Pawn Shops: What Are They?

As you go about your daily driving, look around at your local stores. You may notice that you have a pawn shop in your neighborhood. If you have not been inside a pawn shop, you may wonder exactly what they are and how they work. So, we decided to ask the question, What exactly is a pawn shop?

According to Wikipedia, “a pawn broker is an individual or business (pawn shop) that offers secured loans to people, with items of personal property used as collateral“.  In most pawn shops, a customer brings items in that they either no longer want or items that they would like to get money for at the present moment. The pawn broker will offer them money for the items, usually significantly less then the market value might dictate.  The owner then has a set amount of time, usually 1-2 months, to come back and claim their things. There is usually an additional fee that is due prior to repurchasing the items.

Pawn shops are not a new concept. They date back as far as Ancient Greece. However, the rules have changed over time as to how pawn shops work. Pawn shops cannot sell an item before the specified date when a customer can redeem it.  However, if someone really wants to purchase the item, the pawn shop may call the owner to try and procure a sale. Because the demand for that item is now higher, the owner may end up getting more money for the item.

Pawn Shops: Fact or Fiction

5 Reasons Pawn Shops are Not What You Think

Have you ever stopped and gone inside or thought about visiting a pawn shop? If your answer was a quick no, ask yourself why you feel this way. In today’s society, there seems to be a stigma against pawn shops. Here are 5 common misconceptions regarding pawn shops.

Reason #1: Pawnshops are shady and in a bad part of town. Unfortunately, many people have this image of pawnshops. The truth is that this is a stereotype perpetuated more by Hollywood than anything else. Pawn brokers work very hard to make their establishments clean, friendly and inviting. They are not found only in “bad” areas riddled with crime. Take a look around the next time you are out running errands. You will be surprised that there are pawnshops in just about every kind of neighborhood.

Reason #2: Pawn brokers are only out to get your money. Pawnbrokers work hard, just like any other business owner. Sure they have their bottom line. However, they are providing a service. They are lending money to people in exchange for their goods. You must remember that the pawn broker is taking a chance giving you money for your items. They must wait before they can sell them and even then, there is no guarantee that the items will sell.

Reason #3: Pawn shops are full of stolen goods. Federal & State government regulates pawnshops. Every item brought into a pawn shop has its name, description and serial number entered into a service called LeadsOnline. This is a national database accessible to police departments resulting in very few stolen goods brought into pawn shops.

Reason #4: The merchandise in pawnshops is very low quality. Pawn brokers know that they need to ensure the quality of their goods. If they get a reputation that little to none of their items are of good quality, customers will not return to their establishment. Often times their items are like new & have never been used.

Reason #5: The clientele that frequent Pawn shops is questionable. From men to women, young to old, all races, and all income levels, the clientele is as diverse as any business. The reasons that people decide to use pawn shops vary widely. However, the truth is that people from all walks of life do business at pawn shops.