Wondering how pawn shops work? Pawn shops are brick and mortar stores that accept used possessions of value from their customers, and in exchange they provide a cash loan or payout. On the flip side, customers also frequent pawn shops to purchase goods at a great deal, such as on guns, jewelry, electronics and power tools.
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While PawnGuru is revolutionizing the pawn shop experience by allowing anyone to compare offers online from their local pawn shops, it is still important to understand the fundamentals of how pawn shops work. Read on to learn everything you need to know to get started.
Who Uses Pawn Shops?
Pawn shops are the best way for people to get fast cash in a pinch, especially those who are unbanked or underbanked. Unbanked refers to those who do not have an account at a bank or other financial institution. If you fall into this group, you’re not alone. According to the Federal Deposit Insurance Corp., there are 17 million Americans who fall into this category.
As for the underbanked group, it is composed of 51 million Americans. These folks have access to a bank account, but choose to supplement it by using alternative financial services such as pay day loans or cash advances.
That being said, pawn shops are not solely for the unbanked or underbanked. Many savvy shoppers from all backgrounds know they can find treasures at these shops for a fantastic price. It is a well-kept secret.
How Does Pawning Work?
Here is how a pawning transaction works:
- Pawner brings an item into a pawn shop
- Pawnbroker assesses its value
- Pawnbroker makes an offer at that value and provides terms of the loan
- Pawner agrees to hand the item over in exchange for a cash loan at that value
- Pawnbroker gives pawner a receipt with all the details
- Pawner returns to pawn shop with receipt before payback date
- Pawner pays dues and receives the item back
How Do You Sell an Item at a Pawn Shop?
Here is how to sell an item at a pawn shop:
- Bring an item into a pawn shop
- Pawnbroker assesses its value
- Accept or decline the offer—or negotiate
- Once an offer is agreed upon, an exchange is made for cash
How Do You Buy an Item at a Pawn Shop?
How is how to buy an item at a pawn shop:
- Walk into the pawn shop
- Find an item you want to buy
- Hand cash to the pawnbroker
What Can I Pawn or Sell at a Pawn Shop?
While you can pawn or sell a wide array of items, here are commonly accepted items:
- Jewelry & watches
- Precious metals such as gold
- Previous stones such as diamonds
- Guns & ammunition
- Power tools
- Electronics – TV’s, tablets, cell phones, laptops, game consoles & more
- Video games & DVD’s
- Sporting equipment – crossbows, skis & more
What is the Best Way to Pawn, Sell or Buy an Item?
Now that you know the basics of how pawn shops work, here is the best way to pawn, sell or buy an item today to ensure you get the best offer possible:
- List your item online at PawnGuru—it’s free!
- Receive offers from pawn shops in your local area
- Compare the offers
- Accept the highest offer (or lowest if you’re buying)
- Enter the pawn shop to make the transaction