January 03, 2020 - Pawn Resources
We mean, there are even TV shows about them. But how do pawnshops work?
In this article, we will be covering what you need to keep in mind before you visit a pawnshop, some red flags you might have never thought about, and the exact procedure required.
But first things first:
As simple as it may sound, pawnbrokers lend money to customers who pledge property as collateral. When the customer pays the loan back, the pawnshop returns their property.
Of course, there are pawnshops where you can directly sell your merchandise and the result is the same as it is if the customer does not redeem their collateral: The pawnshop sells the item to retail consumers.
But we are sure that you have more in-depth questions about pawning. Again, we are here to help!
Selling to a pawn shop follows a specific 4-step procedure we are happy to break down to you:
When customers get their pawn ticket, they also get the cash. This ticket works as a receipt as well as it summarizes the terms of the loan. Of course, not all customers choose to repay the loan and get their item back so, as a result, their interaction with the pawnshop stops there.
But let’s see what someone who is interested in getting their money back needs to do.
To redeem their items, customers need to return to the pawnshop and pay the balance (plus added fees) before the deadline.
Usually, customers get from one to four months to reclaim their property but there are pawnshops who have no problem to extend the loan period.
Selling to a pawnshop comes with many different things you need to keep in mind –after all, no one is born knowing how to pawn something.
First and foremost, you need to know as much as possible both about the item you are trying to sell and the pawnshop of your choice. Do some research online and see how much your collateral is worth and how the pawnshop works.
Are their fees really high for you? Are they flexible in terms of deadlines? These are things you need to know before you pay a visit.
Also, having information about your item(s) will only prove helpful because you might be able to close a much better deal.
Never forget that pawnshops are businesses. No pawnbroker will try to rob you but they still want to get your item at the best price possible. At the same time, you want to get as much cash as possible –and this is totally ok.
Don’t be afraid to negotiate a higher price for your merchandise since most professionals expect you to do so.
No need to worry.
Typically, there are not any official forms you need to fill, or any sophisticated paperwork pawning comes with. However, the pawnshop will need to know that you are the one who actually owns the property.
As a result, the staff will ask you questions to figure out whether you and your property are legitimate and the only thing you’ll need to show is a government-issued ID since it is required by law.
We know that finding a great deal requires a lot of work and many visits to multiple pawnshops.
But now that you have an answer for your “how do pawnshops work” question, you can even do it via our very own pawn service! Click here and get multiple offers from pawn shops in Toledo, OH with the click of a mouse!
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.More Articles