What is a Straw Purchase? [2021]

Straw purchase. Two words that to those who know what it means conjures up images of felony charges, criminal activity, and possibly a bunch of annoying ATF auditors all up in your books. But not everyone knows what a straw purchase is, what it means, and how to deal with it.

So what is a straw purchase? Simply put, a straw purchase is when one person buys a gun for another person who is not allowed to own a gun. It is a way for a person who is not prohibited from owning a gun to get a gun to somebody who is.

Straw purchases are a common way for felons, gang members and criminals to get guns. However, there are exceptions to what constitutes a straw purchase.  For instance, you can legally buy a gun with the intent to gift it to a non prohibited person. That isn’t a straw purchase. A straw purchase would involve either a prohibited person or an exchange of money. But let’s look a little closer at what is a straw purchase, and how you can spot them.

Just What is a Straw Purchase?

The ATF defines a straw purchase as “Buying a gun for someone who is prohibited by law from possessing one or for someone who does not want his or her name associated with the transaction is a “straw purchase.”

That means not only is buying a gun for a prohibited person a straw purchase, but so is buying one for that friend or family member who thinks a 4473 is “registration” and “doesn’t want the government to know that they bought a gun.”

In other words, if the purchase is for the purpose of deliberately avoiding filling out a 4473, then it is a straw purchase. But there is one notable and perfectly legal exception…

When a Straw Purchase Isn’t…

The ATF has a single exemption that allows buying a gun for another person, and that is when it is a bona fide, actual gift.

If the gun is purchased with the buyer’s own money, and given to another person is not a prohibited person without an exchange of money, goods, services or other tangible items or things of value, then it is a real gift.

Some states require background checks on private party transactions, so in those states, this is moot, as it requires the final recipient of the gun to do the background check.

The Dangers of Straw Purchases

The ATF and firearms industry have a vested interest in minimizing straw purchases. They are one of the most common ways for prohibited persons to acquire a guns, and very difficult to track and prevent.  In conjunction with the National Shooting Sports Foundation, the ATF maintains a website devoted to promoting best practices to reduce straw purchasing.

Using the motto “Don’t’ lie for the other guy” this website describes common strategies of straw purchasers as well as advice on how to identify potential straw purchasers and the legal penalties for straw purchases.

Guns acquired through straw purchases have shown up in the hands of Mexican drug cartels, gangs across the nation, and with various prohibited persons committing violent crimes. For that reason reducing straw purchases are one of the most important things an FFL holder can do.

But what can you do, since it’s pretty hard to know if somebody is lying on a 4473?

How to Limit and Prevent Straw Purchases

It is a sad fact that it’s pretty much impossible to prevent ALL straw purchases. After all, if the buyer claims they are the actual buyer and the ATF approves the background check, the system has worked as it should.

But there are tricks you can use to spot potential straw purchases. Remember, as an FFL holder, you are not obligated to conduct any transaction you don’t feel comfortable with. Some common red flags for straw purchases include:

• One person coming in with another and telling them what gun to buy and then handing them the money for the transaction. Or simply telling them what gun to buy. As cliché as it is, this is often a man using an intimate partner to purchase a gun for his own use.
• Multiple purchases of the same or similar gun. It’s not terribly unusual to buy several guns at once, especially for collectors, or if there are good sales, or somebody has received a windfall of cash. We all have the fantasy of walking into a gun shop and buying everything we’ve always wanted all at once, and that does happen. It is pretty unusual to buy multiples of the same or nearly same gun though. Treat such transactions with great care, especially if you are near an area of high crime activity or the southern border.
• Multiple individual purchases over a few short days. This is where it pays to know your customers. Shops that deal in used or unusual guns and have well known customers  who may collect certain types of guns might see multiple sales to the same person in a short time if their inventory has enough turnaround. Again, this might be common with collectors. But it should raise an alarm with people who aren’t regulars, or who again, buy multiples of similar guns. Odds are a gang isn’t arming up with .22’s, but three or four pump action shotguns to the same person in a short time is suspicious.

Some great examples of straw purchases can be found here and here, which really drive home the point of both how obvious some are, and how subtle others can be.

If you spot what you think is a straw purchase, you are perfectly within your right to decline the transaction. If there are obvious red flags, it’s better to risk the sale, than risk the gun going to a prohibited person. Because you almost can never prove a straw purchase is going down, there is little reason to involve law enforcement, as it becomes a case of he said/they said with no real proof on either end. Just decline the transaction and focus on legitimate customers.

Dealing With Gifts

Many people buying a gun as a gift will be unsure of the process. They may know it is possible, or they may not even know if it is, and will ask. And of course those who already know how the process works won’t say a thing. Still, if you think somebody is buying a gun as a gift, there are steps you can take to ensure the gun winds up in legal hands.

Suggest a gift card or certificate instead, and for the recipient of the gift to come down and select the gun they want instead. Many people will see this as reasonable, and you have the chance to sell ammo and accessories to the end user that the gift giver might not have chosen to buy.

You can also offer to put the gun on “hold” with a full or partial payment pending the person receiving the gift coming in and doing the paperwork themselves.

In either case, you might increase the likelihood of the actual recipient coming in to do the background check. Of course these approaches must be used with caution. Many people want the physical item to gift, and if they are giving it to a spouse or close friend may take offense at the idea of having them come down to the store on a legitimate, and legal gift. In the end, you have to follow your gut instinct.

Conclusion

Straw purchases are the bane of every firearms retailer. They can be easy to spot or extremely difficult to identify. At their most innocent, they are used to obfuscate the sale of a gun to another otherwise legal person who is paranoid about government paperwork (but still an illegal sale) and at their worst, they serve to funnel guns to criminal gangs and cartels.

Guns acquired through straw purchases have been used in horrific crimes and then used to promote wild and oppressive gun control schemes like bans, or even outright confiscation of popular modern sporting arms. Every straw purchase is potential fuel to the anti-gun fire, and of course one more gun in the hands of people who cannot legally have one.

For these reasons, it is important for FFL holders to exercise due diligence and industry best practices to combat straw purchases.  Along with the Don’t Like for the Other Guy campaign, many industry groups offer advise on fighting straw purchases.

FFL123 customers have another resource they can tap for knowledge as well. All FFL123 customers get ongoing, personalized support for as long as they are in business. Our team of industry insiders, legal experts and FFL experts are here to provide you with the latest news, industry best practices, and other crucial information and knowledge that you need to stay on top of the complicated and every changing world of firearms laws.

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