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  #1  
Old 10-26-2018, 4:35 PM
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Default Documentation Saying Consignment is Roster Exempt?

I've read several times on here that consignment handgun sales are roster-exempt, but I've never seen anyone quote a regulation to that effect. The only think I can find on the DOJ website is it saying consignment "returns" are exempt. I just took over as manager of a the gun department of a hunting/fishing store and I've run into my first consignment off-roster handgun. Could someone please point me in the direction of the regulation so I can put it in out policy and procedure manual? My google-fu has failed me today.

Thanks in advance for your help.
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Old 10-26-2018, 4:39 PM
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It’s a private party sale. Therefore, exempt
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Old 10-26-2018, 4:39 PM
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California Code of Regulations, title 11, section 4070.

Roster of Handguns Certified for Sale
As of January 1, 2001, no handgun may be manufactured within California, imported into California for sale, lent, given, kept for sale, or offered/exposed for sale unless that handgun model has passed firing, safety, and drop tests and is certified for sale in California by the Department of Justice. Private party transfers, curio/relic handguns, certain single-action revolvers, and pawn/consignment returns are exempt from this requirement.
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Old 10-26-2018, 5:48 PM
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It has to be transferred as a CA PPT, which means you need to get the seller to fill out a DROS worksheet, along with everything else.
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Old 10-27-2018, 1:53 PM
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Originally Posted by kemasa View Post
It has to be transferred as a CA PPT, which means you need to get the seller to fill out a DROS worksheet, along with everything else.
10-4. We don't do our consignments as PPTs we do them through the Consignment option in DES, so I believe we would not be able to sell off-roster guns like we would with a PPT. Thanks for the explanation.
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Old 10-27-2018, 1:55 PM
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California Code of Regulations, title 11, section 4070.

Roster of Handguns Certified for Sale
As of January 1, 2001, no handgun may be manufactured within California, imported into California for sale, lent, given, kept for sale, or offered/exposed for sale unless that handgun model has passed firing, safety, and drop tests and is certified for sale in California by the Department of Justice. Private party transfers, curio/relic handguns, certain single-action revolvers, and pawn/consignment returns are exempt from this requirement.
Yes, this is the passage I've found as well but it only refers to "consignment returns" as been exempt, meaning, someone who put a gun on consignment but wants it back would be exempt. Not the sale itself, at least it doesn't appear that way unless you are processing the "consignment" as a PPT.
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Old 10-27-2018, 2:00 PM
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Quote:
Originally Posted by omgwtfbbq View Post
10-4. We don't do our consignments as PPTs we do them through the Consignment option in DES, so I believe we would not be able to sell off-roster guns like we would with a PPT. Thanks for the explanation.
Huh? There is only consignment REDEMPTION (return) in the DES, which doesn't apply to when you are selling it to someone. You are supposed to do consignments as a CA PPT, talk to your CA DOJ Inspector.

The DROS options are:

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Handgun Transactions

Dealer Handgun Sale
Private Party Handgun Transfer
Peace Officer Non-Roster Handgun Sale
Exempt Handgun Sale
Pawn/Consignment Handgun Redemption
Curio/Relic Handgun Sale
Olympic Pistol Sale
Handgun Loan

Long Gun Transactions

Dealer Long Gun Sale
Private Party Long Gun Transfer
Pawn/Consignment Long Gun Redemption
Curio/Relic Long Gun Sale
Long Gun Loan
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Old 10-27-2018, 2:45 PM
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Originally Posted by omgwtfbbq View Post
10-4. We don't do our consignments as PPTs we do them through the Consignment option in DES, so I believe we would not be able to sell off-roster guns like we would with a PPT. Thanks for the explanation.
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Originally Posted by kemasa View Post
Huh? There is only consignment REDEMPTION (return) in the DES, which doesn't apply to when you are selling it to someone. You are supposed to do consignments as a CA PPT, talk to your CA DOJ Inspector.

