How to deal with a pawn shop

A few weeks ago, I wrote an article for Mint explaining why pawn loans aren’t a terribly good alternative to bank loans. I received a surprising number of emails asking how best to deal with the pawn guys in order to get as much as you can from them when selling an item or borrowing money against it. First and foremost, selling stuff to pawn dealers isn’t a smart way to get maximum dollar but, if you insist, these tips will help to even the playing field.

Don’t tell them where you got it

Nothing drives me crazier than watching the various pawn shop shows and seeing some bozo brag how he “found it at a garage sale.” What exactly are you telling them when you make such claims? You’re telling them that it has no sentimental value to you. This means you’re more likely to accept an amount that yields a small profit, since you clearly don’t have much emotional skin in the game. It’s none of their business where you got it… so leave it at that.

Don’t tell them how much you paid for it

When you buy something at a store do you ever ask, “How much did you pay for this?” When you borrow money from a bank do you ever ask, “What is your cost of funds?” Of course you don’t. The minute they tell you their costs, you know roughly how much they’re making off the sale at the sticker price. This is why websites like Edmunds are so helpful to car buyers. They tell us how much the dealer paid for a car before we start talking about how much we’re willing to pay them for the same car. It’s none of their business how much you paid for it.

Don’t tell them you know how much it’s worth

When you’re dealing with a pawn shop you have to keep one thing in mind: They’re there to make a profit and you don’t make a profit unless you sell something for more than you acquired it for. It’s THEIR job to determine your item’s value. If you know your gold coin is worth $1,000, then you’re one step ahead of them because they’re still trying to figure out the value. If they really want to buy your item, then let them expend the energy to have it appraised.

Find out how much its worth on your own

If you walk into a pawn shop and try to sell an item without knowing its value, then you’re asking to be ripped off. Much of what we own has no market value. However, things like jewelry, watches, cars, antiques and art are easily appraised for a fairly reasonable price. Don’t walk into a pawn shop trusting that their “appraiser” is going to give you a fair valuation. They likely work for the shop, which means they’re going to low-ball the item so their employer can acquire the item for much less than the true market value.

Let them make the first offer

There’s one indisputable fact in negotiations: He who makes the first offer loses. It’s not a secret that everything is for sale and it’s no secret that we have an amount in our mind that we’ll take for almost anything we own. Whether it’s a proper amount or not, sharing that amount first will almost always lead to a better deal… for the other guy. If you know you want $1,000 for your gold coin, then let the pawn dealer make the first offer. If he offers substantially less than $1,000, you’ll know you’re not even in the ballpark. If you tell him you want $1,000 for the coin, you’re likely to get an offer around $500 because most pawn dealers will try and acquire the item for about half of its real value.

Be prepared to walk

If you think you’re getting taken, walk out the door. Pawn shops are not going to offer you retail price or even wholesale price. They’re going to offer you as little as they possibly can to acquire your item, or what I call “pawn shop value.” This will be less than 50% of what they think they can sell it for. That means you’re paying a middleman to liquidate your item. You’d likely do better selling your item on eBay or at an auction.

How to deal with a pawn shop

If you are interested in buying or selling at a pawn shop but are unsure where to begin or are feeling intimidated by the idea of haggling and negotiating, we can help. As longtime members of the pawn shop community in the Ontario Ca area we have years of experience to draw on to guide you to success when it comes to negotiating with pawn shops.

How to negotiate when selling

First, understand the difference between selling and pawning items at a pawn shop. To pawn an object is essentially to take out a short-term loan against the value of that item. When your pawnbroker makes an offer on your item, you have a set number of days to repay and reclaim your item. If you do not pay, the shop can sell your item. There is usually not much room for negotiation when it comes to loans.

On the other hand, selling to a pawn shop is just that – you receive cash for your item with no agreement that you will reclaim your item, and without needing to repay anything. There is plenty of room for negotiation.

Before you visit the shop, do the following:

Prepare your item – before you visit the shop, make sure that whatever you’re selling is in the best condition possible. Clean it up, attach and adjust any accessories or strings and collect any paperwork that goes with your item.

Do your research – know the value of your item. Even if you think you have a good idea, look at completed sales on online auctions, and see what people are asking (and receiving) for similar items on Craigslist. You may be surprised.

Then, when you visit your local pawn shop, you can begin negotiations with the following in mind:

Have realistic expectations

Do not get offended if your pawnbroker can only offer around 50% of the value of your item. A pawn shop cannot purchase goods at full value because they will need to make a profit on everything they have on hand. They cannot take into account any item’s sentimental value, history, collectability.

Listen more than you speak

Unless they ask directly, your pawnbroker does not need (or want) to know where you found your item, how long you’ve had it, or how much you originally paid for it. In fact, disclosing too much information like this may only hurt you. What you’re really saying by sharing information like this is either that the item doesn’t mean much to you and that you aren’t really invested in how much you get for it, or that you are emotionally attached to it and are expecting to get an unrealistic price.

Additionally, although you’ve done your research beforehand and have a good idea of your item’s value, do not disclose it to your pawnbroker. It is up to them to determine that for themselves, as they must take into account the likelihood that it will sell.

Haggle gently

Let the pawn shop make the first offer. Even if they begin by asking you how much you want for it, insist on them going first. After the shop makes an offer, it’s acceptable and expected to ask for a higher price. However, don’t overdo it or you might end negotiations before they really begin. At most, you might get closer to 60% of the value of your item. If your pawnbroker can get close to that number, take the offer. But, if they are dead set on 50%, that may be the maximum. It’s okay to be confident and assertive but know when to back down. You can always decide to walk away and try again at another pawn shop.

How to negotiate when buying

As a bonus, here are 4 tips for negotiating when purchasing from a pawn shop. Buying at a pawn shop is a slightly different process. You hold more power when you are buying, but you should still do your due diligence and negotiate.

Do your research

Even when you’re on the other side of the transaction, you should still do your research on the type of item you’re interested in, or at least be knowledgeable about how much it usually goes for. Most pawnbrokers price their items fairly, but it is still a chance for negotiation.

Inspect the item

In most pawn shops, all sales are final, so you should ensure that the item is in excellent condition. Make sure that moving parts do so efficiently and that all the vital parts of the object are functional.

Make your offer and begin negotiating

A good starting point is around 80% of the asking price. On some items, especially things that they have a lot of stock of, you can also ask what the lowest price is they will accept and offer $5 – $10 less. They will come back with a counter offer, which you can take, or you can try to whittle down even further.

Pay with cash whenever possible

If you visit your local pawnshop ready to buy with cash, you’ll have better results at negotiating than if you pay with credit or debit. There are even still many pawn shops out there that operate on a cash only, or mostly cash basis. Almost all, however, will be interested in having plenty of money on hand to buy items and to make loans, i.e., to keep their business running smoothly.

Also, paying with cash will help you stick to your budget and makes good financial sense.

On either side of the equation of buying or selling, using these tips can make negotiation simple and maybe even enjoyable. If you have a positive attitude, are respectful of your pawnbroker and understand the fact that they are a business, not a charity, you’ll come out happy and ahead. You will either get some extra cash by selling something you no longer need, or you will get a reasonable price for something you wanted and will use. Visit our shop or call us at (909) 627-9622 today and see just how easy it can be to negotiate with a pawn shop.

How to deal with a pawn shop

You’ve seen Pawn Stars, right? If for some crazy reason you haven’t, here’s how most episodes go: Customer comes in wanting $20,000 for a Timex watch once owned by Hillary Clinton. Rick (the pawnshop owner) offers $10, then the customer lowers his/her asking price to $15,000. This goes back and forth until they either agree upon a price, or the customer walks. That’s a pawnshop negotiation! Well, kind of.

Most pawnshops leave room for negotiation on everything. When they are buying or pawning an item, their first offer might not be their absolute best offer. On the other hand, if you’re buying something from a pawnshop, the ticket price on the item isn’t always the lowest price they will sell it for. You’ve gotta learn to haggle a little bit! That’s the beauty of a pawnshop – getting a killer deal!

We want our customers to be informed on the ins and outs of negotiating at the pawnshop. We haggle prices on a daily basis. Some customers are successful – some customers fail miserably. We want you to become better negotiators! Use this short guide to help you in your quest of getting the best price at every pawnshop you visit! (Although you should only visit Pocket Pawn 😉

DO: ASK FOR A BETTER PRICE EVERY SINGLE TIME

What can this hurt? If you’re buying something from a pawnshop, ask them if that price is as low as they will go. 9 times out of 10 – you’ll get a discount. I promise. Trust us on this. We’re a pawnshop.

