How Does a Pawn Shop Work

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      It could happen to anyone, and it could happen in a flash.  You need cash, and you need it quickly!  The reasons are too numerous, however, e.g., rent, food on the table, car trouble, medicine or medical bills, the anniversary gift, etc; the list goes on and on.  Where do you turn?

    Have you considered a pawn shop? No? In today's world, it's likely someone you know has turned to a pawn shop, at some point, to obtain the cash needed when in a similar situation. You may have heard or seen some unflattering things about pawn shops. However, today's pawn shops are not the shady, scary places often depicted in the media, movies, or even reality television shows. The truth is, pawn shops are governed and regulated by all of the major federal laws that apply to entities designated as financial institutions, in addition to state and local laws. Additionally, pawn shops that deal in firearms are regulated by the federal Bureau of Alcohol, Tobacco, Firearms, & Explosives, commonly referred to as the ATF, and may also be Federal Firearm License holders. Today, the vast majority of pawn shops are clean, well-lit stores, operated by people who take pride in their work and provide good customer service.

HOW DOES A PAWN SHOP WORK?

     A pawn is another way to describe a collateral loan or, in other words, the pawnbroker will lend you money on items you personally own. Pawn shops lend money on items of value, such as gold and diamond jewelry, watches, coins, musical instruments, electronics (computers, televisions, etc.), firearms, household items, designer fashion items, and much, much more.

     A person brings an item into the store, and it will be evaluated for authenticity, condition, and/or working order. Then, if the pawnbroker is interested in your item(s), a loan amount may be offered. Negotiating this offer is often commonplace, and the dollar figure offered may be as much as 80% of the value of the item, but the ACTUAL VALUE will be determined  by demand in the current marketplace.  Keep in mind that you are taking out a loan with the intent to reclaim your property. You are NOT SELLING your item(s), and there is NO credit check.

     With the loan amount now mutually agreed upon, the pawnbroker is legally obligated to confirm you are the legal owner of the property, and you will be required to provide a government issued ID. You will receive a pawn ticket, showing a full identifying description of your item(s), the amount borrowed, the amount due at pickup, and an expiration date of the loan.

     All pawned items will remain at the pawnshop until the loan is repaid. Jewelry, precious metals, and firearms are stored in a vault, whereas other items are securely stored, out of sight, on shelves in the rear of the store.

     There is no obligation to repay the loan, should you later decide not to reclaim your item(s).  Aside from forfeiting your item, there are no other consequences. You will not receive a call from a collection agency, nor will it be reported to credit bureaus, or affect your credit in any way. On average, approximately 75% of loans are reclaimed, according to the National Pawnbrokers Association.

     Also, should you prefer to sell your item(s), instead of taking out a loan? No problem; we do that too!  It's a similar process to the above, however your ticket will show you sold the item(s), with no reclaim option, and it will not reflect any fees or expiration.