South Dakota just became the 19th state to prohibit the use of Merchant Category Code 5723 to track customer transactions in the state. There are another six or seven states that would probably enact their own prohibitions if they thought there was a pending need.
This whole mess got started when Priscilla Sims Brown, apparently having nothing better to do, began lobbying the the International Organization for Standardization (ISO) to approve a new Merchant Category Code (MCC) specifically for gun dealers. Sims Brown was, and still is, the CEO of Amalgamated Bank, a WOKE financial institution in New York.
The ISO created the new code, 5723, in September 2022 and it became effective on July 1, 2024. Previously, gun dealers had been lumped in with other categories of merchants, such as sporting goods or even general merchandise retailers.
The idea was ostensibly to allow credit card issuers to look for suspicious purchases, such as buying multiple guns in a single transaction or multiple transactions in a short time. Those suspicious transfers could then be reported to law enforcement agencies for investigation. This is basically how money launderers are identified.
We’re not sure how anyone could define what constitutes a “suspicious” transactions; there were never any parameters set. Banks have the expertise and experience to know if there’s some irregularity in financial dealings but they don’t know all that much about guns, gun owners, or gun buyers.
To be honest, it’s far more likely there was an ulterior motive: if only to make gun owners paranoid by tracking their credit card transactions and never saying what might be considered shady.
Senator Elizabeth Warren was a supporter of Sims Brown’s plan. When the ISO approved the new code, she, along with other Democrats, said they would be able to prevent mass shootings and reduce “gun violence.”
But there was a fly in the ointment. Actually, there were so many flies, there was no room for ointment,
The biggest fly revealed itself a few days after the news came out about MCC 5723. The big credit card companies, like Visa and MasterCard, pointed out there wasn’t enough information involved in approving a credit card transaction to know what kind of merchandise was being purchased. After all, it’s easy to spend hundreds of dollars in a gun shop and still leave without a new firearm.
Another big fly is the fact some of the largest firearm retailers in America aren’t included in the new code. Bass Pro Shops and Cabela’s are classed as sporting goods retailers; The MCC for pawn shops is 5933. Walmart has multiple codes, the most common being 5310 for discount stores. Only dedicated gun shops are in the 5723 class. This means that a large percentage of gun sales won’t even show up. Several mass shooters got guns from sporting goods stores and pawn shops.
They’re called Merchant Category Codes because they are used to identify the type of merchant, not the type of merchandise.
I have no problem accepting Elizabeth Warren doesn’t know jack about this. The same goes for a lot of Democratic politicians.
What I do have some trouble with is accepting is the CEO of a bank that offers credit cards not knowing this*. True, her professional background was in finance, investments, and insurance, not banking, but when she came up with the idea of persuading the ISO to create a new gun dealer-specific code, she must have talked to somebody that knows how the transaction approval system works.
Wonder if she realized states have the power to regulate financial institutions operate in those states. – and know some things about credit card processing she apparently doesn’t. Now, less than a year after her MCC became effective, she’s had 19 lessons.
If you don’t live in one of the 19 states, don’t worry. Just mix up your purchases or buy all your guns from places like Bass Pro Shops or Cabela’s or a pawn shop and laugh at the gun-grabbers who have screwed up again.
*Amalgamated Bank offers credit cards but the cards themselves are issued by First National Bank of Omaha.