If you’re pawning or selling something to the pawnshop, do the same thing! When the pawnbroker gives you their offer, ask them if they can do any better!

If you’ve never asked for better prices before, I can see how this can seem intimidating. If this is you, remember this: pawnshops are accustomed to being asked for discounts and better prices. Rarely do we sell something for the asking price. There is always some sort of discount.

DON’T: MAKE AN EXTREMELY LOW-BALL OFFER

This is a super important rule to follow. When you ask for a discount on something you’re buying at a pawnshop, this is how the conversation will usually go:

Customer: “Hey, I want to get this TV – but is this the lowest you will sell it for?”

Pawnbroker: “Hey! Glad you’re interested. What’s your offer on the TV?”

A lot of pawnbrokers will use this strategy on you. When you ask for a discount on an item, they’ll throw the ball back to you and ask what your offer is.

(Pro Tip: Whoever names the first price loses the negotiation)

If the pawnbroker asks for you to make an offer first – don’t lowball them! Most people think that they should offer half of what the ticket price is. This is a bad move! It starts the negotiation process off in a bad way. In 97% of pawnshop deals, you will not get half off. Most pawnshops list their merchandise for double what they have invested in it. When you offer half, you’re telling the pawnshop that you don’t want them to make money at all!

This move could end up backfiring on you and you might end up with no discount at all.

Instead of offering half, shoot for around a 30% discount. For example, if you’re wanting a laptop priced at $149.95, offer them $100.

This let’s the pawnshop know two things:

You’re a serious buyer

They can probably negotiate up a little and make a sale

DO: BE FRIENDLY TO THE PAWNBROKERS

Do you like to deal with nice people or jerks? Exactly.

If you start negotiating with the pawnbroker and you’re a total jerk, you’re totally not getting a discount. Do pawnshops want to sell merchandise? Of course they do! Do pawnshops want to deal with jerks all day? Notta.

TV shows like Hardcore Pawn on TruTV have given people this idea that pawnshops like to deal with drama. I’m here to tell you – that is the exact opposite. We hate drama and we avoid it at all costs.

Be friendly. Get good deals.

DON’T: POINT OUT FLAWS IN THE ITEM YOU’RE TRYING TO BUY

Never do this. Say you’re buying a pair of Beats by Dre headphones from a pawnshop. You want to get a good deal, so you ask the pawnbroker for a better price. The pawnbroker gives you an offer and you come back with:

“C’mon, you can do better than that. These headphones are in rough shape!”

Don’t do it. Most pawnshops price their items according to condition. So a really nice pair of Beats by Dre might be $150, but a pair that has been well used might be priced at $100.

Condition of the item has already been considered when it was priced. Never point out flaws.

When you point out problems an item has while you’re trying to get a discount, you’re telling the pawnbroker that they do not know what they are doing because they obviously priced it wrong in the first place. It’s just a bad idea to try this strategy. You’ll get a much better discount by avoiding this.

DO: BE INFORMED

The pawnbrokers at our pawnshop will be honest with you on everything. We’re not going to try to tell you that the DVD player you’re buying is made of pure gold, or that the Sharp 4K Smart LED TV you’re trying to sell us is outdated. We’re gonna shoot you straight and try to get to the best deal possible for both parties. That being said, this might not be the case with all pawnshops.

You should have some prior knowledge coming into the negotiations.

If you’re looking to sell your TV, put the model number into Google and see how much it sells for new. If you’re buying a DeWalt cordless drill, pull out your smartphone and look up the model number to see what it’s actually worth. If that DeWalt drill is $100 at Lowe’s and $50 at the pawnshop, you’ve gotta deal! If you see it for $100 at Lowe’s and $90 at the pawnshop, this is something you can nicely prove to the pawnbroker during the negotiation.

(Emphasis on the nicely. Don’t be rude. People make mistakes. Even me 😉

DON’T: HAVE OUTRAGEOUS EXPECTATIONS

Pawnshops exist to make money. They can’t buy your TV for $350 if it sells for $400 brand new and they can’t sell you that chainsaw for $30 when they have $50 in it. As stated earlier, most pawnshops will buy things for half of what they expect to sell them for.

If they buy a TV for $75, they’re probably going to list it at $149 and negotiate down to $120-$130 if they need to. (This margin drastically decreases as the value the item increases. For example: a pawnshop might have $400 in an item they are selling for $600)

Shopping at a pawnshop should be an enjoyable experience. The pawnbrokers should be nice, friendly, and willing to negotiate on some items. This might not be true with every pawnshop you visit, just like you might not get the same service at every Home Depot you visit. Don’t let this stop you from going to pawnshops and scoring great deals! Don’t let one bad apple ruin the bunch.

For the most part, pawnshops are owned and operated by great people! Especially Pocket Pawn in Ozark, Alabama. That place is pretty awesome if I say so myself!

Now go out and get a good deal!

Have you ever negotiated at a pawnshop before? Tell us about your experience in the comments! Was it good or bad? Did you get a good deal? We want to know!

Have you ever been to a pawnshop? For a lot of people, there seems to be something, well, shady about these places. But if you haven’t been to a pawnshop, you may be missing out on some great bargains. A pawnshop is a lot like a dozen garage sales and a flea market all rolled into one. Pawnshops also play an important role in many communities by providing people with an easy, fast way to borrow small amounts of money.

There are three things that happen in any pawnshop hundreds of times every day:

  • People borrow money by putting up something they own as collateral.
  • People sell used merchandise.
  • People buy new and used merchandise.

In t­his article, you will have the chance to learn exactly what is going on behind the scenes at a neighborhood pawnshop as we visit Rick’s Music & Pawn and talk to its pawnbroker, Gale Ausley. You’ll realize that at the heart of a pawnshop is a fantastic lesson in economics! We’ll also look at the most commonly asked question about any pawnshop: "Is the stuff in here legit?"

Our thanks to Gale and Brian Ausley, pawnbrokers at Rick’s Music & Pawn in Dunn, NC, for their help with this article.

­Pawnshops and pawnbroking have been around for thousands of years. The basic idea behind any pawnshop is to loan people money. It goes like this:

  1. You bring in something you own and give it to the pawnbroker as collateral for a loan (this act is called pawning).
  2. The pawnbroker loans you money against that collateral.
  3. When you repay the loan plus the interest, you get your collateral back.
  4. If you don’t repay the loan, the pawnbroker keeps the collateral.

As defined by the North Carolina General Statutes, 91A-3:*

  • Pawnbroker – Any person engaged in the business of lending money on the security of pledged goods and who may also purchase merchandise for resale from dealers and traders
  • Pawnshop – The location at which, or premises in which, a pawnbroker regularly conducts business
  • Pawn or Pawn transaction – A written bailment of personal property as security for a debt, redeemable on certain terms within 180 days, unless renewed, and with an implied power of sale on default

In the next section we’ll discuss an example of a pawn shop transaction.

How Much Will You Give Me

­­To try this out, I went to Rick’s Music & Pawn and asked, "How much will you loan me for my wedding ring?"

It’s a nice wedding ring — a standard gold ring with my wife’s name and our wedding date engraved inside. Bought new in 1994, the ring cost about $140.

In return for pawning my wedding ring, I would receive $10 and a pawn ticket. The ticket would indicate the following:

  • The item that I pawned
  • The amount of money loaned to me for the item
  • The amount of money due in 30 days to get the item back

My ticket would tell me that, for my wedding ring, I received $10 and that I need to pay $12.20 (that’s 2 percent interest plus 20 percent in fees on my $10) in 30 days to get the ring back. Within 30 days, I have three options:

  • I can return to the pawn shop and pay the full amount ($12.20 in this case) to retrieve my wedding ring.
  • I can return to the pawn shop and pay the monthly fee ($2.20 in this case) to extend my loan for another 30 days. At this point, I’d have to enter into a new contract for the next 30 days. Here’s where some pawnshops differ on the second-month contract: Some would make you pay 22 percent on the new principal, $12.20, (for a total of $14.88), while other pawnshops will allow you to continue paying 22 percent on the original principal.
  • I can do nothing, in which case the pawnshop keeps my ring and sells it.

