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by sitecore\kmcgrigg on July 19, 2011
Recent reality TV shows like "Pawn Stars" have brought a lot attention to the pawn industry.  While the mainstream media attention may be new, the industry is not.  In fact, the history of pawn shops dates back more than 3,000 years. 

According to the History Channel, the pawn shops of today operate as mini-banks for millions of unbanked Americans and they also serve places for people of all backgrounds to buy and sell items. America’s 12,000 or so pawn shops deal with a huge variety of items including musical instruments, jewelry, and electronics.

What does pawning mean?

“Pawning” means that you give the pawn shop an item in exchange for a cash loan. For example, you might give them your mountain bike as collateral for a $75 loan.  If you repay the loan by a certain date, typically 90 to 120 days after you pawn the item, you can retrieve your bike.  The loan repayment amount will include interest and fees that are regulated by the state.  

If you don’t repay the money on time, the pawn shop takes ownership of the bike and can offer it for resale.  Most of the items pawned (about 70%) are reclaimed by their owners and according to the National Pawnbrokers Association’s 2010 Trend Survey, the average pawn loan is $100.  Pawn shops also purchase items outright to resell.

Working with a pawn shops can be a good deal for both a seller and buyer, but not always.  Following are some tips for selling and buying at a pawn shop.

How to Sell to a Pawn Shop

  1. Find the right pawn shop. Do some online research to see what others have said about working with area pawn shops.  Then, choose a reputable shop and broker you feel comfortable with.  Also, know that some pawn shops specialize in certain items.  For example, if you have an antique, look for a pawn shop that has experience buying and selling antique items.
  2. Know if you want to pawn or sell.  Pawn shops will give you the choice, so educate yourself on the options and know the ups and downs of each before you go in. The decision should be based on a number of things including your ability to repay a loan and the value you place on the item you are pawning or selling.
  3. Negotiate. Understand that pawn store owners are resellers, not collectors.  Just because a collector values your vintage vinyl at $100, doesn’t mean that you will get that from a pawn broker.  Set a minimum price ahead of time so you don’t make a snap decision you’ll regret later.
  4. Be prepared to prove your claims.  For example, if you bring in a valuable piece of jewelry, consider having a professional jeweler write up an appraisal so you can prove the piece’s worth.  If the item runs on batteries, make sure it has fresh batteries in it so you can show that it works.  Bringing items in their original packaging is always helpful.
  5. Show things in their best light.  A layer of dust might make sense on an antique, but not on your printer. Imagine that you were going to purchase the item—what would you want it to look like?
  6. Pay on time.  If you pawn an item for a loan, be sure to pay back the loan plus interest and fees on time and as agreed.  Not doing so will cause you to forfeit your item or extend the loan which will carry additional charges.

How to Buy From a Pawn Shop

  1. Do your research.  It doesn’t matter what an item costs when it is new; some things hold their value much more than others.  Know the value of an item in its existing condition before you make a purchase.
  2. Negotiate.  Every item will have a price, but the sticker price should just be considered your starting point.  Pawnbrokers have a lot of experience negotiating, so make sure you have a limit in mind before you begin bargaining. Also, understand that, in general, the longer something stays in the store, the more the pawnbroker will be willing to lower the price.
  3. Read the fine print.  Some pawn shops offer guarantees of authenticity, but others do not.  Some have lenient return polices while others say “all sales are final.”  The policies can range widely, so read the policies carefully.    
  4. Pay with cash.  The pawnbroker might be more apt to take your offer if you are paying with cash.  Plus, paying with cash will assure that you don’t go over your set limit and will keep you from accruing credit card debt.

Finally, whether you’re a seller or a buyer, it is worth your time to consider your other options before going to the pawn shop.  While working with a pawn shop may be convenient, you might be able to get a better deal on Craigslist, eBay, or even in a garage sale.

Posted in:  Extra Income, Shopping


Antoney says:
July 20, 2017

No one has wrote about the written policy of Pawn Shops. You should confirm the return policy before buy something from pawn shops.

ashley says:
July 27, 2015

I've been thinking about pawning off some of my jewelry for a loan. We're behind on our mortgage payment, and I need some extra cash. Hopefully, the promotion they are offering me will help in the future, but for now I just need to get some extra money.

Carl Applewhite says:
July 21, 2011

I did not know about pawn shops. This will help me. Thank you!

