Is It Better for Me to Pawn or Sell Silver?

February 20, 2020 - Jewelry & Luxury Items

Thanks to popular TV shows like Pawn Stars, Americans have a new appreciation for pawn shops.

Unfortunately, not everyone understands what a pawn shop is.

For instance, there’s a big difference between pawning and selling something. When it comes to precious metals, this can get even more confusing.

With silver closing around $16/ounce daily, it remains one of the safer investments you can make. But how does this translate to the pawn industry?

If you have some silver lying around and are in need of some cash, you’ll want to know if you should pawn or sell silver. In this guide, we’re going to sort it all out.

What’s the Difference Between Pawning and Selling?

The best way to think of pawning something is to imagine it as collateral for a loan. You take something of value to a pawn shop and the associate offers you a loan based on the value of your item and how much they can resell it for.

Depending on the state you live in, you could take out a 30-day pawn loan with a 30-day grace period. Other states could offer you up to 120 days to pay it back.

For full transparency, pawn loan interest can get expensive. You can expect to pay 200% APR. So why is this an option?

First of all, if you have poor credit and are strapped for cash, you can’t take out a traditional loan. You don’t have many options at all.

One of your options is to take out a car title loan. Another is a payday advance.

Guess what? Both of those have APRs in the 400% range. Another reason people prefer pawn loans is that there’s no hit to your credit.

Selling your item is exactly how it sounds. You sell it!

A pawn shop associate makes you an offer and you can take it or leave it. But, if you choose to take it, your item is gone forever. Unless, of course, you decide to buy it back from the pawn shop.

The amount a pawnbroker offers you gets based on a number of different criteria. The number one thing the broker looks at is the resale value.

While 85% of pawned items get paid off and picked up, that leaves 15% that get left behind. These folks would have benefited from selling their items instead.

For example, the average closing price of silver is currently $16.40 per ounce. If you have silver that has a high Fineness number (more on that in a bit!), you could fetch $100 or more for an ornament or some silverware.

When you sell silver, they may offer you $25-50 more.

Keep in mind also that pawn shops are reselling agents, they need to make a profit to stay in business and will offer you less than market rate for your silver. However, what pawn shops offer is convenience, and PawnGuru offers convenience in finding pawn shops. We’ll give you offers from pawn shops in your area and you can choose the best of the lot.

Understanding How Silver Gets Valued

We’ve talked a bit about the value of your item. When it comes to silver and gold, the value fluctuates.

Seventy-five percent of silver that gets mined comes from copper or lead mineralization. The other 25% is silver ores.

Using the value earlier of $16.40, a year ago that figure was $15.81. In 2011, silver was valued at more than $35/ounce.

Today, the value is half that. But, silver has been around for thousands of years and it’s not going anywhere anytime soon.

Seventy-five percent of silver that gets mined comes from copper or lead mineralization. The other 25% is silver ores.

A pawn shop will make you an offer based on certain criteria:

  • Current events
  • Currency fluctuations
  • Market speculation
  • Supply and demand

But, Fineness is also a factor. While gold is measured in karats, silver gets measured by Fineness or purity.

This is marked by 800, 925, 958 or 999. These numbers translate to the percentage your piece is pure silver. In other words, the higher the number, the fewer non-silver metals are mixed in the silver.

So, if you have a piece of jewelry with 999 marked on the clasp, this means your piece is 99.9% silver. Anything less than 99.9% is an alloy.

The most common metal that gets mixed with silver is copper. For example, sterling silver is 92.5% silver and 7.5% copper.

Regardless of whether you’re pawning or selling your silver, a pawnbroker uses certain criteria to make you an offer. This includes currency fluctuations, market speculation, and supply and demand.

As you already know, the value of gold is figured, in part, on karats. Silver uses Fineness or purity.

Also keep in mind that unlike many precious gems, silver has uses outside of jewelry. Silver is an excellent electrical conductor, battery element, and is the best reflector of visible light. If the pawn shop doesn’t want the jewelry, the silver the jewelry contains is valuable.

