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Tips for buying & selling at a pawn shop

MMI Copywriter

By Kim McGrigg, MMI Community Manager

Recent reality TV shows like "Pawn Stars" have brought a lot of 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 as 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. 

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

Tips if you have items to pawn

  1. Find the right pawn shop. Do some online research to see what others have said about working with area pawn shops.  Choose a reputable shop and broker you feel comfortable with based on your research.  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. The decision should be based on 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 won’t make a snap decision you’ll regret.
  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.

Tips if you want to buy a pawned item

  1. Do your research.  It doesn’t matter what an item costs when it is new; some things hold their value better 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 only be considered a 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 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.

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Young adults using credit cards to boost self-esteem


A recent article on reveals that many young adults get an intense adrenaline rush when using credit to finance the lifestyle of their dreams.

The article suggests that access to credit makes them feel they are prepared to meet the challenges of the future. The article is derived from a recent study performed by Ohio State University: Youth debt, mastery, and self-esteem: Class stratified effects of indebtedness on self-concept.

The study concluded that when young adults from poor and middle class backgrounds used student loans and credit cards to finance their lifestyles, "they felt a temporary but powerful boost in self-esteem and in feelings of mastery over their environment."

The results of this study aren’t surprising. Young adults have the second highest bankruptcy rate in the nation and the average indebted young adult spends almost 25 cents per dollar on debt payments, according to a study by Demos.

While having and using credit is useful, measuring your self-worth by your credit limit can lead to a burden of financial turmoil.

Below are five ways to use credit responsibly and establish healthy financial habits to insure financial wellness later in life. One of the best self-esteem boosters is providing for your financial future and building a solid nest egg.

  1. Only purchase items on a credit card you can afford to pay back within three months. For larger purchases, consider saving for it or commit to a strategic payment plan if using credit is necessary.
  2. Don’t exceed your credit limit. Most financial experts, such as Money Management International, recommend not using more than 30 percent of your credit limit. Anything over that can lead to a mountain of credit card debt.
  3. Pay more than the minimum amount due. One method to pay off a balance in a reasonable time frame and avoid excessive interest is to multiply the minimum payment due by three and pay that amount.
  4. Don’t miss a payment. Do whatever you can to remain current on bill payments. Consider using calendars, agendas, and to-do lists to remember credit card due dates. Missing a payment can lead to late charges and other fees.
  5. Know and understand the interest rates on each credit card. Make sure you are aware of interest rates, over limit fees, rewards, and points, etc. A better understanding of your terms will help you make better financial choices.

 If you are dealing with using credit card to boost self-esteem, you might also be interested in reading "From spendthrift to saver" to learn the warning signs and get solutions to control shopping temptations.

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About Money Management International

Money Management International (MMI) is a nonprofit, full-service credit counseling agency, providing confidential financial guidance, financial education, counseling, and debt management assistance to consumers since 1958. MMI helps consumers trim their expenses, develop a spending plan, and repay debts. Counseling is available by appointment in branch offices and 24 hours a day, 7 days a week by telephone and Internet. Services are available in English or Spanish. To learn more, call
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