The DROS options are:
UH, what Kemasa said.
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Old 10-27-2018, 7:57 PM
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UH, what Kemasa said.
Things that make you go, huh?
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Old 10-27-2018, 7:59 PM
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I’m sure that this opens a whole different can of worms for the OP. I wouldn’t be happy if I were a consignor and the FFL didn’t process this as a PPT. Good luck with this one.
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Old 10-28-2018, 7:57 AM
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Iím sure that this opens a whole different can of worms for the OP. I wouldnít be happy if I were a consignor and the FFL didnít process this as a PPT. Good luck with this one.
Uh, ya.

Basically this means he has been doing rostered guns as dealer sales which screws the buyer on 1 in 30, non rostered as exempt handgun (same 30 day issue). And none of the transactions are being recorded properly, including succession of ownership and the firearms being still being owned by the seller but not? And, possessed by the store?
This also brings up potential issues of dealer sales of non roster guns?
Not even addressing DOJ audit issues.

Last edited by taperxz; 10-28-2018 at 8:10 AM..
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Old 10-28-2018, 8:08 AM
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Originally Posted by kemasa View Post
It has to be transferred as a CA PPT, which means you need to get the seller to fill out a DROS worksheet, along with everything else.
I think you mentioned that you donít or have not done consignments.

Just an FYI, when you acquire a consignment in the DES, that generated paperwork is all you need in lieu of the worksheet. Itís all automated. Non the less, the sale is still DROSED as a PPT. (No DROS worksheet needed)
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Old 10-28-2018, 9:30 AM
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Originally Posted by taperxz View Post
Uh, ya.

Basically this means he has been doing rostered guns as dealer sales which screws the buyer on 1 in 30, non rostered as exempt handgun (same 30 day issue).

I don't think it screws the buyer on the 1 in 30 since consignment returns are 1 in 30 exempt. Just like pawn redemptions. The only way it would be an issue is if the auditor actually checks your DES acquisitions to see if these "consignment returns" Actually went back to person who placed them on consignment.




Quote:
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And none of the transactions are being recorded properly, including succession of ownership and the firearms being still being owned by the seller but not?
This is an obvious one here. They were not processed properly and would bring up issues in the audit process. I would imagine the AFS would show the seller still in possession of this firearm and then subsequently the new buyer in possession of the same firearm. But I am not very familiar with how the AFS processes these.

Quote:
Originally Posted by taperxz View Post
This also brings up potential issues of dealer sales of non roster guns?

Well at least the OP indicated he did not process these as non rostered firearms in his earlier post. But yeah, this would be a huge mistake.


Quote:
Originally Posted by taperxz View Post
Not even addressing DOJ audit issues.
That's going to be a huge issue. I know in our prior DOJ audits they were VERY interested in seeing the DES acquisitions to verify that in the case of pawn redemptions that we showed the firearm being acquired in the DES and returned to the SAME person that we acquired it from. In this case he's going to have problems because he's telling the DES that the consignment return transaction is going back to the person who put it on consignment when in fact that's not what he did. Good luck OP I'm not sure how you're going to rectify this one.
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Old 10-28-2018, 9:35 AM
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I don't think it screws the buyer on the 1 in 30 since consignment returns are 1 in 30 exempt. Just like pawn redemptions. The only way it would be an issue is if the auditor actually checks your DES acquisitions to see if these "consignment returns" Actually went back to person who placed them on consignment.
.
Right but the issue arises when the consignment gun is sold as a dealer sale and not a PPT to a buyer. At least thatís what I was getting at.
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Old 10-28-2018, 9:38 AM
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Right but the issue arises when the consignment gun is sold as a dealer sale and not a PPT to a buyer. At least thatís what I was getting at.
It sounds like he was DROSing them to the new buyer as a consignment return instead of a PPT. I don't think he ran them as a dealer sale. If he did there's a whole other issue.
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Old 10-28-2018, 10:00 AM
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It sounds like he was DROSing them to the new buyer as a consignment return instead of a PPT. I don't think he ran them as a dealer sale. If he did there's a whole other issue.
Ohhh, I didn’t pick up on that possibility because I didn’t think that was possible. (Using the return to a buyer) nor would I ever imagined exploring that possibility.

I’ve actually never had to return a consignment gun to the original owner. We sell them pretty quickly in our location.

