Let’s say you’ve got some extra guns when what you really need is some extra cash. And you might need that money for something every bit as important as guns, like chemotherapy to treat your cancer. You might be tempted to take them to a local gun shop to sell them on consignment. Do not ever do this. And not because ‘you should never ever ever sell a gun’ like some guys believe . . .

From katu.com

VANCOUVER, Wash. – A Vancouver man battling cancer made a tough decision to sell part of his gun collection to help pay bills.

Now, Andrew Hammond is without either. He took eight of his 10 guns to C&C Consignment in Vancouver in hopes of making $2,000 through consignment sale, which gives you the money after your items are sold in store.

On Friday, Hammond returned to the store to collect the money after hearing his guns had been sold. But C&C was locked.

Hammond said he needed that money to help pay bills after undergoing years of cancer treatment. He estimated he could pay for a month of medical expenses with the money.

“I went through some pretty tough chemo,” he said.

The guns that he gave to C&C were family heirlooms – gifts from his father, who had just passed away. His father and grandfather owned the gun collection, which had been passed down in the family for more than 100 years.

For Hammond, losing both his guns and money is an emotional as well as financial drain.

“They’ve managed to just really depress me,” he said. “Take some wind out of my sails.”

We stopped by C&C on Monday afternoon and found a crew hauling away boxes from the store. The person at the store declined comment.

The store gave us a flier that stated that although C&C is closing, they have “every intention of settling all accounts with customers.”

“We have been working on a loan, which has been approved and we are now awaiting final funding of the loan,” the flier read.

First of all, unless you’re selling rusty single-shot shotguns, selling eight guns for only $2000 is a terrible exercise in ‘buy high, sell low’ economics. Second, a seller has no legal recourse when a consignment shop or pawnbroker goes under. Mr. Hammond is, in legal terms, ‘shit out of luck.’

When you take a gun to a retailer to sell it on consignment it becomes part of their inventory. Businesses have creditors, and creditors like to have collateral before they lend money to small businesses with extravagantly high failure rates like specialty retail stores. Before 1st Multinational Savings Bank will lend Joe FFL a dime, they will require him to grant them a security interest in all of his inventory, whether existing at the time of the loan or acquired after the loan is funded.

Your guns become Joe FFL’s inventory, and then they become 1st Multinational’s collateral for Joe’s debt. When Joe becomes insolvent and declares bankruptcy, 1st Multinational claims their security interest in Joe’s inventory. They get clean title to your guns, Joe leaves town in the dead of night, and you’re left in possession of a worthless consignment receipt and an unsecured debt which you have no chance of collecting.

Don’t ever consign your guns. If you can wait for a good price, sell them online to the highest bidder (and run the transfer through an FFL to cover your ass). If you must sell quickly (because, say, you need money to pay for chemotherapy) you won’t get a good selling price. You might only make fifty cents on the dollar, but it’s better to lose 50% of your proceeds than 100% of your guns with nothing to show for it.

I was personally familiar with C&C Consignment and they had a terrible reputation among local shooters. They were unfriendly, overpriced and uninformed. I personally heard them giving completely reckless advice to first-time gun buyers. C&C Consignment were despicable clowns and I’m delighted they’re gone, but bankruptcy doesn’t just happen to ‘bad’ gun stores like them. It can happen to any gun store.

The same thing that happened to Andrew Hammond happened to a good friend of mine fifteen years ago. He placed several rifles on consignment, including a Remington-contract Mosin-Nagant made for the Tsar’s armies, before they stopped being the Tsar’s armies. He took them to a gun store that had been in business for decades, and he lost every single one.

Now you know.

59 Responses to Pro Tip: Never Sell Guns On Consignment

  1. I don’t sell anything on consignment, guns or not, and I don’t do car trade-ins. A little bit of effort and you can double your money in many cases over consignment and trade-in.

    • you hit the nail squarely on the head. never consign or trade-in. your just severly comprimising the value
      of the item. basically its a sign that says, “please take advantage of me”.

