NEW CPRC Report: Much less than 0.039% of guns sold by Federally Licensed Dealers stolen last year — a rate less than 1/30th the rate of theft for retail industry

24 Mar , 2016  

Gun sales

A new report from the BATF points out that Federally Licensed Gun Dealers had 6,163 firearms stolen from them in 2015.  With the Obama administration finalizing a new rule to enhance dealer reporting of stolen or lost firearms, this BATF report allows us to investigate the size of the current stolen or lost firearm problem for dealers and to compare those rates to other retail outlets.  Given that at the very least 16 million guns were sold in 2015, that is a rate of guns stolen of 0.039%. By comparison, according to the National Retail Federation/University of Florida National Retail Security Survey, in 2014 the rate of theft from retail stores generally is 1.15% (“shoplifting, worker and vendor theft or fraud”) — still 29.5 times higher than for gun stores.

Another study by Checkpoint Systems reporting on data for 2014-15 found a much higher rate of theft at retail stores for the United States of 1.97% — a rate 51 times higher than for gun stores.  The difference between the two surveys appears to be based on the membership of the two groups so the true rate of theft is something between 19 and 51 times higher in retail stores and gun stores.  However, in either case, the rates for retail stores generally is at least 29.5 times higher than it is for gun stores.

Data readily available from the survey Checkpoint Systems survey for other countries in 2014 found Norway with the lowest rate of thefts at retail stores of 0.83%.  For the countries with the lowest rates:

Norway 0.83% rate of theft at retail stores — 21 times higher than for US gun stores

Japan 1% rate of theft at retail stores — 26 times higher than for US gun stores

Hong Kong, Australia and Germany (1.1 percent) — 28 times higher than for US gun stores

Average country 1.29% — 33 times higher than for US gun stores

There is a broader number of 8,637 “lost” guns reported by the  BATF.  That number isn’t very useful because it overwhelmingly involves cases where gun serial numbers are incorrectly recorded (e.g., a couple of digits in the numbers may be transposed).  Dividing that number by 16 million guns sold implies a 0.054% rate, and that is still much less than that rate for retail stores. the National Retail Federation finds that the rate of “administrative and paperwork errors” is .228% for the average retail store — a rate that is 4.2 times greater than for gun stores.  Remember that since the estimated number of gun sales used in these calculations is a clear underestimate of total sales these numbers underestimate how much better gun stores perform relative to other operations.
Reducing thefts to less than 1/30th the rate of other retail outlets or “administrative and paperwork errors” to less than 1/4th the rate in those other outlets must come at a significant cost.  To reduce theft below about 4 hundredths of one percentage point may require even stronger safes, additional security measures, or even more stringent employee screening.  To eliminate paper work errors much below hundredths of one percentage point may require checking forms yet more times.

Background on numbers

NICS checks that involved gun sales by FFLs was about 16 million (total NICS checks were 23.1 million, but that includes background checks on concealed handgun permits and private gun transfers.  That gives you a rate of 0.039%.  Yet, NICS checks aren’t done per gun sold, but per transaction.  There is no limit on the number of guns that could be involved with a single NICS check.  16 million is thus an extremely conservative estimate of the number of guns sold.

From the BATF report:

BATF guns stolen from FFLs in 2015

The National Retail Federation reports that “inventory shrinkage averaged 1.38% of retail sales in 2014.  But since 16.5% of that is due to “administrative and paperwork errors,” we reduced that percent down to 1.15%.

The rate for “administrative and paperwork errors” for the average retail store is thus 0.228% (1.38 x 0.165).

The CPRC inquired into the differences between the two surveys and got this answer from Checkpoint Systems:

“Thanks for your question. The difficulty in comparing different survey results is that they often have different survey periods, different sample sizes, use different methodologies, a different survey base and don’t always use normalization of data. That is the case here. As such, these numbers are often different. Hope that is helpful.”
For some perspective, in 2014, there were 308,352 gun crimes reported to police (share of gun crimes in murder, robbery, aggravated assaults and total crimes in each category).  With over 300 million guns in the US, assuming that each crime gun is used in just one crime, one-tenth of one percent of guns (0.102%) are used in the commission of crime.  The true percentage is much less than that as each crime gun is on average used in more than one crime.  Even if each crime gun is used on average in just two crimes, that would lower the rate of guns used in crime to just 5 thousandths of one percentage point.  Even if all stolen guns were used in one gun crime, guns stolen from Federally Licensed Gun Dealers would account for just less than 2% of gun crimes.  But that would be an overestimate to the extent that not all stolen guns are used in the commission of a crime.



4 Responses

  1. Tom Olsen says:

    The very low percentage of guns stolen from FFLs also reflects the rigor of internal controls on shipping, receipt and storage. Firearms have serial numbers, bills of lading are probably itemized and checked at both the sending and receiving ends. Not dissimilar to “chain of custody” of criminal case evidence, or movement and storage of controlled narcotic drugs?

    The penalties on FFLs for sloppy inventory controls can be harsh. BATF auditors can and will suspend FFLs. We had just such a case in our rural area of northwest Washington state a couple years ago.

  2. […] to CPRC, there were approximately 16 millions guns sold by FFLs in 2015, and 6,163 guns were stolen from […]

  3. Scott says:

    At that rate, the DOJ conclusion that 232,000 guns are stolen each year and independent surveys showing 380,000 to 430,000 guns stolen are in the same range. In the meantime, the estimate that the underworld has some sixteen million guns available lacks confirming data but is credible from a number of standpoints.

    Not the least indicator of how common guns are in the underworld is the startling speed with which a released convict can walk out of prison and obtain a gun
    Gun Dealers had 6,163 firearms stolen from them in 2015. With the Obama administration finalizing a new rule to enhance dealer reporting of stolen or lost firearms?????? Dumb

  4. Grifhunter says:

    I’d like a comparison of this rate of theft of firearms from FFLs compared to the loss of guns from law enforcement employees and agencies.

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