That, in a nutshell, is the basic pawnshop transaction. In a busy pawnshop, that sort of transaction happens hundreds of times every day. In many communities, the pawnshop is pretty much the only easy way to borrow small amounts of money. If you need $100 to make it through the week to your next paycheck, where are you going to get the money? A bank is not going to touch a small loan like that, and even if it did it would take a week or two to process the application. A pawnshop is a quick, easy way to get a loan.

Of course, $2.20 fees due in 30 days for a $10 loan is a pretty steep rate. That’s 264 percent per year! Let’s take a look at how a business can legally charge that type of interest.

Is This Information Correct?

­Pawnshops are regulated at the state level in the United States, and every state has different rules. Some of the details are absolutely fascinating! As an example, let’s take a look at how a pawnshop works in the state of North Carolina.

Pawnshops are a business just like any other. But unlike many other businesses, pawnshops have a special set of laws that keep them on the straight and narrow. Pawnshops are specially licensed, and it turns out that they have to cooperate with police on a daily basis to prevent the movement of stolen merchandise.

When you pawn an item, the pawnbroker takes your name and address, verifies it with your valid driver’s license and then inspects the item carefully. Most pawnshops have the ability to test diamonds and gold for authenticity. If you are bringing in something like a TV or VCR, the pawnbroker tests it to make sure it works properly. If there is a serial number on the item, it’s also recorded on the pawn ticket. In the next section we’ll examine the reasons a pawnshop must complete paper work on each item.

­North Carolina privacy law requires pawnshops to keep all nonpublic personal information private. They also have to give each customer a "Customer Privacy Notice." What does this mean? If a thief sells your stolen television to a pawnshop and you come in and see it the next day (and validate it with the serial number), the pawnbroker cannot tell you who brought it in, or even when the TV was brought in and sold. He must direct you to the police, who will investigate your claim.

There are two ways to use a pawnbroker — you can either leave something valuable as security for a loan, for example jewellery or an antique, or sell the item.

What’s in this guide

  • What you can pawn
  • What to do if you can’t pay them back
  • What happens if you lose your receipt
  • What happens if you don’t repay the debt
  • What happens if your local pawnbroker closes
  • Alternatives to pawnbrokers
  • You hand over the item (known as a pawn or pledge) to the pawnbroker who will value it for you.
  • The pawnbroker should give you a ‘Pre-contract Credit Information’ form if you’re a new customer — if you’ve borrowed from the firm in the last 3 years, you can ask for this (and it’s always best to do so).
  • You’ll be given a credit agreement to sign — check this carefully and ask questions if you don’t understand anything.
  • The agreement will set out how long the loan lasts and how much it will cost. It’ll usually be a minimum of six months (but you can agree a shorter or longer period).
  • Unless it’s part of the credit agreement, the pawnbroker will give you a separate pawn receipt which you’ll need to keep in order to prove you own the item.
  • You can redeem the pawn at any time by paying what you owe and getting the item back. If you don’t repay the loan during the redemption period, the pawnbroker can sell it to recover the cash.
  • There is a 14 day cooling off period, within which you have a right to withdraw from the agreement and just pay interest for the period from the date you took out the agreement to the date you decided not to go ahead with it.

If you want to use a pawnbroker, make sure they’re a member of the National Pawnbrokers’ Association, which has a code of conduct for members.

Visit the National Pawnbroker’s Association’s website

You can expect to pay a pawnbroker a higher rate of interest than you would for a high street loan, but it would normally cost you a lot less than a payday lender.

You might be quoted a monthly or daily interest rate, although the pawnbroker must also show the annual interest rate and the APR (the annual percentage rate of charge).

Shop around to find the most competitive rates.

You’ll usually be expected to repay the loan in one payment rather than in instalments.

If you need more time to repay, the pawnbroker might agree to extend the term and draw up a new credit agreement, although they can refuse.

They’ll normally expect you to at least pay back the interest you owe.

Is your household income getting squeezed?

If you’re facing higher living costs, but have little or no extra money coming in, find out about extra sources of income and support available to help you manage your household bills and save money in our guide What benefits you can claim and other ways to increase your income

What you can pawn

You can pawn anything of value that can be re-sold. Jewellery is the item that most people choose to pawn.

If you have a poor credit rating it might be easier to borrow from a pawnbroker than another lender, and there might be fewer credit checks.

It’s quick – normally you will have your money the same day.

A pawnbroker should let you redeem your goods at any time and only charge interest for the period you have borrowed the money.

If the item is sold and there is a shortfall, the pawnbroker will usually not pursue you for this (but check whether this will be the case).

Using a pawnbroker can be a relatively expensive way to borrow.

You can usually only borrow a percentage of the value of the item you want to pawn. So if, for example, you have some jewellery worth £200, you might only be able to borrow £100.

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What to do if you can’t pay them back

If you can’t repay your loan by the deadline and you don’t want your item to be sold, you can ask the pawnbroker if they’re prepared to extend the deadline, but they’re not obliged to agree.

If you borrowed up to £75 and you cannot repay the loan, ownership of the item will pass automatically to the pawnbroker.

If you borrowed more than £75, the pawnbroker could sell the item and keep the proceeds – but they have to try to get the best value for the item, and if there’s any surplus (after the debt is paid and costs deducted such as auction costs) they have to pay this to you.

If the loan is for over £100 the pawnbroker must tell you in advance if they’re going to sell it.

This gives you a chance to pay them and get your goods back.

Beware of loan sharks

Loan sharks often use online channels like social media to try and lend to people. This kind of lending is illegal and it could cost you a lot more than you think.

What happens if you lose your receipt

If you’ve borrowed up to £75 you can ask the pawnbroker for a ‘standard form’ which you sign to say the property is yours.

If you’ve borrowed more than £75 you would need to sign a statutory declaration.

This might involve going to a magistrate or a Commissioner for Oaths, or a Justice of the Peace if you live in Scotland.

You can also go to a solicitor, but they are likely to charge a fee for this.

What happens if you don’t repay the debt

Make sure you know the value of the item before you pawn it, so you’ll have evidence if you feel the pawnbroker has sold it for less than it was worth.

First, complain to the pawnbroker in writing.

You can use evidence such as newspaper clippings or written quotes to back up your claim.

Make sure you know the value of the item before you pawn it, so you’ll have evidence if you feel the pawnbroker has sold it for less than it was worth.

If the pawnbroker doesn’t respond your complaint or you don’t manage to sort out the problem within eight weeks, you can take your complaint to the Financial Ombudsman Service (FOS).

You can take a pawnbroker to the Small Claims Court but there are fees to pay and there is always a risk the settlement reached might not be what you want.

Visit the Financial Ombudsman Service website

What happens if your local pawnbroker closes

Sometimes a chain of pawnbrokers will close some of its stores (or close down completely). Here’s some information on what do if this happens.

The items you left as security for a loan are normally safe and you can still get them back

The National Pawnbrokers Association (NPA) has stated that, in the event one of its members closes, there’s no reason to believe your pledges are at risk. Items are usually safely held at a central location.

Your loan is still active, so keep making payments on it

You should continue keeping up with repayments under the terms of your loan. Not paying could affect your credit rating and you might find it difficult to get credit in the future.

How to contact the company that closed down

You can try existing numbers for the pawnbroker that closed down. Alternatively, you can contact the NPA on 0172 785 8687 who might be able to help you reach the pawnbroker.

If you’re not happy with the response the company has provided

If you’re not happy with the response from the company or can’t reach them, you can contact the Financial Ombudsman Service to complain on 0800 023 4567 or the FCA customer helpline on 0800 111 6768.

Put simply—customers pledge property as collateral, and in return, pawnbrokers lend them money. When customers pay back the loan, their merchandise is returned to them. Pawn loans are made on everything from jewelry to electronics. If the customer elects not to redeem his or her collateral, there is no credit consequence to the borrower and the items are sold at a value price to retail consumers.

Pawnbrokers are governed by all of the major federal laws that apply to other entities designated as financial institutions, including:

• USA Patriot Act

• Bank Secrecy Act and IRS regulations requiring reporting of certain cash transactions

• Trading with the Enemy Act and related Executive Orders and regulations

• Privacy provisions of the Gramm-Leach-Bliley Financial Services Modernization Act

Pawn stores offer collateral loans for surprisingly low interest rates. They specialize in short-term small loans.

