code can be used as a tool to help identify suspect purchases and, consequently, stop gun crime, including mass shootings. Proponents say a code for firearms merchants would allow banks and credit unions to alert law enforcement of potentially suspicious purchasing patterns in the same way they already flag other types of transactions such as those that suggest identity theft or terrorist financing.

While a merchant code for standalone firearm and ammunition sellers would yield data showing a transaction was made at a gun store, the credit card companies say this code will not provide details about the customer or insight into individual items purchased. At least seven Republican-controlled state legislatures have banned the code while nine other legislatures are considering similar legislation. However, deep blue California passed a law requiring retailers that primarily sell firearms to adopt it by May 2025.

Last month, executives from Mastercard, Visa, and American Express each wrote to congressional Democrats assuring them the code would be available to retailers in California by that deadline, according to documents obtained by CBS News. "The applicable standalone merchants in California primarily engaged in the sale of firearms will be required to utilize the code," wrote Mastercard executive Tucker Foote.

The letters from credit card executives reflect the tricky political waters these companies find themselves in. "With respect to the [firearm merchant code], there continues to be a tremendous amount of regulatory and legislative uncertainty," wrote Visa senior vice president Robert B. Thomson III, adding that the company will endeavor to comply with the requirements in California. "Given the conflicting state laws on this topic and the likelihood that other states will enact legislation to either restrict or mandate the code, our implementation pause remains in effect."

Senator Elizabeth Warren, a Massachusetts Democrat, said in a statement, "It's a start that credit card companies have committed to comply with the [merchant code] law in California, but we need implementation across the country if we're going to do everything we can to prevent gun violence." She added, "The sooner credit card companies and banks begin using the new [merchant code] for gun retailers and tracking suspicious gun purchases, the more mass shootings we will have a shot at preventing before they occur."

Advocates for gun violence prevention continue to push for the code's implementation despite efforts by states to stymie it. A new report from Guns Down America calls for federal legislation to resolve the conflict between states and argues that the code could prevent violence stemming from cases of straw purchases, gun trafficking, and mass casualty events. The report cites eight mass shootings that they say could have been prevented because each perpetrator used credit cards to purchase large arsenals in a short period of time. "If a system for collecting and flagging suspicious gun and ammunition sales had been in place over the past 15 years, law enforcement officials would have had the opportunity to potentially intervene and prevent multiple mass shootings," the report says. Hudson Munoz, the executive director of Guns Down America, said the credit card companies' attempts to "stay neutral on this issue" risks "uninhibited criminal abuse of the payment system." The organization is calling on the companies to make the gun store code available in every state where it has not been banned.