  2. But, wait… I thought Canada had universal health care? Free medical care for everyone… right?

  3. §9-114 of the Uniform Commercial Code covers this (the section number and text may be different in different states). If a consignor (the owner) complies with §9-114 to the letter, the consignor’s interest will be superior to the interest of the bank or lender. However, compliance is virtually impossible.

    The bottom line is that consigned guns are at risk and there’s not much that the owner can do about it, except not to consign the guns in the first place.

    • I just read over that, and yeah, compliance looks like a PITA.

      Also, even if you were in compliance, I assume you’d have to prove that through litigation, which might take more money than the consigned items are worth.

      • It would be easy to prove compliance. The UCC filings are public record, copies of the notifications can be retained along with receipts for registered letters. That’s the easy part. Doing all of the necessary crap in a timely manner, not so much.

    • Yeah, I was going to point out there is a UCC procedure that covers this, but most individuals aren’t going to be aware of it or of how to comply.

    • This is not an Article 9 consignment. The Art. 9 definition of consignment expressly excludes goods that were “consumer goods” prior to their delivery from the owner to the merchant. These were consumer goods, so Art. 9 does not apply. Consequently, we fall back to the common law, under which this guy has priority over the guns.

      This is still a pain in the ass because he may need to bring some sort of action to recover possession from the creditors, like a replevin action.

      • UCC 9-105: (h) “Goods” includes all things which are movable at the time the security interest attaches or which are fixtures (Section 9-313), but does not include money, documents, instruments, accounts, chattel paper, general intangibles, or minerals or the like (including oil and gas) before extraction. “Goods” also includes standing timber which is to be cut and removed under a conveyance or contract for sale, the unborn young of animals, and growing crops;

        What am I missing? I’m not busting your agates — I haven’t handled a secured transaction in a while. Some states do vary definitions (NY used to exclude “fixtures” from the definition of goods for most purposes), so your local code may vary.

        • Art 9 and its priority battles apply to “Consignments.” And if this were a true consignment, he would be screwed unless he perfected his rights as you described. However, a “consignment” under Art 9 is limited in scope.

          From the definitions section:
          9-102(2)(a)(20) “Consignment” means a transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale and:
          (A) the merchant:
          (i) deals in goods of that kind under a name other than the name of the person making delivery;
          (ii) is not an auctioneer; and
          (iii) is not generally known by its creditors to be substantially engaged in selling the goods of others;
          (B) with respect to each delivery, the aggregate value of the goods is $1,000 or more at the time of delivery;
          (C) ******the goods are not consumer goods immediately before delivery*****; and
          (D) the transaction does not create a security interest that secures an obligation.

          9-102(a)(23) “Consumer goods” means goods that are used or bought for use primarily for personal, family, or household purposes.

          Thus, because the firearms were for personal use (an assumption on my part), they were consumer goods. As consumer goods, his consignment (in the colloquial sense) was not a “consignment” (in the Art. 9 sense). Traditional common law thus applies, and he should be able to get them back.

          Too bad a lawyer would cost him more than the $1,000 he wants for his guns.

        • 9-102(a)(20)(A)(iii) may also give him cover, given that the company’s name was C&C Consignment.

  4. Thank you for these great advise. When you’re desperately in need of money you can make some foolish decisions. Hopefully this advise will save someone a bit of grief. It’s also good to hear this company went out of business. BTW: with all the record sales in the firearm industry over the past year how can you possibly run a company into the ground like this? On top of being unfriendly, overpriced, and uninformed they must have also been extremely incompetent.

  5. Thinking back over all the stuff I’ve sold and traded away over the past 50+ years I wish I had all of it back.

  6. The plural of anecdote is not data. This one story does not in any way constitute an argument against selling on consignment.

    • Amen.

      Mr. Cancer should have picked his consignor more carefully. Foolish decisions have consequences.

      There are plenty of folks who sell items via consignment on a regular basis without any problems. In fact, I sold a slew of PMags, ammo, and black guns back in January without any issues.

