Scrap Metal Payment Delay Laws by State — Hold Period Requirements

Payment delay laws — also called hold period requirements — require scrap metal dealers to wait a specified period before paying sellers for regulated materials. The purpose is to give law enforcement time to match transactions against stolen property reports before the payment clears and the seller moves on.

This requirement is one of the most operationally significant compliance issues for dealers: it affects cash flow, seller relationships, and requires a reliable transaction management system. Here's exactly what each state requires.

Key distinction: In most states, the hold applies to payment — you can take possession of the metal immediately. In some states (notably Florida), the hold also prohibits processing (cutting, shredding, melting) the material during the hold period. Read your state's law carefully.

Payment Delay Requirements by State

State	Hold Period	Materials Covered	Processing Allowed During Hold?
Florida	10 business days (catalytic converters); 3 days (other regulated metals)	All regulated metals, catalytic converters	No — no processing during hold
California	3 calendar days	Catalytic converters; nonferrous metals over $100	Yes — possession only restricted for converters
Georgia	3 business days	All regulated metals, catalytic converters	Yes (metals); No (converters)
Virginia	5 business days (catalytic converters); 2 days (copper/aluminum)	Catalytic converters, copper, aluminum, bronze	No for converters; yes for other metals
North Carolina	3 calendar days	Catalytic converters, nonferrous metals	Yes
Tennessee	24 hours	Catalytic converters, regulated metals	Yes
Texas	No general hold; no cash payment (by check only — effectively 3–5 days for check clearing)	Catalytic converters, copper, aluminum wire	N/A
Ohio	3 calendar days	Catalytic converters, copper, aluminum, stainless steel	Yes
Michigan	3 business days	All regulated metals	Yes
Illinois	3 business days	Catalytic converters, copper, aluminum	No for catalytic converters
Pennsylvania	72 hours	All secondary metals	Yes
Arizona	3 calendar days	Regulated metals, catalytic converters	Yes
Colorado	3 business days	Catalytic converters, nonferrous metals	Yes
Indiana	72 hours	Regulated metals	Yes
Missouri	3 business days	All regulated metals	Yes
Alabama	5 business days	All regulated metals	No
Louisiana	3 business days	Catalytic converters, copper, brass	No for converters
Washington	No state hold; local rules may apply	Varies by county/city	N/A
Oregon	3 business days	Regulated metals	Yes
Nevada	3 business days	Catalytic converters, copper, aluminum	Yes

Use the payment delay lookup tool to quickly check your specific state.

How Payment Delays Work in Practice

A standard payment delay workflow for a compliant dealer looks like this:

1
Record all transaction details at time of purchase — Seller ID, description of material, weight, and agreed price. The hold period clock starts when the transaction is recorded.
2
Issue a payment voucher or claim ticket — Not a payment, but a document acknowledging the transaction and specifying when payment will be issued. Many dealers print these automatically from their management software.
3
Report the transaction to law enforcement (if your state requires electronic reporting) — This typically happens within 24 hours of the transaction. The hold period runs concurrently with the reporting wait.
4
After the hold period expires — If no law enforcement hold has been placed on the transaction, release payment by check or electronic transfer. Never by cash in states that prohibit cash payment.
5
If law enforcement contacts you during the hold — Cooperate fully. Do not release payment or process the material until cleared by law enforcement.

What Happens If Law Enforcement Places a Hold

In states with electronic reporting systems, law enforcement can place an electronic hold on a specific transaction if the material matches a stolen property report. When this happens, you must: retain the material and all transaction documentation, not release payment to the seller, cooperate with the investigating agency, and await a law enforcement release or a court order before proceeding.

Releasing payment or processing material after receiving a law enforcement hold notice is a criminal offense in most states — typically a misdemeanor for first offense, felony for repeat.

FAQ

Yes — the hold applies to payment timing, not to price agreement. You can weigh the material, agree on a price, and issue a payment voucher at the time of purchase. The seller knows exactly what they'll receive when the hold expires. Most dealers use printed vouchers that state the amount, hold expiration date, and payment method. This is standard industry practice and satisfies the legal requirement in all states with payment delay laws.

This varies by state and material type. For catalytic converters, most states require individual tracking — you should not mix converters from separate transactions until the hold period has expired for all of them. For bulk ferrous and nonferrous metals (copper wire, aluminum), most states allow commingling with other materials after the required records are made, because individual identification is impractical. When in doubt, keep lots separate until the hold expires. Ask your state's enforcement agency for guidance on their specific expectations.

Most purpose-built scrap yard management software (ScrapWare, Leads Online, Cycle Count, etc.) includes configurable hold period tracking and will flag transactions as "hold pending" vs. "payable." Configure your system for your state's specific hold period. Some systems integrate with state reporting platforms directly. If you're using generic POS software not designed for scrap dealers, you'll need to manually track hold periods — which is a compliance risk. Purpose-built scrap management software is strongly recommended for any dealer with significant transaction volume.

Payment delay requirements are set by state statute and may be amended. Verify current requirements with your state's licensing agency. This is informational only, not legal advice.