What Happened To The Old Pawn Shops Myth?

Example of typical U..S. pawn shops

Everything I used to know about pawn shops came from old black and white movies. I thought they were dark and dingy, run by old men wearing green visors who dealt in stolen goods on the side.

I finally had the nerve to go into a pawn shop one day while bargain hunting. Okay, I didn’t just go in, I peeked in, afraid of finding Edward G. Robinson in a bad mood.

What a shock!  It looked like any small retail store.  It was well lit, well merchandised with really nice things, and people seemed normal.

I was blown away seeing my neighbor, who’s a doctor, and his wife the CPA, shopping for a quality guitar.  What happened to the smarmy characters and the sinister music in the background?

I’ve since been bargain hunting in many pawn shops and discovered the truth behind the myth. Here’s what I’ve learned:

Pawn shops have been around for 3,000 years.  They’re found all around the world, and family owned businesses are common.

 

         Pawn definition

                               Pawnbroker definition

Pawn Shop Loans

Pawn loans are a type of collateral loan.  You put up your personal property for collateral, you get a short-term loan. You can reclaim your property when the the loan, plus interest, is paid back.

If the loan isn’t repaid, the pawnbroker simply keeps the collateral, and therefore the loan is considered paid.

Pawn shops are safe and secure.  Like all financial institutions, they’re regulated by federal, state, and local laws.

No credit check is necessary because it’s a collateral loan, and all personal information is confidential. You won’t find any hidden fees, either.

Think pawn shops deal in stolen goods, and pawnbrokers are ‘fences’ in the underworld? You’ll have to re-think that because pawnbrokers work very closely with law enforcement agencies, local and federal, reporting all transactions. Knowing how to spot stolen goods is training all pawnbrokers get. Less than 1% of items are questionable.

Each state has different regulations for pawn shops and set both a maximum amount for a loan and the length of a loan.  This includes extensions for loans where more time is needed for repayment.

Pawn shop agreement

Selling To A Pawn Shop

Everything on the display floor being family jewels someone couldn’t afford to reclaim is a misconception.  In fact, the vast majority of people reclaim their property. Much of what you see for sale are things pawnbrokers buy outright.

I’ve advised several people to look into selling valuables at a pawn shop instead of online when the online competition was way too high. They didn’t have to put the work, time, and money into listing their things and getting nowhere.  They found the sale was fast, friendly, and they were very happy with their profits.

Include Pawns Shops When You’re Treasure Hunting

Pawn shops can be fun and interesting places to hunt for bargains. They deal with a lot of different merchandise besides jewelry.  You can find electronics, musical instruments, sporting equipment, computers, t.v.’s, phones, power tools, firearms, all things gold and silver, coins, other collectibles, and more.

Unlike some other resale venues, you don’t have to sift through the junk to find a jewel.  Pawnbrokers only accept things they know have value, and that they’ll be able to sell.  Merchandise is clean and usually guaranteed to be in good working order.

Most resale stores won’t hold anything for you more than a few hours, but many pawn shops even offer you a layaway plan, and they take returns!

Feel free to haggle away!  It’s both accepted, and expected, at pawn shops.

My experience with pawn shops has been mostly been positive, but like any other type business, there are exceptions to the rules.  The biggest complaint about pawn brokers seems to be attitude.  Some people feel as if their looked down on when they want a loan, but I wonder how much comes from their own attitudes.

As Seen On T.V.

There have been no less than 8 reality t.v. shows since Pawn Stars aired in 2009. If you’ve ever watched one, you’ll know they have crazy characters, and wild things happen. Are the shows scripted?  I don’t know, but I question how much drama is staged because I’ve never had any experience at a pawn shop that wasn’t like shopping at any other resale store.

If you decide to investigate pawn shops to buy, sell, or to get a loan, it pays to shop around.  Interest rates and prices vary.

There’s one thing to be cautious of. If you’re seen walking in with a tuba and walking out empty-handed, it doesn’t take a genius to figure out you have a wad of cash.  Be alert.

For more information:

Pawnbrokers and firearms

Consumer Financial Protection Bureau

Search for specific laws in your area under pawn shops in your state and city.

Read More more Thrift Store Insider articles to get more tips on all types of resale!

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