A customer walks in with a deer rifle he wants you to sell. You agree on a price, shake hands, and put it in the case. From that moment, that rifle is your problem on paper. Not the owner's. Yours. The license that gets cited if the bound book is wrong is the one on your wall.
Consignment trips up shops because it feels like a favor, not a transaction. It isn't. The instant you take possession of a firearm to sell it, you have an acquisition to record, a disposition clock running, and a transfer to run by the book when it sells. Treat it casually and you stack two findings on one gun: a late acquisition entry and an open disposition.
The gun is an acquisition the day you take it
When a non-licensee leaves a firearm with you to sell on their behalf, you have received it into inventory. That is an acquisition under 27 CFR § § 478.121–478.125, and it goes in the bound book like any other gun that comes through the door: manufacturer or importer, model, serial, type, caliber, and the date and source of acquisition. The source is the consignor, the customer who owns it.
Do not wait until it sells to log it. Do not log it the day it sells and backdate the acquisition to make the dates tidy. An IOI pulling a sample is looking at exactly this: a serialized firearm in your case or your safe that has no matching acquisition entry. A gun you can physically produce with no bound-book line behind it is one of the cleaner findings an inspector can write.
Get the consignor's identifying information on a written consignment agreement and keep it with your records. You will need it to populate the acquisition entry accurately, and you will want it if a question ever comes back on that serial number.
When it sells, it is a regular transfer
Here is the part shops talk themselves out of. When the consigned gun sells to a retail buyer, the disposition is from you to the buyer, not from the original owner to the buyer. You possess the firearm. You are the seller of record. That means a full Form 4473 (ATF Form 5300.9), a NICS check under 18 U.S.C. § 922(t), and a disposition entry in your bound book.
The buyer never deals directly with the consignor for the transfer. The gun moves through you, your 4473, and your check. The fact that someone else owns the underlying value of the gun changes nothing about the paperwork. The transfer requirements at 27 CFR § § 478.124–478.129 apply in full.
And the disposition clock applies. Record the disposition not later than seven days following the date of the transaction (27 CFR § 478.125(e)). That window does not pause because you are still settling up with the consignor or waiting on a check to clear. The transaction is the transfer to the buyer. Log it on time.
Returning it unsold is also a disposition
Consignment guns do not always sell. When the owner comes back for an unsold firearm, you are disposing of it back to them. That is a disposition entry too. But returning a firearm to a non-licensee is still a transfer, and it triggers the same questions you would ask on any over-the-counter sale.
- The consignor must be a resident of your state for an over-the-counter return, and the usual residency and eligibility rules apply.
- A handgun cannot simply be handed back to an out-of-state owner over the counter; the interstate handgun rule at 18 U.S.C. § 922(b)(3) routes a handgun to a non-licensee FFL-to-FFL into the buyer's state of residence, and returning consigned property does not get a free pass.
- Run the return the way your compliance program runs any transfer to a non-licensee, including a 4473 and NICS where required. When in doubt on a specific return scenario, confirm against current ATF guidance.
The common error is logging the acquisition when the gun comes in, then never closing the loop when it goes back out the door unsold. That leaves an open disposition on a gun that is no longer in your possession, which is the exact gap an inspector flags.
Why this is a training problem, not a memory problem
Consignment is irregular. A shop might take in two a month. That is precisely why staff forget the steps: it is not the muscle memory of a Saturday gun sale. The counter person who runs forty 4473s a week can still fumble the one consigned rifle because the intake half of the transaction feels like paperwork they can do later.
The fix is the same fix for every predictable finding: train the workflow as a workflow, then prove the training happened. The intake entry, the consignment agreement, the disposition on sale or on return, and the seven-day clock are all covered in Bound Book Management, and the transfer side lives in 4473 Completion & Recordkeeping. Both stack toward Counter Certified for your sales floor.
"We told the new hire how consignments work" is not a defense in an exit interview. A dated certificate showing that the person behind the counter trained on acquisition and disposition recording is documentation your carrier can audit and credit at renewal. DealerReady's review of FFL claims shows the large majority trace back to documented counter and recordkeeping errors, and a misfiled consignment gun is one of them.
None of this is legal advice, and it does not replace the current ATF forms, instructions, and rulings. Confirm the specifics for your situation, and bring in counsel where the stakes warrant it.
If you want your whole staff trained on the bound book and able to prove it, see shop plans and pricing or browse the course catalog.