Five Things You Should Know About Pawn Shops

Pawn shops have been around in one form or another for the past 3,000 years. They offer services similar to those of modern banking institutions including loans, consignments, and storage. A pawn broker has to wear several different hats including merchant, loan officer, banker, and even historian. A good pawn broker buys items for a reasonable price and sells them at a discount. The pawn industry is about making money, and that means repeat business and reasonable dealings.

Pawn shops are riddled with bad press and an even worse reputation thanks to Hollywood productions tying pawn shops to seedy neighborhoods and bad dealings. Fortunately, the reality of the pawn industry couldn’t be further from that.

A good pawn shop will carry a variety of items including jewelry, tools, antiques, furniture, knives, guns, crossbows, camping gear, and everything and anything you could imagine being of value and sellable. Some pawn shops even buy and sell cars, motorcycles, and aircraft. Yes, aircraft.

Here are five things you should know about pawn shops.

Pawn Shops Store Items Cheaply

Are you going out of town for an extended period and have a motorcycle, dirt bike, or other easily stolen large item you’d like to store somewhere that guarantees safety? Take it to a pawn shop. If you get a $500 loan from it, they’ll store it for the interest. A typical pawn shop will charge around 10% interest monthly. So, you’ll have that item stored for $50/month. If it’s stolen from the pawn shop, the broker is on the hook for it.

Pawn Shops Are the Oldest Form of Credit

By securing a loan from a pawn shop, you’re able to get the cash to make ends meet without having to apply through a bank.

Unlike banks, Pawn Shops don’t lend with obligation. You receive a fair price for your item, and have a reasonable amount of time to come back and claim it. The percentage rates are generally reasonable because repeat service is critical for the success of the store. You won’t be paying off a Pawn Shop loan for years like you would a credit card, but the interest rate is generally higher since it’s given on a monthly basis rather than yearly.

Pawn Shops Don’t Deal in Stolen Goods

Pawn shops are a heavily regulated businesses that (depending on your region) are in constant contact with law enforcement agencies. Every item pawned or sold is cataloged, IDs are checked, and the data is sent to local law enforcement. Items sold or left in pawn are held for a specific amount of time to enable law enforcement to do background checks and discover stolen items as they are reported. It’s only after that time ends will you find an item on the shelves.

If a pawn shop does purchase a stolen item, the police will seize it at a cost to the pawn shop which loses the money paid for the item and the item itself. The biggest loser in a stolen item transaction is the pawn shop. Pawn brokers are typically trained to read people and ask the right questions. If they suspect an item is stolen, the negotiation is over and the store will generally walk away from the deal and file a report with the police.

Pawn Shops Don’t Generally Rip People Off

Five Things You Should Know About Pawn ShopsThis is a general rule, and as with everything there are a few seedy exceptions out there. Pawn shops rely on repeat business to make a profit. The goal of a broker is to make a profit in every transaction they have a hand in. If you’re trying to get a loan against your MacBook, PC, gold rings, or minifig collection, you’re likely to get a good offer from a Pawn Broker. At the very least, you should be able to haggle your way to an even better deal. The more money they can loan to you, the more they’ll get back in interest.

If you’re selling, things are a little different. Pawn brokers generally don’t want to buy unless what you have is pretty good. Computers drop in value considerably over a matter of months. Even if you have the biggest and best computer out there, the shop has to sit on it for a month or more before it hits the floor. During that time, it is no longer the biggest and best because something even better will have come out.

If you have a computer that’s a couple years old, forget about it. Pawn shops can’t give those things away. You’re better off going to eBay or Craigslist.

For items you are hoping to get a good deal on: negotiate. Negotiation is an important part of the pawn business, and you should never accept the first offer unless it exceeds your initial expectations. Remember though, pawn shops aren’t retail customers. They have to make money which means buying things for less than they’re worth retail. If that means putting money into it to make it more sellable, then they may need to do that. Just don’t be surprised if that cost is taken into consideration.

Things to Avoid Buying at a Pawn Shop

Computers, though not a big money maker for most pawn shops, are still sold on the floor as they come out of pawn. Computers are like cars, they may appear to work fine at first but you never know what issues are lurking under the cover. Pawn shops generally test everything they receive, but that doesn’t mean it’ll work for a week after it arrives in your home. The same can be said for vacuums, DVD players, Blu-ray players, and cameras.

That said, you would be surprised just how many good deals you can find at a pawn shop. Jewelry, tools, bicycles, movies, and other oddities can be easily purchased at a remarkable price. Usually, you’ll end up paying roughly half of what the item sold for retail.