Pawn stores can offer this type of deal because the customer offers personally owned property as collateral, which significantly reduces the risk for the lender. When the customer pays the loan back, the property is returned. In the U.S., over 80% of all collateral property is re-claimed.

Pawnbrokers also lend larger amounts of money for more flexible periods of time at lower cost. If you take a secured short-term loan from a pawnbroker, you will only pay interest on the actual period for which you use the loan.

Secured short-term loans from pawnbrokers are highly regulated, and all the terms of business are clearly stated in a government-regulated contract.

So, if you are looking for a secured short-term loan and don’t qualify for a loan from your bank or credit union, check out what the Pawn industry has to offer!

How does a pawn work?

A pawn is another term for a collateral loan. Pawnbrokers lend money on items of value ranging from gold and diamond jewelry, musical instruments, televisions, electronics, tools, household items, firearms, and more. Some pawn shops may specialize in certain items. Loans are based on the value of the collateral. When a customer pays back the loan, their merchandise is returned to them. A customer may also choose to surrender his or her collateral as payment in full. Pawn shops may offer extensions/renewals (where permitted by state law).

Why would someone go to a pawnbroker to get a loan?

Pawnbrokers offer the consumer a quick, convenient and confidential way to borrow money. A short-term cash need can be met with no credit check or legal consequences if the loan is not repaid. Pawnbroking imposes a discipline on the borrower that other lenders do not. Pawn loans do not cause people to overextend credit or go into bankruptcy.

How much should I expect for a loan on my item?

Loan amounts vary according to the value of the item. There is no minimum dollar amount allowed on a pawn transaction but the maximum amount may be set by state pawn laws. Your loan amount will be determined according to other factors as well such as demand and condition of the item. Not all pawn stores are the same and price will vary.

How do you determine the value of the item?

Pawn shops base the value of the item on current appraised value, its current condition and the ability to sell the item. Pawnbrokers use research tools that they have at their disposal to determine an item’s value and get you the most money for the item. The appraisal process varies depending on the type of item—for example, jewelry is evaluated differently than a DVD player. All items that pawn shops buy or pawn are tested to ensure that they work properly.

How can I be sure the merchandise I purchase at a pawn store isn’t stolen?

Less than 1/10 of one percent of all pawned merchandise is identified as stolen goods. That’s because customers must provide positive identification and a complete description of the merchandise. This information is then regularly transmitted to law enforcement, which dramatically decreases the likelihood that a thief would bring stolen merchandise to a pawn store.

Are pawnshops regulated?

Yes, Pawnbrokers are governed by all of the major federal laws that apply to entities designed as financial institutions. The federal laws that regulate the pawn industry are Patriot Act, Truth in Lending Act, Equal Credit Opportunity Act, as well as Data Privacy and Safeguard of consumer information as part of the Federal Trade Commission (FTC) Rules. Pawn shops that deal in firearms are regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Pawn shops may also be Federal Firearms License holders. States have regulated the pawn industry for decades, and most pawnbrokers are licensed and regulated by local authorities as well.

Do pawn customers enjoy the same protections under federal law that customers of other financial institutions enjoy?

No. Pawn transactions are the only type of consumer credit that requires reporting to local law enforcement agencies. In many states this reporting is required daily, and must include extremely sensitive personal information about the consumer (i.e. ethnicity, gender, address). Much of this information qualifies as “non-public personal information” under federal privacy law and is entitled to protection as such.

Do most pawn customers lose their merchandise?

On average, about 80 percent of all pawn loans are repaid. Repeat customers make up a majority of the business, similar to any other lending or retail establishment. Pawnbrokers establish relationships with their customers because they often borrow against the same items repeatedly. Pawnbrokers offer non-recourse loans, looking only to the item being pledged to recover their investment if the borrower chooses not to repay the loan.

Are pawns rates excessive?

No. To provide their service, all lenders must charge rates commensurate with the size and duration of the loan, collateral, risk and recourse. Pawn transactions are small-dollar, short-term loans with no hidden charges.

Unless you’re independently wealthy, you probably look for ways to save money as often as you can. Shopping online for discounts is one great way, saving money on groceries, utility bills and car insurance are others.

But here’s one you may never have considered: shopping at a pawn shop. It’s actually a viable way to save money – and not just on guns. Here’s why.

Dispelling the Myth About Pawn Shops

I’m sure that as soon as you read the phrase “pawn shop,” something like the following image came to mind: an old fat guy in a wife-beater t-shirt sitting behind a counter watching TV with a cigarette hanging out of his mouth. There may even be a gun and a dog at his side, random stuff piled up everywhere in the aisles, and a stench of stale beer and body odor.

Well, believe it or not, there are some pawn shops out there that don’t fit in with this stereotype. In fact, some are actually very clean and professional. So don’t let preconceived notions stop you from saving money.

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3 Things You Should Buy from a Pawn Shop

  1. Tools. Buying tools brand new can get quite expensive, and the prices at pawn shops are typically unbeatable. If you’re looking for a tool that you’re going to need for just one or two home improvement jobs, definitely consider a pawn shop. It’s simply not worth it to pay full price for seldom-used tools.
  2. Jewelry. Pawn shop jewelry prices are normally about half of what you would pay retail (yes, I said half!) and the quality is just as good. Some people may have an issue with buying “used” jewelry, but isn’t almost all jewelry “used” in some way, shape, or form? Diamonds are removed from one diamond ring and placed on another; gold is melted and re-formed into new jewelry all the time.
  3. DVDs. I get used DVDs for $2 a piece at my local pawn shop. You can inspect the disc for any scratches before buying, and I’ve never had a problem with any movies purchased there. Usually, if it doesn’t play, they’ll just let you switch it out for another one. You can also find a lot of older movies and in pawn shops that I doubt you’ll be able to find at any retail site. And again, at $2 apiece for various DVD movie formats, you just can’t beat it.

How to deal with a pawn shop

4 Things You Shouldn’t Buy from a Pawn Shop

  1. Vacuum Cleaners. You just don’t know what other people have tried to suck up with their vacuums before. You can also introduce new germs and allergens to your house by using a vacuum that has been used elsewhere.
  2. Computers. I’d be really leery of purchasing either a desktop or laptop computer from a pawn shop. There are just too many things that could potentially be wrong with them, and you wouldn’t find out about the issues until it’s too late.
  3. Televisions. Of course, there is an implied risk with purchasing anything from a pawn shop since its all used merchandise, but this risk goes up even further with televisions, especially flat-screen LED TVs.
  4. Small Electronics. This includes digital cameras, GPS navigation systems, and the like – for the same reason as above. Too many things could already be wrong with them.

Other Things to Be Aware Of

Some pawn shops are shadier than others, but the one thing you need to keep in mind before you even walk into one is: buyer beware! Understand that all merchandise there is used, and could break down on you. That’s the main reason why it’s less expensive than buying brand new.

Keep in mind that most pawn shops have a “no cash back” policy. If you do have to return something, you’ll probably only get back the money you spent in the form of a credit that can be used at that store only. Most pawn shops also have very limited return policies. Be sure to inquire specifically about all aspects of any return policy they may have.

Final Word

Yes, you can buy from a pawn shop and you can save money by doing so. I have purchased many things from pawn shops over the years, and most have worked just fine. Have some things broken after I bought them? Absolutely. But the overall money that I have saved over the years has far outweighed the replacement cost of the few things that did break down.

What are your thoughts on purchasing items from a pawn shop? Is it something you do on a regular basis, or do you stay far away from them?

How to Sell to a Plantation, Florida Pawn Shop: 4 Tips That Will Maximize Your Experience

Viewers of Antique Road Show and other types of programs are constantly in search of one of those rare high-value items that are just collecting dust in the attic.

If you know how to sell to a pawn shop, you can avoid that endless search and find something valuable to bring in the money you’re looking for. When searching out the right Plantation, FL pawn shop, be sure you bring in the right kinds of items.

Here are four tips to ensure your trip is well worth the effort.

1. Don’t Waste Their Time

Stop by a pawn shop before you bring in your item. When you lug around the thing you’re trying to sell, you not only risk damaging it but also risk wasting the pawn shop’s time. When you bother them with items they have no interest in or market for you’re not going to enjoy the result.

If you bring in a good item to a pawn shop that has little interests in it, they’re not going to give you what you think the item is worth. When you’re faced with getting rid of a valuable item for next to nothing or holding out for the perfect price, you could get frustrated. It’s likely you’ll let the item go for much less than it’s worth.

