10 Secrets About Dealing With Pawn Shops

Posted by stevekrupniki1

April 12, 2008

Pawnshops have been around for thousands of years and in that time, not much has really changed about the business.

Even though many modern pawn shops now offer a variety of services and merchandise to their customers, the majority of people that do business with a pawnbroker still come to them for one of three distinct reasons.

The first and most important reason is that a customer is seeking a short-term loan on a piece of personal property that they wish to pledge. Pawn broking is the original form of consumer credit and offers quick and convenient collateral based loans. The pawnbroker will store your item for you until you come back and repay the loan. If you choose not to repay your loan within the specified time, the pawnbroker will sell your pledged item and you owe them nothing.

The second reason is that a customer may be looking to sell a possession that they no longer need. If the item is something that the pawnbroker can resell in his shop, he can give a quick and convenient evaluation and offer to purchase the possession from the customer.

The third reason is a customer may be looking to purchase items from the pawn shop. Pawnbrokers offer a wide variety of merchandise for sale at bargain basement prices. Here are 10 little-known secrets that you should consider before dealing with any pawn shop:

1. The pawn broker wants to loan you money. The more you need the more he likes it. This is the main way that he derives income from his business. As with any other credit product, when it comes time to repaying your loan there are fees involved. Obviously, depending on the length and amount of your loan, you will be paying back more money than you borrowed. Make sure that you fully understand the length of the loan contract and all related finance charges before taking out a pawn loan. And make sure that your loan document clearly describes the personal property that you pledged.

2. Do not worry about your personal property when it is in possession of the pawnbroker. He is an expert at safely and securely storing your merchandise. The pawn shop wants you to be able to come repay your loan and get your item back and then pawn it again whenever you need the money. The pawn shop also realizes that you are not obligated to repay the loan and they might end up owning your merchandise. Plus, if your personal property is damaged or stolen while in possession of the pawnbroker, they are responsible for replacing it.

3. Don’t expect a pawnshop to be able to loan you money on everything that you bring into the store. While the pawnbroker wants to loan you as much money as they can and especially as much money as you need they are basing the loan strictly on the fair market value of the item you pledged. The best property that you could choose to pawn would be something that’s easily valued, easily stored, and does not have a shelf life. This could include fine jewelry, coins and currency, high-grade firearms, and high quality tools and musical instruments.

4. Some of the worst personal property that you could choose to pawn would be items that easily become obsolete, property that is extremely difficult to store, or cheaply made items that are constantly going on sale. After all, if the big-box store down the street is selling that new DVD player for $40, what’s it going to be worth in a couple of months. The pawnbroker must take all of this into consideration when offering you a loan. They look at how easily and quickly the property will sell if you do not return and repay your loan.

5. If you must offer consumer electronics as a pledge make sure you bring everything that came with the items. Remote, cords, accessories, chargers, software, and anything else related to the product. Including any books and manuals might get you a few extra dollars on your loan. And forget about trying to pawn anything that is damaged or broken. The pawnbroker will examine your items carefully and make sure they work properly before ever offering you any money. He’s not running a garage sale, he has a business to maintain.

6. If you want to sell your personal property and have no intention of coming back and getting it make sure the pawnbroker knows this up front. Many times, pawnbrokers will offer more money for purchasing something out right. If your item is clean, easy to sell, and in demand, the pawnbroker knows that he can turn his money quicker and can offer you more. Also, if the pawnbroker is interested in purchasing your item, they should give you a price. Don’t fall for the HOW MUCH DO YOU WANT FOR IT line. They know what it’s worth to them. If they refuse to make you an offer you don’t want to do business with them anyway. They are stealers, not dealers.

7. Expect to be asked some questions that you might think are a little unusual. The pawnbroker will ask you enough questions about your property to become comfortable with the fact that you own it. Do not be offended, the pawnbroker is just trying to make sure that both you and the property are legitimate. Remember, the pawnbroker wants to do business with you. So make it as easy as possible for them to do so. Also, if you do business with the pawnbroker expect to have to show a government issued ID. It is required.

8. Do not even consider trying to pawn or sell any property that does not belong to you. Contrary to what is portrayed in the media, pawnshops do not want to deal in any stolen merchandise. And even if you get through the pawnbrokers screening process the pawnbroker will ask you for identification and have you sign either a pawn ticket or a bill of sale. In turn, the pawn shop is required to report the transaction to the local police department. This is usually done electronically. A pawn shop will not think twice about prosecuting a thief.

9. If you are looking to purchase an item at a pawn shop make sure and ask all the right questions. The pawnbroker should know the approximate age of an item and the approximate retail replacement cost. If the item is clean and popular you should be able to purchase it for about half of what it would cost new. This basic rule might not always apply to items that are in high demand. If the pawn shop looks more like a junk museum than a retail store, there is a reason for that. There are still a few out there that don’t know how to merchandise or price their goods properly. I’m not saying that a bargain cannot be had, but buyers beware. Always ask about guarantees and returns.

10. Keep in mind that there are a growing number of people who actually make money buying items at pawnshops. These people know that the majority of the population has never been into a pawnshop nor will they ever be. These customers, known as vest pocket dealers in the trade, are constantly rummaging through pawn shops looking for items that they can resell at a greater price. They may resell the items at a different retail location, in a private sale, or on the Internet. And these customers usually receive the biggest discount at a pawn shop because they buy in quantity. So when you purchase items in a pawn shop, don’t ever be scared to ask for a discount. It’s usually expected.

Following these little secrets will help to make your pawn shop experience the best ever. Whether you’re in need of a short-term loan, want to sell some merchandise, or are looking for a bargain, these little tips will apply to nearly any pawnshop. Keep them in mind and have fun dealing with your local pawnbroker.

Stephen Krupnik, a pawnbroker for 30 years, teaches, coaches, and consults for the pawnshop industry. Contact Steve at support@cloudteninc.com or for more information and FREE tips on a career in the pawnbroking industry, please visit http://www.PawnShopPerformer.com/

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