Final Thoughts

Another thing to keep in mind is that pawn shops don’t just carry what you see on the showroom floor. Many of them sell products online or at auction where they know the chance of profit is much greater. Just because the showroom floor is fill of tools and bicycles doesn’t mean they aren’t willing to deal with high-end merchandise as well.

Pawn Shops get a bad reputation for being seedy places where desperate people sell off their goods to pay the rent. While they may offer loans to the desperate from time to time, the majority of the shops out there are actually very upstanding businesses that want nothing more than to make an honest living buying, selling, and making loans from goods. Shops are lending institutions, much like a bank. For the 30% or so people out there with no bank affiliation, pawn shops are a great way to get the money needed to purchase that next big thing for their home and/or person.

Article Written by

Ryan Matthew Pierson has worked as a broadcaster, writer, and producer for media outlets ranging from local radio stations to internationally syndicated programs. His experience includes every aspect of media production. He has over a decade of experience in terrestrial radio, Internet multimedia, and commercial video production.

  • Tim Genford Jensen

    Anyone see hardcore pawn? on

    • Matt Ryan

      I haven’t, though it sounds interesting.

      • Jason

        You should watch a few episodes and let us know what you think. It’s hardcore compared to Pawn Stars.

  • Tim Genford Jensen

    Anyone see hardcore pawn? on

  • Anonymous

    What about buying video game systems? Any tips?  Ive been looking for a good deal on a used Wii on Craiglist and Ive been thinking about looking at some local pawn shops.

    • Matt Ryan

      Pawn shops are full of used DVDs, Blu-ray, and video games. You would be hard-pressed to beat their prices.

      • Killer63

        so how would a pawn shop know if u traded dvds that were stolen from some random retail store

        • randombitch

          First off for pawn shops to know it is stolen from a retail store the police locate every pawn shop in the driving district and state line pawn shops the serial numbers on dvd and names of every dvd stolen and the pawn shop writes them down and watches for these certain things and alert authorities right away most of them go ahead and do deal just to have persons name and photo to report to authorities its possible I know ppl that did it and got caught the following day

  • Anonymous

    What about buying video game systems? Any tips?  Ive been looking for a good deal on a used Wii on Craiglist and Ive been thinking about looking at some local pawn shops.

  • Matt Jones

    This is obviously based on pawnstars and high-end pawn shops. They aren’t bad, but they aren’t a good place to be in.

    • Matt Ryan

      Though I have watched Pawn Stars, this article is mostly based on personal experience. I’ve sold a few things to pawn shops in the past, and personally know a couple folks that work them. Yes, there are some crappy pawn shops out there, but the industry gets a bad rap. The reality is pawn shops are quite literally one of the oldest businesses in the world.

      • earl

        Pawnstars is TV. It is about as real as Baywatch. In the real world Pawnshops are nothing more than an Alternative Banking Solution. Matt is perfectly correct in every sense. Ever see them sell anything on Pornstars. No. The History Channel picks up the tab for every stupid deal they make. It is all staged for stupid TV viewers.

  • Matt Jones

    This is obviously based on pawnstars and high-end pawn shops. They aren’t bad, but they aren’t a good place to be in.

  • Brandon

    The “pawn shops don’t deal in stolen goods” is hilarious, because they mainly do deal in stolen goods, just because a scripted “reality” show doesn’t, doesn’t mean others don’t.

    Stereos, Speakers, Game Consoles even tvs and power tools etc. 99.99% of the time never get tracked back to the thief or even proven stolen because people don’t ever write down the serials of the consoles or tvs, or ever have real proof it’s their tv in the first place.

    Sure, pawn shops DO catalog, fingerprint etc. but it does no good when 90% of their inventory can’t really be proven to be stolen, pawn shops thrive off getting high priced power tools and electronics and jewelry etc. from scumbag pill head thieves etc. coming in and literally taking nothing for it. Pawn Shops are NOT some high moral place.

    Just like when my car got broken into, i had no way to actually prove the speakers and the cd player i saw at a pawnshop was mine even though i KNEW it was, we got the police involved and nothing could be proven, even though i had a receipt for the subwoofers i bought i didn’t have any actual proof linking that to the serials on the subwoofers, pawn shops are not ran by saints, they will buy anything even if they can tell it’s stolen goods, it’s almost always impossible to prove something is yours especially years and years after you have purchased it and have no real proof.

    Sure computers are easier to prove, phones and guns but for the most part most of the shit in pawn shops are stolen merch.