Don’t waste your time either. You need to go around and visit a few different Plantation, FL pawn shops. When you know what shops are selling, what they have too much of, and what they don’t have enough of, you’ll be able to predict what they need.

Rather than offering an item that they know they can’t sell. Go look for a shop that doesn’t have what you’re offering. You get a much higher price when you’re offering something they have a low supply of with a high demand.

2. Decide On Pawning Or Selling

Before you head out the door, make sure that you know whether you want to pawn or sell your item. If you’re going out to a pawn shop, why sell an item when you could do it yourself online for more? The idea of pawning your item means that you have the option to get it back later.

Pawning is much more flexible than selling. Once you sell an item, it’s in someone else’s arms forever. There’s no turning back.

Talk to the pawn shop owner if they seem like they want your item. They can educate you but you’re better off educating yourself on the differences before you go in. Your decision to sell or to pawn should be based on how quickly you can pay back the pawn shop.

When you pawn something, you get what basically amounts to a loan. If you’re not good at paying back a loan, reconsider whether you want to sell it outright or not.

Sometimes the cash is really what you need.

3. Everything is Negotiable

When it comes to pawn shops and jewelry stores, no prices are written in stone. Since gold and jewels are the types of assets that go up and down in value all the time, shops pay higher prices when gold is at a high value. Even if gold is up, check around and see if there’s a shop that gives you a higher price.

Visit a few shops and have your items appraised when you’re dealing with jewelry, gold, diamonds, or other items of that type. Check the value online and see if you can find a buyer if you’re not pleased with what you’re getting from pawn shops. If you’d prefer to work with a pawn shop, quote the price you’re offered online when you go into the shop.

If you’re dealing with an asset like art, have a dealer or a gallerist give you an estimate.

No matter what you’re trying to sell, getting an estimate in advanced gives you a base to start from. If you could get $10,000 for an item, you know what risks you’re taking when someone offers you $5,000.

Haggling is common in the world of pawn shops. When you’re selling something, negotiate and be firm with what your lines are. If you don’t get what you want and you know there’s a buyer out there, don’t be afraid to walk out the door.

4. Bring In Good Items

If you’re trying to get someone to buy an item, you shouldn’t bring in the worst you have to offer. Instead of trying to sell things you don’t have value for, sell things that you know are valuable and that other people want. Think like a shop owner and you’ll soon realize that they only want items that they know they’ll be able to get rid of.

When you offer high-end watches, like Rolex, or firearms, you can expect to get around 3/4 of the market value for them.

Things that are already inexpensive, like appliances, video game consoles, or tools won’t yield very much. There are items that have lost value over time, like fur coats, that simply aren’t worth the effort for most pawn shop owners.

With each item, bring in a good story about them. If there’s an emotional attachment, then you’re more likely to get a good loan on your pawned item. If you’re in a taxing financial situation and have a really great item on hand, then you’re going to get a good return on it.

Repeat business also plays into things so if you build a relationship of bringing in good items, expect a good return.

Learning How To Sell To a Pawn Shop Takes Effort

If you don’t learn how to sell to a pawn shop, you’re going to be in for a steep learning curve. Selling to pawn shops requires you to be savvy and know what you’re holding onto.

How to deal with a pawn shop

If you’re a fan of reality shows like “Pawn Stars” or “Hardcore Pawn,” you’re already familiar with how pawnshops work. While you can sell almost anything at a pawnshop, certain items are more in demand than others and are more likely to fetch higher dollar amounts. Knowing what to expect can be helpful if you’re in a pinch and need a certain amount of cash quickly — say $500.

What Is a Pawnshop?

There are about 10,000 pawnshops nationwide, according to the National Pawnbrokers Association, many of which are family-owned businesses. You bring in an item to a pawnshop, and the pawnbroker will offer you a short-term loan based on the item’s value. If you pay off your loan in time, you get your item back. If you don’t pay the loan in time, the pawnshop is free to sell your item. You can also sell your items outright.

A personal loan from a bank is a better alternative if you qualify. Otherwise, pawning might be a viable option.

Pawnshop Advantages

Pawnshops have several distinct advantages. First, they don’t care about your credit, so you can get a loan even if you have poor credit. Also, if you fail to pay back your pawnshop loan, it won’t affect your credit score — you’ll simply forfeit your pawned item. Another advantage is that you’ll be able to get cash on the same day, so if you need money in a hurry and have no other options, a pawnshop may work for you.

Disadvantages of Pawnshops

Pawning items for cash has serious drawbacks, the largest of which is the exorbitant annual percentage rate you’ll pay on the loan. The shops are regulated by states, so how much interest they charge varies widely but can range anywhere from 12% to over 240% APR, according to Nolo. A 240% APR means you’d pay 20% interest per month until the loan is paid off.

Note that pawnshops only loan you about 25% to 60% of an item’s resale value. If you pawn a piece of jewelry worth $1,000, you might get a loan amount of between $250 and $600, but you won’t get the value of the item. And, of course, you’ll risk forfeiting a $1,000 piece.

The average loan from a pawnshop is $150 and lasts 30 days, according to the NPA. About 85% of people do pay back their loans and reclaim their items.

What Can You Sell at a Pawnshop?

You can sell almost anything at a pawnshop, but some items command higher prices. Keep in mind that if you never pick up your item, the pawnbroker needs to sell it to make a profit. If they have a lot of inventory of whatever you’re selling, they might not buy it at all, or you may get a very low offer.

High-Demand Pawn Items

Pawnshops know certain things have good resale value, and they’re almost always looking to buy these items:

  • Jewelry
  • Precious metals
  • Watches
  • Firearms (registered to you)
  • Electronics
  • Power tools
  • Musical instruments
  • Sporting goods, such as bikes
  • Gaming consoles
  • Antiques
  • Smartphones

You can try to negotiate the price they offer you if you think it’s too low. Different pawnshops make different offers, and loan amounts can vary widely depending on the broker, the popularity of the item in a particular market and the item’s condition. If you have time, visit several pawnshops to get the best offer.

What Can I Pawn for $50?

The following items can often fetch $50 or more:

  • Designer sunglasses
  • Designer belt
  • Lawnmower
  • KitchenAid mixer
  • Leaf blower
  • Laptop
  • Beats by Dr. Dre headphones

Clean items in excellent condition have the best chance of getting top dollar.

What Can I Pawn for $100?

According to Pawn Guru, these items bring in $100:

  • Hoverboard
  • Flat-screen TV
  • Tablet
  • Bose speakers
  • Firearm (registered to you)
  • YETI cooler
  • Apple watch
  • Refrigerator
  • GoPro
  • Power tools
  • Jewelry
  • AC unit
  • Golf clubs
  • Game consoles

Certain in-demand items can be worth more than $100. A new, in-the-box Nintendo Switch can net you between $200 and $230.

What Can I Pawn for $500?

Since pawnshops typically offer somewhere between 25% and 60% of an item’s resale value, you’ll need to pawn an item worth between $835 and $2,000 to get $500.

Jewelry

Concentrate on items with gold, diamonds or platinum. Pawnshops sell a lot of jewelry, and they often have someone on hand with specific expertise in gold and precious stones. They’ll be familiar with things like cut, carat weight and melt value. If you aren’t familiar with current prices on jewelry, it might be smart to bring the pieces to a jewelry store that sells pre-owned and estate jewelry to get a quote for comparison, and perhaps a better deal.

Other Precious Metals

Precious metals are easy to pawn because they tend to appreciate over time. This makes them a good risk for a pawnshop.

New High-End TVs

If you’re looking to pawn a nice, new TV, it needs to be high-definition or 4K to fetch a significant price.

Collectibles

Collectibles can be tricky, with some commanding far more money than others. Some collectors’ items are worth well over $500, so do your homework by researching values on WorthPoint or checking sold prices on eBay before you head out to a pawnshop. Note that some collections aren’t worth much at all; your collection of Beanie Babies, vintage band T-shirts or royal memorabilia probably won’t get you much.

Coins

Much like collectibles, coins can vary widely in value. A 1964 Kennedy half dollar is worth about $10, whereas a 1913 Liberty Head V Nickel averages over $3 million, so be sure you know what your coins are worth before pawning them.

Firearms

High-end firearms that are registered to you and are in good working order can easily get you a $500 loan.

