Pawn or Sell Silver: How to Get the Most

January 23, 2020 - Jewelry & Luxury Items

Do you know the difference between pawning and selling something?

If you thought they were the same thing, you’re not alone. Many people think they’re interchangeable.

We’re here to tell you there’s a huge difference between the two.

If you’re sitting on a couple troy ounces of silver and don’t see a need for it, you may consider visiting a pawn shop. But, you may be asking whether you should pawn or sell it.

We’re giving you a quick overview of the differences and why choosing to sell silver may be a better option.

The Difference Between Pawning and Selling

A pawn is a loan. The item you pawn is your collateral.

Now, this isn’t a loan that’s going to buy you a house or car. It’s going to be much lower than that.

Most people use pawn shops for emergencies. This could be a car repair or unexpected bill.

But, you should only use a pawn shop for a short-term solution. The reason why is the interest rate.

We found the average interest rate is as high as 258%. To be fair, that’s still much lower than a car title loan or payday loan. Their APRs can reach well into the 400% range.

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 $15.99 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.

This is sort of like a convenience fee. Depending on where you live, pawn loans can have 30-day terms up to 120. There’s also a grace or extended period that can make the loan run longer.

This all affects the offer. If a broker has to sit on your silver for 120 days before they resell it, the price of silver could drop in the next four months. Now, they lost money.

Selling it means it’s theirs free and clear. Of course, after they run it through a database to make sure it’s not stolen.

After their own holding period, they can sell it to whomever they choose. Sometimes, this could be a precious metals broker.

How Does This Affect Your Silver?

The value of silver and gold fluctuates, like anything else. But, with silver, it stays relatively steady.

For instance, silver closed on average at $17 in 2017. Six years prior to that it was up to $35 per ounce.

In 2010, it was $20. 2009? $14.67.

But it’s a commodity that’s been around for thousands of years and as long as it continues to get mined, it will be around for another thousand.

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.

But, remember when we mentioned Fineness? That comes into play, too.

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

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

Silver is often mixed with other metals, like copper. This affects its purity or Fineness. All silver gets marked with a three-digit number that signifies its Fineness percentage.

  • 800 – 80%
  • 925 – 92.5%
  • 958 – 95.8%
  • 999 – 99.9%

So, a piece marked with 999 is as close to pure silver as it gets. Something marked 800 is 80% silver and 20% another metal.

Anything less than 999 is an alloy. Sterling silver is an alloy because it’s 925. It’s 92.5% silver and 7.5% copper.

Should You Sell Silver?

The bottom line comes down to two things. Do you want to get your item back or do you want to get the most cash you can for it?

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

If you have an heirloom that’s been passed down to you from your grandfather, maybe it’s best to pawn it if you’re really in a bind.

Or, if it’s your great aunt’s silverware collection, you may not care at all. By the way, you can fetch a pretty penny if it’s in great shape and has a high Fineness.

If you’ve thought it over and are still torn, check out these other items that you may want to consider pawning instead.

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 Tiffany Locke

Tiffany Locke

January 31, 2019, 12:43 AM

I like that you mention how pawnbrokers look at the resale value and can be short-term, whereas if you sell your silver it’s theirs and they can then use it as they choose. When choosing one of the methods to get money, it might be a good idea to consider what silver items you want to use in order to determine if you want it back or not. If you decide to sell it, you’d probably want to research local shops and see what options are online in order to find a reliable professional to work with that can help you determine the worth of your valuables and provide you a fair price for them.

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