How to Do Business With a Pawn Shop

Pawn shops loan people money for short periods of time. These places are often used by desperate people taking desperate measures. However, there are many different reasons for using a pawn shop. The store holds property as collateral on loans given to an individual. When someone want to buy his possessions back, he must pay the loan amount and the interest charged in full. If the loan isn't paid with interest in the allotted time, the pawn broker has the right to sell the property.

Difficulty:

Easy

Instructions

1. Go to a pawn shop if you've never been in one. The shops usually have a large variety of jewelry, power tools, electronics and media items. You'll also find movies in various formats, computer games and software. Good prices are characteristic of a pawn shop, but it's smart to know what you're buying. Know what it usually costs. For example, if you want to buy a sapphire, check out the prices at a reputable store first. Look at the pawn shop afterwards so you can be an informed shopper.

2. Talk to several pawn brokers before you decide to sell anything. There's often a big difference between pawn shops as far as price, location and quality of merchandise. The owners also pay differently and take different kinds of items as collateral. Some take very inexpensive things like used compact discs. Others want higher ticket items only.

3. Be realistic about what you're dealing with. The pawnbroker is in business to make a profit. Always treat this as a business negotiation. You are trying to get some quick cash. He is trying to run his business at a profit. Understanding all this up front is a good start.

4. Understand what the pawn broker does. He takes your personal property. He then uses it as collateral. The broker will give you money. He will hold your property for a period of time so that you can acquire the funds for the loan (as well as its accumulated interest). The length of time and the amount of interest is determined by your state or local laws.

5. Bring things that you know the pawn shop will use as collateral. This is usually personal jewelry, musical instruments, cameras, silver and electronics. He will give you the amount that he can sell your property for--at pawn-shop prices. You will never get what you paid for an item. Pawn shop buyers pay greatly reduced prices so you will get less than half of the item's value.

6. Pay off your loan and interest on time. You have 30 to 90 days to retrieve your belongings. Pawn shop brokers have to notify you when the final payments is due. This is true in most states. This is a final notice. If you don't heed it, your stuff will be put up for sale.

7. Be aware that the pawn broker can keep part or all of the money from the sale of your belongings.

8. Bring identification. This is a must by law. Hassling a pawn broker about skipping this step is not smart. He is required to follow the law.

Tips & Warnings

• Use a pawn shop when you truly need fast cash only. It isn't a place to go for some extra spending money.

• All pawn shops are not above-board. Call the local police station if you aren't sure of a business.

References

• Pawn Xchange