How Much Silver Does Your Jewelry Contain?

The weight of your silver is easy to determine. If you have bullion, it will be clearly stated on the piece or certificate. If you have jewelry, you just need a scale that weighs to a tenth of a gram.

If you have any embellishments on the jewelry such as stones or non-silver charms, you need to estimate how much those weigh and subtract it from the total weight of your jewelry piece. Once you have that number, you can move on to calculating how much your silver jewelry is worth.

Now take the weight of the silver and multiply it by the fineness. For instance, if the metal part of your jewelry weighed 10.5 grams, and it was labeled “925”, meaning 92.5% silver, multiply 10.5×0.925 to get you 9.7125 grams of silver. This would be the true amount of silver in your item.

If you see a store selling the same jewelry piece for more money, remember they are factoring in the labor costs required to make the jewelry. The above calculations are just based on the silver itself and you likely won’t get that exact price. It’s good to use as a reference, though. Also, the market price of jewelry is generally for people who are selling in bulk on an open market. An agent would need to take your silver and separate it out from the other metals and package it in a bullion ingot to get true market price. Pawn shops give you the convenience of pawning or selling jewelry with silver for instant cash.

When is the Best Time to Pawn or Sell Silver?

This is an interesting one. So silver is a commodity and is sold on the commodities market. A commodity as a physical substance like oil, gold, or wheat. When the stock market booms the commodities markets fall, and when the stock market crashes, the commodities markets jump. So if you have the ability to wait, sell your silver right when the stock market hits its low point. This is true for all commodities. Buy gold when the stock market is high and sell gold when the stock market crashes.

Experts predicted a 5 percent increase in demand for physical silver investment in 2019. Silver is more affordable than gold, which makes it attainable for small investors.

When prices are down, buy new coins, like the American Silver Eagle or Royal Canadian Mint Maple Leaf. Both are one ounce of .9999 silver guaranteed.

When the cost of silver rises, try other ways to buy cheap silver. Instead of new coins, search for junk silver below market price

Junk silver looks like today’s dimes, nickels, and quarters. The difference is it’s minted before 1965 using real silver. Junk silver coins contain 35% to 90% silver. It’s worth your time and effort to search flea markets, antique malls, and coin stores. One interesting tactic is to ask gas stations if they have any weird coins.

Should You Pawn or Sell Silver?

So, you want to know if you should pawn or sell silver. The answer really depends on you.

You’ll get more money if you sell your silver. The reason why is accounting.

When a pawn associate makes you a pawn loan offer, they have to assume you won’t come back for it. This means they have to resell it.

There’s also a time frame to take into consideration. If they offer 30-day loans, they may have a grace period of extension of another 30 days. On top of that, reputable shops will run everything through the police to make sure it isn’t stolen property.

All these things take time. If you sell them your silver, they only have to wait a set amount of time to find out if it’s stolen or not.

They almost always will give you more cash if you sell them your silver.

So, What Will You Do?

Deciding whether to pawn or sell silver comes down to one thing. Do you want your item back or do you need every penny you can get?

Making that determination will tell you if you should sell silver or get a pawn loan instead.

If you don’t really want to part with your silver at all – don’t! There are plenty of things that you can pawn for quick cash.

If you have a lot of jewelry you’re not interested in holding onto you, check out our tips for pawing jewelry.

If you don’t care about the sentimental value of your silver, it’s best to sell it and get as much money as you can.

David Stiebel
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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Avatar for Ridley Fitzgerald

Ridley Fitzgerald

February 14, 2019, 12:09 AM

It’s great to know more about silver and selling it. I like how you said that the value of silver and gold fluctuate. I didn’t realize that, so I’ll have to do some research into silver’s value before my wife sells her jewelry.

Avatar for Silas Knight

Silas Knight

March 2, 2019, 12:08 AM

You’ve got great tips for selling silver. I like how you said that you’ll get more money for selling, but you won’t get it back. That’s not a con for me, really, because we want to sell old hand-me-down jewelry, and we don’t really need it back.

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