Vintage Technology

If you happen to have one of the following, you can probably get $500 for it at a pawnshop:

  • Macintosh 128K — Worth $1,500 to $2,000
  • Pioneer SX-1980 Stereo Receiver — Worth $10,000-$15,000
  • An original, unopened iPhone — Worth $4,000 to $6,000

Final Take

If you need cash in a hurry and you have an item you won’t miss, a pawnshop could be a good option for you. Keep in mind that interest rates and finance charges can be quite high, so consider other sources of cash if you can afford to wait a bit.

Unique Side Gigs

Daria Uhlig contributed to the reporting for this article.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

We found three Web sites that did the best job of offering a heads-up to the hard-up.

ehow.com breaks it down into 4 simple steps (which aren’t really steps, but why nitpick?). The gist of their advice: Think small (literally: don’t haul in your couch), think like a pawn shop owner, don’t expect to get much money (about 30% of the real value) and find out how long you have to change your mind (and presumably come into some cash) and get your stuff back.

Associated Content has an interesting take on the subject, even if the headline is misleading. If you’re not familiar with Associated Content, it’s kinda like a Wikipedia of how-to articles. And if that doesn’t make sense to you, here’s how Wikipedia describes Associated Content: Associated Content (AC) is an online publisher and distributor of user generated content. Associated Content enables anyone with Internet access to publish their content on any topic and then distributes that content through its website and content partners.

AC’s pawn shop article promises to tell you the “top five items to sell at a pawn shop.” Great, except it then only gives you three items to sell at pawn shops and two to sell elsewhere. The article offers lengthy explanations, but the 3 things it recommends taking to pawn shops are: musical instruments, spare computer externals (monitors, printers, etc.) and TVs.

ExpertVillage.com is another how-to portal, only it’s more like Associated Content meets YouTube. Here, users post videos telling you how to do things like bottle and cap your home-brewed beer or Playing E Aug in 1st Inversion Arpeggios on Guitar. (Seriously.)

It has the most extensive advice, in the form of 18 short videos offering tips on how to buy, sell, trade, and save money in pawn shops. Topics include “how to avoid common mistakes” as well as what to do if you think a pawn shop has stuff of yours that was stolen. But one thing to keep in mind: this advice is clearly coming from a pawn shop owner. Not that there’s anything wrong with that. But it does explain why the first video’s topic is: “Being Respectful in Pawn Shops.”

Other videos explain how resale value works, how to get deals on silver and gold jewelry, digital cameras and vintage guitars.

How to deal with a pawn shop

Big Deal Pawn & Shop is here to get you what you need. That is why we lend more on everything from smartphones to power tools. We also lend more for gold, diamonds, and higher-end jewelry, watches, and up to date electronics in Acworth, GA.

We Pay More to Buy Gold & Jewelry

Do you want to sell your jewelry instead of pawning it? At Big Deal Pawn & Shop we will take whatever type of gold that you have, and that includes any broken or scrap gold, silver or platinum for some fast cash.

We are committed to giving you top money for your gold, jewelry and gemstones. We will not be beaten on price!

We sell cool stuff

How to deal with a pawn shop

We sell great stuff at great prices every day of the week. Our selection of products is always changing and among all of our pawn shops we have a deep selection and variety of merchandise of all kinds for all kinds of needs and all kinds of people! Our pawn shops feature a retail floor that offers an interesting variety of used merchandise of all kinds as well as gold, jewelry, electronics and more.

We Have Great Promotions & Sales

We like to have fun and excitement in our pawn shops in Acworth, GA so we are always coming up with creative ways to do just that. On top of everyday low prices on all of our stuff all the time, we spice it up with celebrations of special occasions and holidays.

Our People Are Awesome!

There are some other nice people in the business but without a doubt our people are the best. That is because they love their jobs and have a passion for what they do. Plus, they know their stuff. Many front line staff have been with us for a decade or more and bring their best everyday for themselves, their families, their co-workers, and their customers.

We Love Our Customers

We love all of our customers in Acworth, GA. We are here to serve their needs, we are here to help, and we are here to say yes. Everything we do is directed at making our business better and more valuable and useful for our customers. We respect and value your business. Without your support and patronage we would not exist. Thanks for making us your first choice.

Big Deal Pawn & Shop is more helpful than a bank because you can borrow small amounts of money � without hassle. We don’t need financial information, proof of employment, and you never have to fill out a loan application. All you need is to bring your valuables and a valid ID to our pawn shop in Acworth, GA and you will receive top cash immediately.

We are here to get you what you need. That is why we lend more on everything from smartphones to power tools. We also lend more for gold, diamonds, jewelry, watches, and up to date electronics.

If you would rather sell your stuff than pawn it, we can buy it for cash too�we pay more than our competitors to buy gold, diamonds and jewelry. Bring it into our pawn shop and let us make you an offer.

We sell great products at great prices. Our selection of products is always changing and we have a large variety of merchandise items of all kinds; for all kinds of needs and all kinds of people!

How to deal with a pawn shop
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The world of pawn shops is a fascinating place. The most interesting thing about them is that they are not only a source for borrowing money but also an opportunity to find great deals on anything you could ever want. Pawnshops have items ranging from the newest electronics to vintage furniture and even some rare coins or stamps.

This article will highlight what you need to know when considering buying or selling goods at pawnshops to get your desired results.

Finding the Right Pawn Shop

The first step is finding a pawn shop. This can be done in a variety of ways, such as checking the phone book, doing an online search, or asking friends and family for referrals. Once you have a few potential shops in mind, it’s time to start investigating them.

One important thing to consider is how reputable the pawnshop is. You want to find a pawnbroker that is trustworthy and fair, along with one who has a good selection of items. This can be determined by reading reviews online or by asking people who have done business with that particular store before. To find out about a pawnbroker’s reputation, you can do a quick online search or ask the Better Business Bureau.

How to deal with a pawn shop

Another thing to look for is whether the pawnshop offers any type of guarantee on the items it sells. A reputable shop will offer some type of guarantee, whereas a less reputable one may not.

Finally, it’s important to make sure that the pawnshop is licensed in your state. This information can be found on the pawnbroker’s website or by contacting your state’s Department of Consumer Affairs.

Negotiating

When it comes to negotiating, always remember that the pawnbroker is not your friend. This person is trying to make a profit and will be looking for the best deal possible. However, this does not mean that you cannot get what you want. To get the best price for your item, be sure to do your research. Know what the item is worth and be willing to negotiate.

Come in with a reasonable offer and be willing to walk away if the price is too high. Remember, the pawnbroker wants your money and will likely lower the price if he or she thinks you are about to leave. On the other hand, don’t lowball the pawnbroker. This will only anger him or her and could result in you not getting the item you want.

How to deal with a pawn shop

Selling

When selling items at a pawn shop, it’s important to remember that you are not going to get retail prices for them. In fact, you can expect to receive only about 60-70% of the item’s true value. This is because the pawnshop has to make a profit on the sale, too.

Selling items at a pawn shop is a great way to get rid of unwanted items and make some extra cash. Just be sure to bring in an item that is in good condition and has been well taken care of. If the pawnbroker has any doubts about the condition of the item, he or she may choose not to buy it. Also, be sure to bring in all the original documentation and accessories that came with the item. This will help make the sale go more smoothly.

Buying the Pawn Shop Items

When buying items from a pawnshop, always remember that you are not getting them new. The item has been used and may have some wear and tear. However, this does not mean that you should not buy it. In fact, buying items at a pawn shop can be a great way to get a good deal on something you need.

There are a couple of steps you can take:

Shop around and compare prices. Just like you would at any other store, be sure to compare prices before making a purchase. This is especially important when it comes to big-ticket items.

Know what the item is worth. Do your research ahead of time so you have an idea of how much the item is worth. This will help you negotiate a better price.

Inspect the item carefully. Make sure that you inspect the item closely before purchasing it. Make sure there are no major defects, and that everything works properly. If there are any problems with the item, be sure to bring them up with the pawnbroker before purchasing it.

Ask about warranties or guarantees. Many pawnshops offer warranties or guarantees on their items.

How to deal with a pawn shop

Also, keep in mind that most pawn shops do not offer refunds or exchanges, so be sure you are getting what you want before purchasing it.

When it comes to getting a good deal at a pawn shop, knowing what to look for is key. Remember to do your research before making any offers and be prepared to walk away if the price is too high.

