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A new credit card code is a first step toward preventing gun violence, advocates say

A gun shop in Yuma, Ariz. Such retailers will soon have their own "merchant code" to categorize credit card purchases made there.
Patrick T. Fallon
AFP via Getty Images
A gun shop in Yuma, Ariz. Such retailers will soon have their own "merchant code" to categorize credit card purchases made there.

Gun control advocates are cheering a new change in the credit card industry that they say could help prevent gun violence.

This week, credit card companies Visa, Mastercard and American Express all said they would adopt a new code to categorize sales at gun shops, a move that advocates say will make it easier to flag suspicious gun sales.

"Today's announcement is a critical first step towards giving banks and credit card companies the tools they need to recognize dangerous firearm purchasing trends – like a domestic extremist building up an arsenal — and report them to law enforcement," said John Feinblatt, president of Everytown for Gun Safety, a gun control advocacy group, in a statement last week.

All purchases made with credit cards are categorized with what's called a "merchant code" – a special code assigned to various types of businesses like utility companies, grocery stores, gas stations, airlines, hotels. And, for years, gun shops have been categorized as miscellaneous retail or sporting goods stores.

Now, after a Democrat-supported effort led by the socially progressive bank Amalgamated Bank, gun stores will have a separate code.

But experts say it's unclear what impact the new policy will actually have, if any, on gun violence.

Jeffrey Fagan, a law professor at Columbia University who researches the effects of gun policy, said the measure could reduce gun violence "at the margins."

"As a nation, we keep track of sales of dynamite and other dangerous products that can cause death. This policy is in line with that thinking," he said.

The new merchant code system is limited

A 2018 investigation by The New York Times listed several examples of high-profile mass shooters who used credit cards to purchase weapons and ammunition, including those who carried out the attacks at the Pulse nightclub in Orlando, Fla., and a movie theater in Aurora, Colo.

However, several had purchased their weapons at retailers that may not be categorized under the new merchant code. For instance, Bass Pro Shops and Gander Mountain – the two chains where the Aurora shooter purchased his weapons – are general sporting goods stores that sell fishing gear, camping supplies and clothing alongside firearms.

And many guns aren't purchased at retail stores at all. A national firearms survey from 2015 found that only about half of guns are purchased at retailers. People often buy guns from family members or friends, from private sales online, or at gun shows.

Criminals are even less likely to buy guns in stores, federal data shows. In a 2016 Department of Justice survey of people incarcerated in federal and state prisons, only 7% of those who had a gun while committing their offense had purchased that weapon under their name from a licensed dealer. More often, the survey found, they had gotten the gun from a family member or friend, or purchased it in a black market deal.

"I don't see how it works. I don't see why it's necessary. And the only reason it's being advanced is for a political gun control agenda," said Lawrence Keane with the National Shooting Sports Foundation, a firearms trade association that opposes the change.

Some have privacy and surveillance concerns

Banks are required by federal law to report suspicious activity that could be related to certain financial crimes, like money laundering or funding terrorism. Supporters of the new merchant code say that it could work similarly.

"You can imagine, for example, it raising some flags if an individual purchases multiple guns every week," said Jacob Charles, a law professor at Pepperdine University who specializes in firearms law.

It's not clear whether or how financial institutions would act on such flags.

Additionally, credit card companies generally do not have access to which items were purchased in any given transaction, only the total amount of the sale.

In other words, imagine two customers at the same gun shop: The first could buy several guns and multiple boxes of ammunition for a total of $3,000, while the next customer might purchase a high-quality gun safe for the same price. The two transactions would appear effectively identical to the credit card company.

Some experts have expressed concerns about privacy, which echo those raised by abortion rights advocates in the wake of the Supreme Court's decision to overturn Roe v. Wade. With abortion bans enacted in more than a dozen states, some have worried that credit card histories could become evidence in abortion-related prosecutions.

The combination of law enforcement with wide-ranging surveillance over purchase histories teeters on "terrifying and potentially dystopian," said Shobita Parthasarathy, director of the Science, Technology and Public Policy program at the University of Michigan.

Parthasarathy also suggested the measure could have the unintended consequence of driving people to use cash or multiple credit cards, thereby making gun purchases more difficult to track.

Advocates say it is just one step

Advocates say they see the merchant code change as one step in a larger push to turn up the pressure on the gun industry.

"What we want to do is prevent another Buffalo from happening," said Chantel Jackson, a Democratic New York state assembly member who lobbied credit card companies to adopt the code. "The truth is, we have to start doing every single thing on every single front to make sure we are combating this."

Several payment systems, including Apple Pay and PayPal, have already chosen to ban the sale of guns on their platforms. Credit card companies, advocates say, could follow suit.

Credit card companies have historically shown little appetite to take on such measures. ("We do not believe Visa should be in the position of setting restrictions on the sale of lawful goods or services," a Visa spokesperson told the Times in 2018. "Asking Visa or other payment networks to arbitrate what legal goods can be purchased sets a dangerous precedent.")

Still, in the wake of what they've called a victory with the merchant codes, advocates have repeated their calls.

"Different actors in our society have to step up and do what they can to save lives. That extends to the president, to members of Congress and to private companies," said Igor Volsky, the executive director of Guns Down America.

Copyright 2022 NPR. To see more, visit https://www.npr.org.

Becky Sullivan has reported and produced for NPR since 2011 with a focus on hard news and breaking stories. She has been on the ground to cover natural disasters, disease outbreaks, elections and protests, delivering stories to both broadcast and digital platforms.