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If the ffl is not home when the ups delivery van comes what happens? Does ups hold the gun at their local facility and wait for the ffl to pick it up or do they return it to the shipper?

Depends on how it was shippped.

If it was shipped with no signature required, then they'll leave it at the door.

If it was sent with a signature required, they will leave a note about the delivery and re-attempt delivery the next business day.

The dealer can ask UPS to hold the package at the depot, or even ask that it be delivered another day in the future.

I'll add that most guns shipped to an FFL require an in-person, adult signature. My experience has been that few don't require this, and my opinion is that all should. In regards to getting the package, a re-delivery or hold for pick up are usually the two options. My UPS driver knows my schedule and will circle around later in her route if she is in my area too early for me to be home. I would imagine a lot of home-based FFL's have similar situations with their drivers.

The home based FFL I use for transfers has shipments sent to a UPS store type of place and then picks them up at the end of the day.

Brian