With these tips in mind, buying and selling at a pawnshop can be a great way to get rid of unwanted items and make some extra cash.

What is a pawn shop? Do you think pawn shops are scam operations? Pawn shops are typically depicted as shady, creepy, dusty places with suspicious, bearded men working behind the counter. Pawn shops, however, are typically clean, reputable establishments that help those in need of cash. But how do pawn shops work? In this article, we help you to understand what a pawn shop is and how they operate.

How Does Pawning Work?

Pawn shops are typically identified by three golden spheres (ancient symbols representing monetary success) which are suspended from a bar, usually above the shop’s main door. Before visiting a pawn shop, you’ll need to understand how pawning works.

What does it mean to pawn something? Pawn shops are usually small shops that offer secured loans to those who provide items of personal property as collateral. Most individuals who deal with pawn shops are looking for quick cash. But if the said property is pawned for a loan, and it isn’t paid within a contractual period (usually with interest), the pawned item will be offered for sale to other customers. Pawn shops also trade items in their shop for personal property brought to them by customers or give money for their items. Pawn shops can sometimes be a lifesaver for those with small debts.

Are Pawn Shops Well-Regulated and Safe?

How Do Pawn Shop Loans Work?

There are different opinions as to what a pawn shop is. When someone brings an item to a pawn shop—typically such small items as jewelry or electronics—they give the item as collateral. The broker examines the item and determines its value. Subsequently, the broker then may extend a collateral-based loan. If the loan is accepted, the broker will give a pawn ticket (receipt), which includes fees and expiration date.

After you receive the loan, you have around 30 days to reclaim items that you left by paying the determined value for the item, plus an interest rate. Again, if the loan isn’t paid within a contractual period, the pawned item will be offered by the pawnbroker for sale to other customers. Another option is for the customer to leave the item in the pawn shop and never return to reclaim it. This way there are no consequences; you just don’t get your item back.

Pawnshop Interest Rates

Key Takeaways

What Do Pawn Shops Buy?

What kind of items do pawn brokers typically accept? Pawn shops buy anything valuable and in good condition. But they do have some unwritten rules. Pawning jewelry is quite popular. Pawn shops accept jewelry in all shapes and sizes because they know that jewelry can be almost immediately sold for a fair price. Brokers, however, tend to accept gold jewelry before silver because it brings quick cash.

How Do Pawn Shops Determine Value?

When you bring a certain item to a pawn shop, the pawnbroker needs to determine the value of the item before he gives a loan. So, how do pawn shops determine value? Pawn shops base the value of an item on the current appraised value. They check whether the item is in good condition and then determine if they can resell it.

How Do Pawn Shops Work With Jewelry?

A pawnbroker first needs to determine whether the jewelry is genuine or fake. One simple test that pawn shops use is to place a magnet above the metal; if the metal is not attracted to the magnet, then it’s real. Then, they need to determine the purity of the item, which, of course, would affect its value and the amount of loan given. Finally, the broker needs to determine the weight of the item. Pawn shops have specifically designed scales only for this purpose.

How Do Pawn Shops Determine the Value of Electronics?

Pawning vs Selling

Are you new in the pawn industry and don’t know whether pawning an item is better than selling? When it comes to pawn vs sell, there are some pros and cons to consider.

Pawning

How does pawning work? When you pawn an item, you deposit (the item) with a pawnbroker as security for money lent.

The greatest benefits you get from pawning an item are that it’s quick and easy, and you can reclaim it, as long as you pay the loan back, including the interest rate. And it does not affect your credit score. Pawnbrokers can lend you larger amounts of money for flexible periods of time at a lower cost.

What will pawn shops buy? The downside of pawning is trying to understand what a particular shop would buy. And if you don’t pay back the loan in time, the pawn shop claims ownership of the item. What’s more, you cannot receive a loan of thousands of dollars but only a small percentage of the item’s worth.

Selling

Pawn shops are renowned for their ability to grant loans in a short period. But what about selling your item in pawn shops? For instance, is selling jewelry at a pawn shop worth it?

The greatest benefit you get from selling an item at a pawn shop is that you get paid a greater amount of money for your item than pawning it, with no additional fees.

Conclusion

Most people at some time in their lives need quick money, either to pay bills or simply put extra money in their pockets. The easy option of receiving quick cash without the complicated procedure of applying for a bank loan is dealing with a pawnbroker. We’ve examined the question: how does pawning work? We have concluded that pawn shops are not scams but are legitimate and well-regulated businesses.

Jewelry is the most commonly pawned item in the world. A common class ring is usually made of 92.5% silver or 41.7% (10 karats) gold. These are typically pawned for about $10.00 to $15.00 per gram.

A pawnbroker typically holds an item you pawn for around 30 days before you can reclaim it. In rare cases, some pawn shops may keep your item for 40 days.

What percentage do pawn shops give for a pawned item? Pawnbrokers tend to lend approximately 25% to 60% of the item’s resale value. You might even receive 50% for an item that is in demand. The higher the item’s value, the higher the percentage.

by Ace Bagtas

I learned a lot about finance after working for a digital marketing company specializing in investing and trading stocks, forex, etc. After that, I got exposed to other verticals such as wealth management and personal finance, which further improved my understanding of the financial world.

How to deal with a pawn shop

Being able to ‘haggle’ a little on the price of an item is one of the many perks of shopping at a pawn shop. Everyone loves to get a good deal and we want everyone to be able to! So… In the spirit of ‘haggling’, here are 3 tips that will help you get the best price when buying an item from a pawn shop!

Tip #1: Make a reasonable offer.

One of the worst things you can do when bargaining for a better deal is to start with an unreasonably low offer. Take in consideration that the pawn shop purchased this item in an attempt to make a profit. Throwing out a low ball offer could ruin the process from the get-go. Of course you want to start out lower than what you would actually pay for the item, but your offer should be high enough to be taken seriously!

Tip #2: Bring Cash!

Cash is king! This is true almost everywhere you shop, and pawn shops are no exception to this rule.

Do we take debit and credit cards? Of course we do! We’re certainly not against it either and will gladly accept it as a form of payment. However, when bargaining for a better deal, you stand a MUCH better chance of closing when you have cash in hand!

When you use a debit or credit card to pay for your merchandise, the store you are shopping at is charged a certain percentage for each and every swipe. This is one reason why bargaining with cash can help you land a better deal. If you pay with cash, the pawn shop won’t have to pay the fee, and instead can pass the savings along to you, the customer!

One more thing. When you start the bargaining process, and you’ve named your price, take your cash out and lay it on the table! People have an emotional attachment to cash. When the seller sees the money laying on the table, it’s almost too good to resist!

How to deal with a pawn shop

If you’re looking to buy a diamond necklace at a reasonable price, heading to a pawn shop isn’t a bad plan. But selling to a pawn shop is a whole other story.

In addition to selling a vast selection of engagement rings, discarded musical instruments, mismatched tools, and old tech items, pawn shops offer cash loans in exchange for your belongings.

Here’s how pawn shop loans work: You bring in an item as collateral, and the pawnbroker will determine the value of the item, give you a loan based on its cost, and then hang on to your collateral until you’ve paid off the loan. In a nutshell, it is one way to get a personal loan without a credit check.

The Appeal of Pawning

We’ve all been here once or twice: You need money now, but payday is still weeks away. Your credit isn’t great, which means you don’t qualify for any of those cash back credit cards , and your bills were due yesterday. It might seem like a good time to take that pearl necklace you inherited from your grandmother to the pawn shop and get a loan — but is it worth your trouble?

With pawnshop loans, you stand to lose the item you left with the pawnbroker.

Depending on what you put up for collateral, that could be a big loss for you. If you’re a freelancer who trades in their laptop, for example, you may not be able to work if you’re unable to pay back your loan. Give up something of sentimental value like a family heirloom, and you could be kicking yourself for defaulting on that loan for the rest of your life.

While a pawn shop loan might seem like a good idea in theory, in practice it can be an expensive and risky proposition. If you’re considering a pawn shop for your no-credit-check loan needs, do yourself a favor and read up on the risks first. Here are five reasons you may want to keep your belongings out of a pawnbroker’s hands.

1. Pawn shops loan amounts

During the 2019 U.S. government shutdown, The New York Times reported on a pawn shop in Alexandria, Virginia that was only able to give a family dealing with the repercussions of the furlough $75 in exchange for their 60-inch, high-definition, flat screen television. They were hoping to get at least $200 for the trade.

