There are three things that happen in any pawnshop hundreds of times every day:
- People borrow money by putting up something they own as collateral.
- People sell used merchandise.
- People buy new and used merchandise.
Have you ever been to a pawnshop? For a lot of people who have never been to a pawnshop, you may be missing out on some great bargains. Our pawnshop is a lot like a Fine Jewelry store,an Estate sale, a Gunshop, a Video & Music store, a dozen garage sales and a flea market all rolled into one. Pawnshops also play an important role in many communities by providing people with an easy, fast way to borrow small amounts of money.
What the pawn shop in modern times cannot do is sell the item before the specified date when a customer can still redeem it.
Sometimes the pawn shop offers people an opportunity to merely sell their items, which gives the pawn shop, in most cases, the ability to sell something right away. People who sell instead of pawn their items usually get slightly more money for the sale.
Still, the pawn shop usually offers far below market rates for anything that is pawned. This is because it can—many people who must pawn something and can’t wait to sell it at market value are in desperate need of the money. Further, every purchase is a venture. The pawn shop might end up with an item they can’t sell or don’t sell for the price they want. Therefore, the lower than market value price may offset money lost on items that never sell, and also help to support the pawn shop staying in business.
In the US, there are strict rules regarding the running of pawn shops, the length of time a pawn broker must wait to sell an item, and sometimes even the percentage of the market value at which an item can be pawned.
- You bring in something you own and give it to the pawnbroker as collateral for a loan (this act is called pawning).
- The pawnbroker loans you money against that collateral.
- When you repay the loan plus the Storage fee, you get your collateral back.
- If you don’t repay the loan, the pawnbroker keeps the collateral.