Scrap Dealer Compliance Inspections

Scrap metal dealers are subject to unannounced compliance inspections by state licensing agencies, local law enforcement, and in some areas, joint metal-theft task forces. Being prepared means never being caught off guard.

What Inspectors Check

1. 1
   License is posted visibly — First thing checked every time. Laminate it and post it at eye level near your purchase counter. A missing or expired posted license is an immediate violation.
2. 2
   Recent transaction records — Inspectors typically request 30–90 days of records. They must be producible immediately. Disorganized or inaccessible records are themselves a violation in most states.
3. 3
   ID record completeness — Each transaction must have all required fields. Missing seller address, missing ID number, or missing material description are the most common specific gaps found.
4. 4
   Prohibited items on site — Inspectors may walk the yard looking for manhole covers, utility wire on spools, guard rail sections, or cemetery materials. Inability to document a legitimate purchase creates a presumption of illegal acquisition.
5. 5
   Electronic reporting compliance — If your state requires electronic reporting, inspectors can verify in real time whether your transactions have been submitted to the required system.

Quarterly Self-Audit

Pull 20 random recent transactions and verify every required field is present and complete. Fix gaps before an inspector does. Download our compliance checklist and run through it quarterly.