Pawnbrokers typically give out small loan amounts even if the item you are pawning is worth more. If that necklace from your grandmother is worth $800, you probably aren’t going to be able to secure an $800 pawnshop loan. In fact, most pawnbrokers will offer you a loan amount that’s just a fraction of your item’s value; according to the National Pawnbrokers Association, the average pawnshop loan is $150.

Imagine this: You put down your brand new iPad as collateral for a $100 loan, but you just can’t pay it back on time. How much did that iPad cost you in the first place? Unless it was made out of balsa wood and spray paint, your device probably cost quite a bit more than $100.

2. The cost to benefit ratio

If you want to get your item back, you’ll have to pay back the loan – plus interest – before your loan term is up. The amount of interest and fees a pawnbroker can charge varies from state to state, but it can be pretty high.

The longer your loan term, the more money you’re going to be paying your pawn broker to get back an item that you’ve already purchased. Think about that iPad again for a moment. You paid $700 to buy it. Then you pawned it for $100, and ended up paying $115 back to the pawnbroker before you could reclaim it. Now you’ve paid more than the original price for that iPad.

You may even have the opportunity to extend or renew your pawn loan, but remember: The more you pawn something, the more you end up paying for it in the long run.

3. You could lose your belongings

While the National Pawnbrokers Association estimates that nearly 80% of all pawn loans are eventually paid back, there are places in the country where the pickup rate for pawned items is far lower. That means many people who give up their belongings for quick cash are not able to get them back. Ask yourself: Is it worth risking sentimental family heirlooms for a small cash loan?

4. Some pawnbrokers operate illegally

Most states have strengthened pawn shop loan regulation, but that doesn’t mean all pawnbrokers are following those laws. In recent years, there have been many reports of pawn shops charging more than the allowed APR rates, asking people to sign illegal contracts, and deceiving customers about the actual price of their loans.

In fact, in January 2017, the U.S. Consumer Financial Protection Bureau accused three pawn shops in Virginia’s Fredericksburg area of operating outside the law. An article from Fredricksburg.com said the companies in question “understated the annual interest rates on their loan contracts by as much as half, according to three separate lawsuits filed in the U.S. District Court for the Eastern District of Virginia.”

A lawsuit was then filed against the pawn shops by Virginia Attorney General Mark Herring, and two out of three settled in March 2017, agreeing to pay more than $62,000 in refunds to more than 1,000 former customers.

5. There are better alternatives

When you find yourself in a tight personal finance spot, it might seem like you have an obligation to take out a costly pawn shop loan if your options are limited. But you deserve better than a pawn shop loan, and chances are, you don’t have to settle.

Even people with bad or no credit may be able to qualify for an online personal installment loans , which are a more strategic alternative to other types of loans. Personal installment loans may be a better alternative for a number of reasons:

  • First, they can help improve your credit, as on-time payments are typically reported to the credit bureaus.
  • Unlike with payday, title or pawn shop loans, installment loans typically have longer terms and set payment that you can actually afford.
  • You’ll know before you sign any contract how much you have to pay every month and how long it will take to pay off the loan.

Don’t risk losing your precious property. Educate yourself before you jump into a pawn shop loan, and make a choice that will benefit both your family and your bank account.

This blog post was updated April 26, 2018, and again December 14, 2019.

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How to deal with a pawn shop

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Established Pawnshop since 1949 – We offer the best price for your product

We will purchase your product by assessing on sight and pay you by cash. If you take our offered price, the deal is closed and the ownership of the product will transferred to us. If you do not accept the price, you can bring your product with you and will not have to pay anything for the assessment.

If you:

  • Would like to get rid of the product for cash
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  • Have something you don’t use but has value and don’t want to throw away

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How to deal with a pawn shop

Please come to our store with your product.
If you visit us for the first time, please bring your ID.
You must be 18 years old or older by law.

How to deal with a pawn shop

Your product is assessed on sight. We will tell you our offer for the product.
We will give you our best price. If you do not feel comfortable about the price, you can bring back your product with you. Whether the deal is agreed or not, there is no fee for assessment.

How to deal with a pawn shop

【First Time Customer】Please show us your ID

(Driver’s License, Health Insurance Card, My Number Card, Basic Resident Register Card, Passport, Resident Card, Special Permanent Resident Certificate, etc.)

【Fill out Contract Card】

Fill out Name, Address, Date of Birth, Occupation

How to deal with a pawn shop

We will pay you on sight in cash. The ownership of the product will be transferred to us by law. We will not be able to give you back the product once the deal is finalized. If you do not want to let go of the product, we recommend using the pawn system.

We will take:

  • How to deal with a pawn shopBrand items
  • How to deal with a pawn shopwatch
  • How to deal with a pawn shopplatinum
  • How to deal with a pawn shopgold
  • How to deal with a pawn shopjewelry
  • How to deal with a pawn shopcamera
  • How to deal with a pawn shopmusical instrument
  • How to deal with a pawn shopkimono

In addition, we will also purchase electric appliances, gift certificates, commemorative gold coins, coins, and various bank notes.
Gold and platinum will be purchased at the purchase price x g (weight) on that day. We will take broken items, old items , or even a small amount of pieces.
Associated diamonds, jewely, coins will be assessed as + α.

How to deal with a pawn shop

Pawn Shop Dos & Don’ts, Part 1

  • Post author: Common Exchange Pawn
  • Post published: April 18, 2016
  • Post category: Pawn Shop
  • Post comments: 0 Comments

Pawn Shop Dos & Don’ts, Part 1-Getting a collateral, or pawn, loan couldn’t be simpler…all you need is a valid form of identification and an item of value. But we’d like to make it even easier with a list of major Pawn Shop Dos & Don’ts to consider before heading down to the pawn shop.

Pawn Shop Dos & Dont’s, Part 1

Do come prepared:
Whether selling or pawning, the best way to ensure maximum value for your item is to do your homework. For instance, if you’re selling or pawning gold coins or jewelry, knowing the history of your piece, the manufacturer, its karat weight, and the current market price will put you in a position to not only get top dollar, you’ll also feel confident you’ve gotten a great deal.

Do expect a clean, professional environment:
Pawn shops have a largely underserved reputation as being a bit shady. These days, however, nothing could be further from the truth. If the shop you visit is anything other than well-organized, well-lit, secure, and staffed by a courteous and knowledgeable staff, it’s best to take your valuable business elsewhere.

Do make sure your pawn shop is reputable:
While the overwhelming majority of pawn shops are worthy of your trust, let’s face it, there are a handful that aren’t. That’s why it’s a good idea to ask around and even look up your local pawn shop on a consumer advocacy website, such as the Better Business Bureau. At Common Exchange, fair dealing has been a cornerstone of our philosophy from the outset. That’s how we’ve stayed in business for nearly 25 years, have expanded to eight locations throughout British Columbia, and have a customer satisfaction rating of 97%.

Do make your item look its best:
Whether selling or pawing, if you want to get the most cash for your item, it’s definitely worth taking a bit of time to give your item a pre-pawn makeover. So whatever you’re considering bringing down to the shop, wipe it down, clean it out, and freshen it up. Plus, items tend to look particularly good if they come to us in their original packaging. Also, if your item has cords or attachments, be sure to bring those as well.

Do take care of your pawn ticket:
If you secure a pawn loan, you’ll receive a ticket or receipt along with your cash. Don’t lose it! This ticket not only includes a description of the item you’ve pawned, it also contains important information regarding the terms of your loan, such as the interest rate and expiration date. So be sure to put it somewhere safe. If you’re looking for some added insurance, take a picture of it with your smartphone and email the snapshot to yourself.

Now that you’re familiar with some of the major Do’s, we’d be remiss if we didn’t also address some of the big Don’ts, as well. Stick around for those in our next instalment.

How to deal with a pawn shop

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How to deal with a pawn shop

How to deal with a pawn shop

How to deal with a pawn shop

How to deal with a pawn shop

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4 Things You Can Sell at Pawn Shop When You Need Fast Money

Are you in need of cash in hand today? You’re in luck if that’s the case! We’ve compiled a list of products that are commonly purchased by pawn shops. If you own one of these items, you’ll have a lot of luck selling it. Continue reading to discover whether you have.

The Dos and Don’t’s of Getting Top Dollar When Selling Your Gold, Silver, and Other Jewelry

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