Pawn shops are a great source for finding unique goods that you can’t find anywhere else at affordable prices. These stores offer everything from rare collectibles to vintage jewelry to top-notch electronics and tools. Often, people come in and give their personal property to the pawn shop as collateral for a loan, or they simply sell it outright for a price that’s less than retail.
When a pawn shop specials in something to pawn, employees appraise it to determine its current value. This helps them make a decision on whether to buy it outright or accept it as collateral for a loan. If they choose to accept it as collateral, the pawn shop keeps it until the customer pays back their loan plus interest in a set amount of time. If they don’t pay the loan by the given date, the pawn shop forfeits the item and can sell it again.
The Pawn Loan Process: Everything You Need to Know
The valuation process can be highly subjective, leading to dramatically different offers. For example, a diamond watch might get offered for $1.4k at one pawn shop and $200 at another—a difference of more than 600%. Other common items like musical instruments and sports memorabilia also show large variances in offer amounts, probably due to their higher sentimental or subjective value.
While the gloomy economy has made pawn shops more popular than ever, it’s important to know what you’re doing before shopping there. It’s just as easy to overpay at a pawn shop as it is at a department store or auto mechanic’s shop, so do your research before you walk in.
