Our question today in regard to firearms is essentially, “Is an ‘onsite auction’ a consignment auction?” We continue to hold it is clearly not.
Just what does “consignment” mean? The concept of “consignment” is the act of consigning — the act of giving over to another person or agent’s charge, custody or care any material or goods but retaining legal ownership until the material or goods are sold.
United States Code 18 § 923(a) & ATF Rul. 96-2 states that [an] “auctioneers’ association stated that their members generally conduct two types of auctions: estate-type auctions and consignment[-type] auctions.” Here is that rule in total: https://www.atf.gov/file/55456/download.
Consignment-type auctions per ATF Rul. 96-2 (General guide for auctioneers selling firearms) appear to agree with our above definition and are described as follows:
The association states that, in consignment-type auctions, an auctioneer may take possession of firearms in advance of the auction. The firearms are inventoried, evaluated, and tagged for identification. The firearms belong to individuals or businesses who have entered into a consignment agreement with the auctioneer giving the auctioneer authority to sell the firearms. The agreement states that the auctioneer has the exclusive right to sell the items listed on the contract at a location, time, and date to be selected by the auctioneer. The agreement also provides for the payment of a commission by the owner to the auctioneer. The consignment-type auctions generally involve accepting firearms for auction from more than one owner. Also, these auctions are held on a regular basis, for example, every 1-2 months.
Any reasonable interpretation of the above would conclude that this is describing the auctioneer taking possession and control of the firearms, selling such at a time and place selected by the auctioneer, typically for more than one owner, and often on a regular basis.
Does this sound like a “single-seller onsite auction” where the owner maintains possession and control and the firearms are sold onsite? Doesn’t to me either. Since there are only two types of auctions per the association (and now the ATF) then what is this “single-seller onsite auction?” It’s an “estate-type” auction.
We would submit that the ATF does indeed imply that an “estate-type” circumstance includes someone that is downsizing, moving, retiring, settling an estate, guardianship, conservatorship or any other like situation where the firearms are being sold onsite, at a location chosen by the seller (owner) … with only one seller and not on a regular basis.
The foundation for this easy conclusion is that the ATF also implies that a “consignment-type” circumstance includes the auctioneer taking possession and control of the firearms, selling such at a time and place selected by the auctioneer, typically for more than one owner, and often on a regular basis.
In other words, if it’s not a “consignment-type” auction, then it must be an “estate-type” auction. We would also note of the qualifier “-type” signaling a category of things having common characteristics. If the association or the ATF meant only estates, why use the qualifier “-type?”
Therefore — and of course, generally speaking — if you as an auctioneer are conducting an estate-type auction with firearms, you don’t need to be licensed as a Federal Firearms Licensee. If however, you are conducting a consignment-type auction, you need to be licensed as a Federal Firearms Licensee.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.