Last edited by taperxz; 10-28-2018 at 10:02 AM..
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Old 10-28-2018, 10:09 AM
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10-4. We don't do our consignments as PPTs we do them through the Consignment option in DES, so I believe we would not be able to sell off-roster guns like we would with a PPT. Thanks for the explanation.
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Originally Posted by acespawnshop View Post
It sounds like he was DROSing them to the new buyer as a consignment return instead of a PPT. I don't think he ran them as a dealer sale. If he did there's a whole other issue.
What he said that I blacked and bold, is what lead me to believe he was selling consignment handguns using the “handgun dealer sale” option. It’s the only option that PREVENTS you from selling an off roster handgun.

Hopefully the OP can clarify

Last edited by taperxz; 10-28-2018 at 10:12 AM..
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Old 10-28-2018, 10:45 AM
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Yes, hopefully a little more info would help, plus maybe if we get the details we can provide ideas as to how he could go about correcting these mistakes.
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Old 10-28-2018, 10:45 AM
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Iíve actually never had to return a consignment gun to the original owner. We sell them pretty quickly in our location.
We have a couple times. People with odd stuff wanting too much money for it. We do use the same tab (pawn redemptions) ALL the time.
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Old 10-28-2018, 9:22 PM
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Quote:
Originally Posted by taperxz View Post
I think you mentioned that you don’t or have not done consignments.

Just an FYI, when you acquire a consignment in the DES, that generated paperwork is all you need in lieu of the worksheet. It’s all automated. Non the less, the sale is still DROSED as a PPT. (No DROS worksheet needed)
This is what we do at my work. We acquire the firearm through the DES consignment option, and also put it in our electronic bound book and inventory (we use Fastbound). When someone buys the firearm we process the DROS as through it were a gun from our inventory, using the appropriate "dealer sale" option in DES.

As I said in the OP, I was just recently (three weeks ago) hired as the sales manager for an FFL. The guy I replaced held most of the knowledge and it left with him.

We have been audited by the DOJ within the last 6 months and we passed with flying colors. To my knowledge we have not been filing consignment sales incorrectly in the past, but we've also haven't taken in an off-roster handgun on consignment....ever. We're a small, rural operation that deals almost entirely in long guns, particularly in the case of consignments. I'm simply trying to get my store's collective **** together for the future and get good, current P&P written for my employees. I want to make it clear, my question is not being posed wondering if our past actions were correct, but rather because I want my employees (and myself) to know what to do if we should encounter an off-roster handgun consignment, which again, has yet to happen (at least from what I can find in our records).

As to asking my DOJ rep, well, she doesn't answer her phone more than 50% of the time and doesn't return my calls. When she does answer, she's fairly rude and condescending. Not to mention, she doesn't do a very good job of explaining things.
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Old 10-29-2018, 8:06 AM
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This is what we do at my work. We acquire the firearm through the DES consignment option, and also put it in our electronic bound book and inventory (we use Fastbound). When someone buys the firearm we process the DROS as through it were a gun from our inventory, using the appropriate "dealer sale" option in DES.

As I said in the OP, I was just recently (three weeks ago) hired as the sales manager for an FFL. The guy I replaced held most of the knowledge and it left with him.

We have been audited by the DOJ within the last 6 months and we passed with flying colors. To my knowledge we have not been filing consignment sales incorrectly in the past, but we've also haven't taken in an off-roster handgun on consignment....ever. We're a small, rural operation that deals almost entirely in long guns, particularly in the case of consignments. I'm simply trying to get my store's collective **** together for the future and get good, current P&P written for my employees. I want to make it clear, my question is not being posed wondering if our past actions were correct, but rather because I want my employees (and myself) to know what to do if we should encounter an off-roster handgun consignment, which again, has yet to happen (at least from what I can find in our records).

As to asking my DOJ rep, well, she doesn't answer her phone more than 50% of the time and doesn't return my calls. When she does answer, she's fairly rude and condescending. Not to mention, she doesn't do a very good job of explaining things.
You are doing it wrong. Big time. You said the manager left? What about the FFL and CFD holder? The responsible party?

