Authorities are scrambling to claw back more than 100 gun licences which were sent out to the wrong people.

Service NSW, the government agency tasked with issuing photo identification cards in the state, blamed the mistake made earlier this month on a "processing error", according to Daily Mail.

The bungle has forced the NSW Police Force to issue an urgent warning to firearm dealers to be on high alert when checking licences, The Daily Telegraph reported.

"All efforts are being made by Service NSW to contact the recipients of the incorrect licence cards for retrieval and destruction, and the affected licence holders," NSW Police Force Firearms Registry Operations general manager Georgina Gold said.

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"It is requested that until such a time as all licences that were dispatched to the wrong addresses have been retrieved, that you be extra vigilant in your checking of a person's licence so as to confirm their identity."

Senator David Leyonhjelm warned those who have incorrectly obtained a licence "could buy ammunition and gain access to a shooting range and shoot firearms on the assumption that you are a licensed person".

Service NSW said a total of 2,693 photo cards were sent to the wrong addresses this month, including the 104 gun licenses, 3000 drivers licences, 318 Mobility Parking Scheme Permits, 242 proof of age cards, 26 security licences and three commercial and private investigator licences.

"Service NSW apologises for the incident and we have moved quickly to resolve the issue by contacting the customers affected as soon as possible," a statement from the government agency said.

"The incident was a processing error and Service NSW has improved controls to continue to protect the information and privacy of our customers.

"The error is an isolated incident."