      John

      • I see both sides. I’ve sold two .454 Revolvers in order to purchase my .460 Smith. They were consigned through Turner’s Outdoorsman. I got the gun I wanted, and so did two other people.

        Looking back, I regret selling my beautiful .454 Ruger, but not the Taurus .454. I also regret selling a Marlin 336 and Winchester 12 gauge pump.

        Consignment can work, but I would say that it is vastly inferior to GunBroker and some of the other places previously mentioned.

    • I sell on consignment via a trusted LGS frequently. The 15% commission is worth the hassle of not having to deal with potential buyers. This shop going out of business and not returning the firearms are two unlikely events. Talk about a solution in search of a problem.

  7. Also note under the proposed ‘universal background check’ in the Senate you would have to undergo a new background check before getting your firearms BACK from consignment if they did not sell (also to get back from being pawned).

  8. I can relate to this. I had a similar experience but from a completely different perspective. As a young private E-3 back in the late ’80s I was in the process of purchasing a cheap semi-auto rifle that was affordable both to buy and to feed, an SKS. The gun store where I lived sold guns on a payment plan and I went in and made a payment every two weeks. They had been in business for decades and were well know in the community. Unfortunately the old man passed on his business to his son, and his son was not cut from the same cloth.

    I had just got paid on a Friday and was going to make my final payment but had a rather grueling day and so I decided to go the following morning (Saturday). Wrong decision on my part! I should have listened to my instincts which were telling me to go that very evening. Unbeknownst to me the son had started selling drugs out of the back of the gun store. The cops raided the shop that Friday night and everything in the store was seized under recently passed CA drug asset forfeiture laws.

    I never got my SKS nor any of my money back. Just one more of many reasons not to operate on any sort of a consignment basis regarding guns.

  9. Cosignment is on the whole, a bad deal compared to doing your own legwork but if you deal with an FFL you know and trust who sells your stuff alongside his own for the same price he would sell it for then its doable. I don’t have a gunsamerica account or care to. My dealer does and he’s sold a couple of guns for what I asked for and took 10%. He took the pics, posted em, cleaned the guns up and sold them.

    I would wager agencies based around it are bad. But the guns he wasn’t able to sell he gave back no questions. I think its less whether you cosign but who you buy and sell from. Everyone isn’t as honest.

  10. This really stinks. The poor man. He’s already struggling with cancer and costly bills and then he gets stabbed in the back by the consignment shop.

  11. I feel so sorry for this man. I contracted kidney cancer early last year, and missed 7 months of work. Luckily I had fairly substantial savings, but after a few months without a paycheck I was starting to feel the pinch. I sold a small portion of my collection on Gunbroker for about $5K which helped tide me over until I was able to go back to work in September.

  12. I’ve sold a few guns on consignment and was satisfied with the transaction. This was at a LGS in business for 60 years with a large number of regular customers. They moved then guns in a month and I think I got about the same out of them as if I sold them myself with the hassles.

  13. This is a bad deal for the man but I don’t see the wisdom in condemning all gun consignment sales because of one incident. I have consigned a few over the years as an example a skeet shotgun I consigned at a clay pro shop and it sold much quicker than I could have on my own.

  14. I visited that store twice about 3 years apart. The first time, the guy was friendly but not extremely knowledgeable. The second time I walk in and say I am looking for this and this; he responds by saying why both guns are horrible and they don’t carry them. I did not even respond, I just turned around and walked out. Another local store got my money, and has continued to satisfy.

  15. The head of the NRA should donate part of his almost $1,000,000 a year salary to a gun owner in need. He make almost $20,000 a week. So, $2000 is only 10%. So, he can fly regular class instead of 1st Class and give this guy some money.

  16. What. Never use consignment? Really?

    The problem is C&C not consigning a firearm. I have been very happy with the consignment guns I have sold. Every single time I have sold a gun the consignment store has given me their estimate of how much the gun would sell for, but they will put any price on the gun I want (even if overpriced). Then they detail what their percentage is for the transaction and if there is any “negotiation room” on the price. There are no surprises on either side, and this is how it has been handled every time I have consigned a gun.