It seems you are an employee. Run, as fast as you can.

Last edited by taperxz; 10-29-2018 at 8:09 AM..
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Old 10-29-2018, 9:06 AM
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You are doing it wrong. Big time. You said the manager left? What about the FFL and CFD holder? The responsible party?

It seems you are an employee. Run, as fast as you can.
FFL/CFD holder acts as an owner/operator and is fairly hands-off from the day-to day business of the gun room outside of ordering and processing the occasional longgun DROS. He leaves much of the operations, procedures, and compliance up to the department manager. Hense, why I'm trying to get us into a good spot with the correct information.
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Old 10-29-2018, 10:44 AM
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BBQ, are you sure these are consignments and not 2nd-hand dealer transactions?

Just making sure. Some of the info given seems sort of like consignment and sort of like 2nd-hand transactions.
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Old 10-29-2018, 11:13 AM
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You are doing it wrong. Big time. You said the manager left? What about the FFL and CFD holder? The responsible party?

It seems you are an employee. Run, as fast as you can.
Also when you say "you're doing it wrong" are you meaning wrong as in not doing it so that a customer can be a non-roster-exempt person and buy an off-roster gun through the consignment process or do you mean illegal?

I'm less concerned with the former and much more concerned with the latter.
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Old 10-29-2018, 3:37 PM
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Also when you say "you're doing it wrong" are you meaning wrong as in not doing it so that a customer can be a non-roster-exempt person and buy an off-roster gun through the consignment process or do you mean illegal?

I'm less concerned with the former and much more concerned with the latter.
Both.

Itís not the stores inventory to begin with. As a consignment, you are selling the firearm for a customer of yours. Itís a person to person transfer.

If two people come in for a ppt, and you hold their gun for 240 hrs. Is it in your inventory? No!

A consignment is no different except for the fact that since your store is involved in the sale of their gun, you collect sales tax.
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Old 10-29-2018, 9:05 PM
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Both.

It’s not the stores inventory to begin with. As a consignment, you are selling the firearm for a customer of yours. It’s a person to person transfer.

If two people come in for a ppt, and you hold their gun for 240 hrs. Is it in your inventory? No!

A consignment is no different except for the fact that since your store is involved in the sale of their gun, you collect sales tax.
Except on consignment we're required by the DOJ to hold the gun for some time before we can release the firearm to a buyer so the doj can ensure the seller is the legal owner of the gun/the gun isn't stolen, during that time, the gun must be put in our bound book. Further, if a seller wants to take their firearm back from us, we have to DROS it back to them. Unless I grossly misunderstand the regs, the firearm is the property of the FFL until someone gets the firearm DROSed to them, either the seller or a buyer. So really it's not as similar to a PPT as you make it seem.

I understand that the practice my employer had been doing is incorrect, and while working today I wrote new procedure, and ran it through our site rep (who actually answered her phone today) that will clear up the issue.

I appreciate everyone's responses for bringing to light an issue I didn't even know was there. Now I can hopefully get the department moving in a better direction.
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Last edited by omgwtfbbq; 10-29-2018 at 9:11 PM..
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  #27  
Old 10-29-2018, 10:56 PM
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You have to hold the firearm for 30 days. So on day 21 put it for sale and it won’t leave until day 31 and you’re covered.

Yes guns must be in your bound book when you acquire them.

Yes if the seller wants their gun back you DROS it to them using the consignment return option

You’re reading too much into the whole ownership part. When you’re consigning it you’re the trustee of the property in question and fulfilling an agreement with the consignor to broker the deal on their behalf.

But you do process these still as a PPT. Thus they are roster exempt and 1-30 exempt however as mentioned tax is collected since the dealer has been involved in the sale of the property.
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Old 10-29-2018, 10:58 PM
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If you wish I can email you copies of our customer agreement forms and consignment contract we’ve used in the past if that helps you. Just PM me your email address if you want them.
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Or call 626-968-5900
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We are an NFA firearms dealer!

Follow us on Facebook @acesjewelryandloan Need Cash Fast? Get a loan on your firearms here!
Tons of new handguns! New Aero Receivers in stock soon!
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