Cheryl Smith says:
September 18, 2015

I like the tip about proving what you have. I always like to get a professional's opinion before I pawn anything. That way I know I'm getting the best deal possible.

Cindy Tesler says:
November 08, 2016

You make a good point in stating that pawn shops of today operate as mini-banks for millions of Americans. You also mention researching online for reviews on pawn shops in your area to find a reputable one. I think it's a good idea to trade in your old or broken jewelry at a loan service so that you can get money for the old jewelry that you aren't wearing anyways!

Anonymous says:
May 05, 2015

It is certainly true that pawn shops have gotten more exposure and attention as of late thanks to television. I would say that I see this as a good thing, as it has allowed people to get a better idea of what pawn shops really are. I've felt in the past that there was a negative perception surrounding them, but, as the article discusses, there are certainly very reputable pawn shops.

Daniel says:
April 22, 2013

Probably you should pay a fee every month just to extend your pawn. Something like that may have in the contract.

Daniela Adams says:
December 04, 2015

I really appreciate your advice about researching pawn shops. I have some items I want to pawn, but I've never done it before. I didn't realize that it's better to look for places that specialize in certain items. I will keep your tips in mind.

David says:
July 09, 2014

Thank you for the tips, this would be really helpful.

Dean Baker says:
August 06, 2015

This is a great guide to those who are going to pawn or sell their things at the pawn shop. Keep up the good work on this blog :)

George says:
August 13, 2011

My college room-mate was always pawning stuff and reclaiming later. For him it worked well, as it probably does for many others. This advice seems good and I've never seen it on other personal financial advice sites.

Jake Long says:
July 10, 2013

I love the show pawn stars, but I was never good at getting great deals at a pawn shop. I usually try calling around to see what offer is the best. Thanks for this article. It will definitely help me in the future.

Jasper Whiteside says:
November 18, 2016

I like the advice to use the internet to narrow down your search. It can be quite difficult to go from shop to shop to see which one will give you the best price for your items. If you can do a little research online and find what items they specialize in, it can shorten your search.

Jessy Shaw says:
August 14, 2015

My husband and I have been wanting to sell some things before we move out of state and I think that the pawn shop is the way to go. I have been researching different tips for the whole process and getting the most out of whatever it is you are selling. These tips have helped immensely and I am really confident that we will have a good experience. Thank you so much for sharing this advice and insights!

Kelsey Higgins says:
April 16, 2015

Great tip about doing your research! You can find some pretty neat stuff in pawn shops, but I would agree that you want to make sure you know the value of it. My husband loves going to pawn shops, but he's always very cautious about researching things before making purchases.

Lawan Garris says:
September 06, 2012

Can a pawn shop take your item. If you had a hold placed on it. I was given a hold date on the 20th of August 2012 for September,5 2012. When I came in on the 5th of September.The pawn shop sad they sold my item on August,22 2012. Can they just steal my item like that. I think it was a inside job. Can someone please give me some feedback on this please.

Mike Loshe says:
September 11, 2013

Thanks for the share. I recently have run into some finical troubles and have been looking into getting a pawn shop loan for quite some time. This article definitely answered a bunch of questions I had regarding the whole process. Thanks again!

Paul Broni says:
July 21, 2011

I have always thought that most pawn transactions (true pawn, not selling to a pawn shop) could be done away with if only people could manage their cash just a little bit better. I think there are people who just live their lives pawning and claiming the same items over and over again, all because of some minor timing differences between their cash out and their cash in. It would be nice if there were a way to counsel these people so that they could break the cycle, but I guess there's no money in that, is there...

Sandra Sage says:
February 05, 2015

Thanks for this post! This was really helpful to me. Keep up the good work on this blog!

Sarah Smith says:
April 03, 2017

I had no idea that when selling to a pawn shop you should be prepared to prove your claim. That way, you can get the price you want. Another thing to do is to find a pawn shop that has a good repuation, since then you can know they are trustworthy.

Tara says:
March 21, 2014

I've never had to go to a pawn shop before so this is really helpful. I've been thinking about pawning some old jewelry I don't need anymore. It's been a rough month without a job so I thought that could help get me some extra cash.

Thiago says:
October 30, 2013

This is a great set of tips. I have a friend who has been considering trying out the whole "pawn scene", and our pawn shop in Calumet City IL probably has the best reputation I've heard of any pawn shop. This should really help, thanks!

TypeHere says:
February 03, 2012

The effectiveness of pawning will always depend on the customer. That's all!! :)

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