    • Matt Ryan

      I’m sorry you had some stuff stolen from you. Yes, it would be foolish to think that everything on the shelves is 100% genuine. That does not, however, excuse quoting made-up statistics like that and essentially calling every employee working at a pawn shop a felon.

      I’m sorry, but you’re a little out of line here. Prove to me most of the stuff in pawn shops is stolen. Can you provide any statistical proof? Give me one mainstream media article stating such a revelation. 

      At this point, I’m declined to disagree with you whole-heartedly.

      • Brandon

        Prove to me they aren’t.

        • Justin

          Burden of proof lies on the person making the claim you nimrod

        • Victim

          They can’t because they are rip offs , from a victim herself , who is tick off

      • Victim

        You want one I’ll get u one I just became a victim from a crap while jewerly / pawn shop , and they are working on it and believe me I will not stop till every pawn shop and jewerly store can not by unless proof of a receipt .

    • Martin Maksimovski

      There is a document callef Warranty and this carries the serial number at least. So proving ownership is as easy as showing you purchased the item.

      • Brandon

        Not everyone buys warranties.

        And it’s hard to prove that guitar, ring, power tools etc. are yours without absolute proof, not everyone has absolute proof.

        • Geremydocpepper

          Brandon, you’re a f###ing moron. I work as a pawn broker. I had to go through an intense, STATE-MANDATED background check, I fill out STACKS of paperwork for the cops EVERY day, and we turn away ANYTHING we even THINK is stolen. Don’t talk s### about something you don’t know s### about.

    • Jeff

      I worked in a pawn shop for over 5 years and what you have written is garbage. I live in a small town and we typically made about 600-700 pawn loans a month and purchased an additional 150-200 items directly. We never had more than 10 items even suspected as stolen and the average per month was about 2 or 3.

      I have no doubt that there are quite a few bad shops around – there was one in my town – but the vast majority of pawn shops are just trying to run a business and are not interested in stolen property. It’s a pain to deal with.

      • Brandon

        You live in a SMALL town, you don’t apply.

        • Jeff

          No. It’s just on a smaller scale. I also know people in the business in the Dallas area. Given the tight regulation or pawn shops and the EXTREMELY thorough background checks just to become an employee in one, the pawn shops of the movie/TV world just don’t exist.

          Like I said, there are always bad shops, but the VAST majority are on the up and up. You have no idea what you’re talking about.

          • Victim

            Bull crap , am with u Brandon. , con artist

        • Jeff

          And trust me, there’s plenty of crime in my small town. We’re on a major highway between Dallas and Tulsa and just 30 miles from I35 which runs from south Texas up through OKC and beyond.

  • Keith K

    Any good recommendations for sites to locate local reputable Pawn shops?  

  • Frances

    My daughter lives in Texas. While she was at war a men came in and stole her 6,000 ring. Just by luck she found out who did it. When she went to the pawnshop she was treated badly. My daughter called the poice and the pawnshop was made to give the ring back. The pawnshop said that the thief had rights.

  • Eric Potter

    I just bought a used space heater at a pawn shop about two weeks ago for a fair price, i first used it a few days ago, within two days it stopped producing heat. Today i took it back to the pawnshop and explained that it didn’t and wanted tobring it back and put ghe price of it toward a better heater, with me paying the dif. I was informed that because i didn’t buy their 6month ins. Coverage for $5 that they couldn’t take it back.i thought that heir was a 30day guarrentee policy at all pawnshops, i only bought the thing for $10 and saw no reason to buy insurance for $5 on an item that cost $10-thats’a 50percent markup. They wouldnt do anything for me, told me to contact the manager if i still had a problem with that tomorrow. Is there o law protecting me? Is this normai because it’s never happened to me before?t I live in Abilene Texas please help me understand this.

  • Victim

    I think your full of crap that pawn shops do not rip u off and jewerly shops as well , I think when a person bring something in they should have a reciept , I got something very presiious and stolen from me from someone I trusted and it was worth a lot of money , sure enough she took it to a jewerly / pawn shop and they melted down the gold and put the diamonds and rubies in a different setting , I will never see that air loom again . So u know what I think I think your full of it

    • adolf

      So since you got something stolen from you, its the pawn shops fault? That makes total sense……with logic like that im sure u get lots of crap taken from you. Giving away “air looms” what ever the fuck that is, (you mean Heirlooms) to a “friend” yea that makes alot of sense too, makes about as much sense as blaming the pawn shop because of your mistake.