8 Tips for Choosing a Good Pawn Shop

January 26, 2020 - Pawn Resources

If you have ever pawned an item for cash,

you already know that pawnbrokers can offer much-needed consumer credit with no credit checks (because your personal property secures the loan).

If you are in need of a pawn shop, you want to find one that treats you well and gives you the best deal. Whether you want to pawn something or buy an item, here are some tips for finding a good pawn shop.

1. Understand How a Good Pawn Shop Works

Pawn shops have maintained their popularity through the years. Every generation faces economic challenges, and a good pawn shop is a place where you can get money quickly. It’s also a place to purchase a second-hand item at a reasonable price.

At a pawn shop, you can do one of three things. You can buy items. You can sell an item outright. Or, you can pawn an item. When pawning, you give the pawn shop your item for a limited period in exchange for a small cash loan.

You then repay the loan along with interest and fees within that period. If you don’t pay on time, the pawn shop owns your item and resells it.

If you take an item to a pawn shop, you choose whether to sell or pawn it. You shouldn’t pawn unless you know you can repay the loan.

And, you should have an idea of what your item is worth before you begin. That way, you know whether the price they offer you is fair.

2. Read Customer Reviews Before You Visit

Before walking into a pawn shop, do some research online about local pawn shops. Or ask around and see what your friends recommend.

A good pawn shop will have an abundance of satisfied customers. Many of those customers write online reviews. See what these customers are saying. Also, look up how long they have been in business. See if it’s switched ownership and when.

3. Research Market Prices Before You Visit

A pawn shop should be upfront with their loan terms and prices. Customers should feel as though the pawn shop is reliable and up to date on the market for the items you are selling or buying.

You can do some market research of your own to get the current market value for the item(s) ahead of time. This will help assure you that the pawnbroker holds the needed expertise to create a smooth transaction.

4. A Good Pawn Shop Is Properly Licensed

Pawn shops in the United States must follow federal laws. They must follow the IRS Code. They must also comply with the Truth in Lending Act and the US Patriot Act.

Pawn shops must carry local and state licenses as well. A good pawn shop will have more than one license. The will have a pawnbroker’s license. Many will also have a secondhand dealer license as well as a general business license.

After all, if you are pawning an item, you will need assurance that the pawn owners will store your items properly and have insurance coverage to protest against theft or damages. This is not possible without proper licensing.

This almost goes without saying, but avoid any pawn shop that isn’t licensed, as that proves they are not compliant with the law.

5. A Good Pawn Shop Has a Good Reputation

A well-established pawnbroker has been in business for a long time. It’s advisable to find an established pawnbroker who has been in the business a long time. With experience comes expertise and financial savvy.

A solid reputation indicates an equally solid customer base. They have most likely earned a trusted spot in the community and take care to offer quality service.

A fairer price is part of that service. They may even support community groups and charities as a way of maintaining that relationship.

6. Understand the Meaning of Fairness

A good pawn shop is fair as long as you are fair with them. If you bring them an electronic item, expect that the ask to test it to be sure it works.

If you bring jewelry, they require proof of authenticity from a jeweler. It would be reckless not to ask for this kind of verification.

Also, understand that a good pawn shop will never offer you full market value for any item. They are resellers, so it does them no good to do so. If you wish to sell outright at the best price, then an online collector will pay higher.

Pawn shops offer instant cash when you are in a bind. If you are pawning, then you also get your item back at the end of the loan period. Sometimes these two factors are the most important.

7. Choose a Convenient Location

Obviously, you’ll want to do business with a pawn shop close to where you live. You won’t want to travel across town when it’s time to get your item back.

Also, a pawn shop that has operated multiple locations for years has a better reputation than a store that’s been open for only a few weeks or months.

8. Pawn Shop Customer Service

A reputable pawn shop focuses on getting new customers and retaining their business. From the moment you walk in the door, staff should be friendly and respectful.

They should also be upfront about their policies and loan terms. A good pawn shop does not need to be deceitful. Any paperwork and pawn tickets should be written clearly and contain all needed information.

Staff should be happy to answer all questions to be sure you understand the contract. They should never push a customer to sign anything until they are ready.

The same applies if you are buying from a pawn shop. The terms of sale should be clear. A reputable pawn shop doesn’t overcharge.

They should charge based on the item’s current condition (not what the item would be worth if it were new). They should also offer an authenticity guarantee when applicable.

Only Do Business if You Are Comfortable

Even if you do all the legwork and the pawn shop checks out, do not do business if you are not comfortable. If you walk in and are treated disrespectfully, or even if you simply feel a negative vibe, walk right back out.

Doing business with a pawn shop can and should be a positive experience. If we can answer any questions for you, please contact us.

David Stiebel

David Stiebel is one of the cofounders of PawnGuru. David was educated at MIT, where he studied Math. He subsequently worked at Bain as a data scientist before starting PawnGuru in 2015. He started PawnGuru to build a better tool for pawn shops and consumers to connect.

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