How Do Pawn Shops Work? Guide 2021
Do pawn shops work with jewelry?
Yes! Pawnshops routinely accept jewelry as collateral for a loan. A pawn loan is when money is lent in exchange for items of value, such as jewelry, with the loan amount based on that item’s value. The jewelry is returned when the loan is paid off or can be surrendered as payment in full if the guest chooses. At Pawn America, we have certified, graduate GIA Gemologists and Master Goldsmiths on staff who assess, inspect, and price the jewelry in addition to many trained appraisers behind the pawn counters who are ready to answer any questions you may have. It is our job to keep your jewelry pieces safe and secure during the term of your pawn loan.
How do pawnshops make money?
Pawnshops are all different so make sure you are working with a reputed shop. Pawnshops typically make money on the retail side when they charge a price to the buyer for an item they want to purchase. This is the same way that all retail stores make money. Some pawnshops also offer other services and charge a fee for things such as payday loans, for example. Pawnshops can also make money from the interest charged on a collateral loan. If you choose to forfeit your pawned item, you will satisfy the loan in full and not owe any more interest.
Will this loan affect my credit?
Your pawn loan is secured by the value of an item that you own, there is no need for it to affect your credit. This is significant because a low credit score can harm your chances of qualifying for fundamental things like housing and employment.
How do pawn shops determine the value of an item?
With a lot of painstaking research, training, and experience. Pawnshops typically offer a price for your item that is slightly lower than the direct-to-consumer resale price of the item. What a guest gets in return is time and cash as they determine whether or not they want to pay off the item in full to get it back or if they want to forfeit the item. Selling your item yourself means you don’t get the time advantage of deciding what is best for you. All the while with the peace of mind that your item is being held securely for you.
Pawnshop rules and regulations?
We could write pages on this subject alone and again, the importance of dealing with a reputed, established shop is paramount. Pawnshops must follow state, county, and municipal laws specific to their area. In Minnesota, make sure the shop is following these laws (more laws found here).
(a) A person may not engage in business as a pawnbroker or otherwise portray the person as a pawnbroker unless the person has a valid license authorizing engagement in the business. Any pawn transaction made without the benefit of a license is void.
(b) A separate license is required for each place of business. A municipality may issue more than one license to a person if that person complies with this chapter for each license.
(d) Each license shall remain in full force and effect until surrendered, suspended, revoked, or expired. A license may be suspended or revoked for failure to comply with the municipality's ordinance.
At Pawn America, we sell, trade & pawn a variety of items, from scrap gold & silver to fine jewelry and everything in between. You choose which of our services is best for you and we will not pressure you. The decision to pawn is completely up to you, we are here for you. No matter what your needs may be, our goal is to provide you with the best value for your items in a manner that is courteous, fair, and professional.