3 Automotive Recycling Business Best Practices

3 Automotive Recycling Business Best Practices

In the scrap automotive recycling industry, there are many business operators. Some of these operators conduct their business following the law, while others do not. This blog will explain 3 best business practices to follow as a business in the automotive recycling industry.


For your business to operate legally there are a range of legal obligations to be followed. In the automotive recycling industry many people everyday conduct illegal transactions because they are either unaware of the legal obligations to be followed or because they intentionally neglect them. Three best practices you should follow as a business in the automotive recycling industry include traceable transactions, customer screening and AML compliance.

Traceable Transactions

Your transactions must be conducted through traceable mediums. These mediums include checks, bank wires, and cash. Transactions made with cash within the catalytic converter buying sector has been a large problem, enticing criminals to steal catalytic converters. This is mainly due to these cash transactions being untraceable and allowing legitimate converter buyers to launder these stolen converters in with their legitimate converters. Whether you deal with businesses, the public or individuals, cash transactions are a legal form of payment as long as you adhere to local ordinances. Cash transactions can be traced provided you have a signed receipt and a copy of a valid I.D. Also, a description of the merchandise and buy ticket sent to law enforcement may be required along with a thumbprint in some jurisdictions. If you are purchasing/selling scrap items, it is best to deal with B2B because there is more security during the sales process. Since sales usually get tracked, it’s also more secure with B2B buyers/sellers. When operating B2B, you can expect the dealing process to be transparent and efficient.

Customer Screening

One of the best screening practices is to issue a customer information form that would include the business name, contact information and tax ID number. This information is beneficial to your business operations because it helps you maintain a record of what entity or individual is receiving payment. This also helps you determine if you are dealing with a legitimate business entity if you only purchase B2B.

Anti-Money Laundering (AML)

The first rule of AML is “know your customer”. In this industry, there are potential threats of money laundering. AML keeps out people engaged in illegal activities from access to legitimate business services with the intent to launder their illicit gains. By incorporating AML into your business you will educate and protect your business from criminals trying to use it to launder.

If you are a business dealing with automotive scrap, it is essential to be aware of the legitimate business practices we all must follow. By incorporating these three practices, you can strengthen the legal standing of your business along with having greater confidence in conducting future business.

Edmund Schwenk

CEO/Metallurgist of PGM Recovery Systems “The single most important factor when you sell auto catalyst from used catalytic converters is the assay, not terms! Assay transparency is paramount! Many de-canners we speak to believe they are not getting correct assays on their material. Some have de-canned, shipped to other companies and received a little more than they could have sold their whole converters for in the first place.”Mission Statement: We at PGM Recovery Systems are providing information and transparency to the catalytic converter recycling industry in an effort to promote a value system of fair dealing. As a result of providing the industry with the proper tools to increase their profits, we are developing long-term relationships with suppliers.