    While I feel sorry for Mr. Hammon’s loss, it sounds like he handed them a pile of guns and hoped it would work out. From the details of the article he did not set the price for each gun or set negotiation amount. Compounding the fact that he chose his vendor badly.

    Why consign rather than “do the legwork”? First off I don’t have a lot of free time to deal with filling out classified ads and scheduling inspections of the guns I am selling. Also, I don’t want strangers coming into my house and seeing my gun safe setup. On the other hand, the gun store I use (Gretta’s Guns in Simi Valley, CA) has a excellent website for potential buyers and a lot of foot traffic, so I feel they move the guns faster and sell them for more that I could (pre gun ban panic). I don’t have to deal with lowballers, looky-loos and general riff raff. They cover the FFL transfer with no hassle to me. I get a call after the gun sells that they have a check for me. The split is 70% of the sale price to me and the store keeps 30%. For the convenience, I am happy to give them 30% of the sale.

    Why not sell to a gun store? Most of my local gun stores (Los Angeles) only give 50% of the appraised value on a sale.

    I feel the title of the article is flat out wrong and the advice I feel is misguided. There is nothing wrong with consigning a firearm, just choose a reputable vendor.

    My $.02

  17. This article is B.S. FLAME DELETED

    Most of the people who loose items they have consigned never make an attempt to get them back. Just because a FFL records your firearm in its log book, doesn’t make it their property. Should folks never take their firearms to gunsmiths either?

    Possession is not 9/10ths of the law.

  18. I’m torn on this one. One of my best buys ever was a Colt Combat Elite with less than 200 rounds through it for $575. Of course the shop has been a fixture in Glendale for decades and the fella got his money so all’s well that ends well I guess.

  19. it’s not just guns. a company that sold motorcycles on a similar system short changed folks for years before disappearing with a small warehouse full of motorcycles and a lot of customers’ money.

    Pawn shops and the like have a reputation for sleaziness for a reason. Not everything negative is an “unfair” depiction or prejudice. Often, it is deserved…”where there’s smoke, there’s fire”, etc.

  20. He could have got a $2000 loan but you have a very specific time to pay it back say 90 days, after which they own your stuff and no chance for you to get back. I watched a guy on Pawn Stars do it for $20000, much less than the item he put up was worth, but he was sure he’d be back in time to pay it off and he really needed the cash now…pawn shops tend to be the sleaziest characters.

  21. Another thing not mentioned is the fact that I would NEVER want anything back I sent out for consignment. I’m 100% sure people don’t treat things as well as I would. I buy everything new and never loan anything out. That applies to cars, motorcycles, guns, etc.

  22. I inherited about 45 guns. I dont know the first thing about them. I am located just outside Minneapolis MN, who should I approach to attempt to sell these guns and get the best market value?

  23. There can be a huge difference if you have rare or antique guns. If you give them to a place like http://www.rockislandauction.com. That is all they do and have a large customer base, and most likely have someone looking for the gun you want to sell. Sure you got to pay a percentage commission. But if they get you a few extra bids more than you could have got selling as an online classified it is worth it. Plus you do not have to mess with shipping, FFL’s, any legal issues that can come up from different states.
    And everybody knows when you are selling anything you need good photos, detailed descriptions or you will not get the most money. The big auction houses do that and put out a paper catalog too.
    Don’t get me wrong, you can do this but its a lot of work, especially if you have 10+ guns. Like I said rare guns and antique, anyone can sell a Glock 17. But you might miss out on real money if you have something old and in good condition. They just emailed out the process of how they sell guns: https://www.rockislandauction.com/blog/how-riac-sells-your-guns/

  24. I sell guns on consignment occasionally because I don’t want to deal with the hassle of selling them online and if I sell through local listings, I will have to travel somewhere and go to some FFL and do a transfer there…for the time I will have to spend, I’ll make more money billing clients than I would lose on consignment.

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