As I was fussing about spending money on a new vacuum and perhaps a TV that has a screen larger than my laptop, a friend suggested that I go to large pawnshop that isn’t too far away.
I am going to follow his advice, but I have realized that I know NOTHING about how pawn shops operate. I know that people pawn items for cash, but how long do they have to redeem their ticket before the item can be sold? Does the interest start accruing the second the pawner walks out the door? What if I want to sell something for cash rather than actually pawn it?
Laws vary from state to state. I worked in one for five years, so here goes:
You need money. You take an item of value (note: your concept of value is totally irrelevant, it’s the pawn shop’s that’s important) oto the shop and ask for a certain amount of money. The pawn shop guy checks out your item to see if it’s worth said money. If he agrees, you get your money. Every specified timne period (usualy 30 days) you agree to pay a percentage of the money as a fee (this can vary wildly upwards to 33% depending on the state). For each period up to, say, 90 days, you will have to pay that fee.
Example: you borrow $100 at 33%. After 90 days, you would owe $199. Expensive, hell yes. It’s the convenience store of money.
Some words about value:
The pawn shop guy does not care what you paid for the item.
The pawn shop (usually) doesn’t care how much another pawn shop has offered you (although some shops will give a little extra to get the business).
The pawn really doesn’t want your item. He wants the interest.
Because of laws governing pawn shops, the pawn shop is unlikely to rip you off. In the pawn shop world, this will get you shut down by word of mouth alone.
The reason for #1 is that, if you don’t come back (and you are never obligated to do so), the pawn shop guy will have to try and sell your item to get his loan money back. So, just because you paid $250 for that DVD player three years ago, doesn’t mean it’s worth that now. Look around the shop and see what he’s asking for an item you may want to pawn.
Jewelry: if you bought your jewelry at a jewelry store, you probably paid anywhere from 100 - 2000% over cost. In most cases, pawn shop can buy the same jewelry from the same distributors for about the same price as the jewelry stores.
If you shop at a pawn shop, haggle. You may thing the guy is nuts for asking full price on a used item. Negotiate. Make him a decent enough offer and he’ll likely take.
Insider clue: if you see letters on a price tag, it’s the store’s code for how much money is in that item. The shops in town use 10 letter combination that usually spell words. If you can decipher the code, you have a slight advantage when it comes time to haggle.
When I worked there (early 90’s), less than 1% of items found in a pawn shop were stolen. They take fingerprints and require picture ID’s to pawn. Some even photgraph you. All this info MUST be sent to the local police. ALL serial numbers (where aplicable) must be on the item or the pawn shop won’t (well, shouldn’t) take it. This way, if YOU are ripped off, you can give the numbers to the police and they will run them through their system to see if the item is in a pawn shop. If it is, you file a claim and you will get your item back. The pawn will have to pursue the person who brought it in, or have to eat the loss.
If you have any more questions, I’ll be happy to answer.
The pawn shops I have been to (as a prospective buyer) put list prices on unrecovered items that are just insane. Completely nuts. Based on earlier threads on pawn shops, this appears to be the general case.
They are not where you go to get something cheap (in most cases). Sometimes a pawn shop won’t realize what they have and you can get a bargain, but that is rare. Esp. for electronics and such (which I look for).
E.g., a typical pawn shop will charge the same for a 5 year old computer as a brand new one that’s 10 times better. It really is that bad.
Go ahead a visit a few, but be prepared for sticker shock.
It’s possible. A savvy pawn shop will question the “owner”.
Example:
A guy (a big rig driver from some state I can’t recall) comes in my shop with an Amana Radarange microwave oven. The old classic 70’s type: all black and chrome.
The manager decides to question the guy:
Manager: So, how much do you need?
Man: $100.
Manager (closely examining oven): Hmm, that’s a bit more than we usually go. How long have you had it?
Man: About six months.
Manager: Did you buy it new?
Man: No. I bought used a couple of years ago.
Manager: Nah. I think we’ll pass.
The date of the oven? 1975!
Was it stolen? Who knows. Better to pass on it than take a chance.
But at least I can now say that I’ve been into a pawn shop. There were a ton of tools, DVD players and gold chains. There were other things, and when I buy a house, I shall look there first for lawn mowers, tools and things of that ilk.
Like **Mr. Blue Sky,**I also worked in a pawn shop for 5 years and everything that he said was spot on. Our store’s philosophy was to try to double our money on everything that we sold. In order to sell at competitive prices, we tried to sell at half the price of new items. That means that the most we would pawn for (in Oklahoma, you can’t call it a loan) would be 25% of the new price. Many people were upset by this and the standard reply was, “But I don’t want to sell it, I’m coming back for it.” This line of reasoning had no effect on the amount of the pawn. Our store was full of items for sale that people were going to come back for.
We charged 10% per month interest. For days 1-30, the interest was always the full 10%. For days 31-60, interest accumulated daily (.10/30). At day 61, if no interest had been paid, the item was eligible for sale although in practice it didn’t work that way. We’d try to wait at least another week before putting something on sale. As Mr. Blue Sky said, the real money is in the interest. It’s hard to not make money when your APR is 120%. Most other stores in Tulsa charged 240%.
In regard to stolen items, we were required to fill out a police report on every item that we took in for the first time. This required an ID, a description of the item and a fingerprint of the person making the pawn. The police took 10 days to look stuff up in their system (this was early 80’s) and so we couldn’t release an item back to its owner for the first 10 days. The only exception to this rule was if they still had their original receipt.
Tools were a big item for us. You can usually get a good deal on them. Haggle if you’re into that. Most people would just ask us what the least we’d take for an item was and we’d tell them. We would always take less than the price on the tag.
Thanks for the reminder