When you think of a pawn shop, what’s the first thing that comes to mind?
Do you envision an old man, smoking a cigarette and wearing a few too many watches behind a counter? What about shelves upon shelves of disused items? Perhaps a broken guitar in the corner or a cracked antique hidden behind crumbled books? Maybe you envision a mystery door and think it’s the perfect place for criminals to meet.
No doubt about it: pawn shops tend to have a poor reputation. Movies and TV shows portray pawn and loan shops as the last pit stop before bankruptcy. While certain aspects of this stereotype can be true for some older shops, it may surprise you to find out the truth about this unique industry.
Here are a few common misconceptions that you should stop believing.
1. Only People Down on Their Luck Go to a Pawn Shop
Despite stereotypes, the average pawn shop visitor is 36 years old, employed, and earning about $29,000 per year. People from all economic statuses visit pawn shops, and they reclaim their items about 80% of the time.
Additionally, many small business owners seek loans from pawn shops. This is because pawn and loan shops often approve businesses that banks and other credit unions would decline. And if the borrower fails to repay the loan, it doesn’t negatively impact credit, as personal items act as collateral. These people are not down on their luck-it’s just smart business.
2. Pawn Shops Are Full of Stolen Goods
In the movie Men in Black, Agents Jay (Will Smith) and Kay (Tommy Lee Jones) go to a hole-in-the-wall pawn shop. While there, they meet Jeebs (Tony Shalhoub), a friendly yet shady pawn shop owner. In addition to selling questionably obtained items, he also dealt in alien firearms.
This example is but one of many movies that portray pawn shops as an integral part of the criminal underbelly. But in reality, less than 1% of items in pawn shops are stolen merchandise.
Most pawn shops carefully record every transaction by serial number. Some pawn shops fingerprint and photograph every customer who brings in their items. Customers may also have to fill out careful documentation to ensure the item rightfully belongs to them. From there, the owner forwards that information to the local police department, and they even work with the police department to ensure stolen goods return to the original owner.
3. You Can Only Find Run-Down Items at Pawn Shops
Many people mistakenly assume that only poor people bring in their used items for cash. But that couldn’t be further from the truth.
A majority of people who pawn items simply need a little extra cash on hand, and often they want to clear away clutter in their home. If they want to get the most money for their items, they bring in little-used items in great condition.
Some pawn shops hire staff who specialize in item repair. Even if the item came into the shop with some damage, the staff member can repair the item and ensure it works in like-new condition.
4. Pawn Shops Take Only Gold, Jewels, and Family Heirlooms
Some pawn shops do specialize in high-ticket items like gold, jewels, family heirlooms, and antiques-but this doesn’t mean that every shop you come across will have the same policy.
A majority of pawn shops also accept home improvement tools, musical instruments, video games and electronics, even vehicles and boats.
Because retail stores often mark up their stock, and pawn shops often sell at market value, you can find amazing deals for everyday items.
5. Pawn Shops Lack Regulation-They Will Take Advantage of You
When you sell an item, you understandably want to receive the most money in exchange. You want every cent’s worth of value out of that wedding ring, watch, or coin collection.
Naturally, it’s easy to assume that the pawn shop owner wants the same thing. To make the most profit, he or she may try to undercut you, jack up the rates on a loan, or sell you goods for more than they’re worth.
Yet once again, this gives pawn shop owners an unfair name.
Many pawnbrokers research each item’s market value to ensure you receive a fair price. Additionally, pawn shops must adhere to local, state, and federal laws for each transaction and loan. Pawn shops that deal with firearms must follow regulations established by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). And federal laws such as the Patriot Act, Truth in Lending Act, Equal Credit Opportunity Act, and the Data Privacy and Safeguard all keep pawn shops in check.
Want to Know More?
These are just a few common misconceptions about local pawn shops. If you want to know more about how pawn shops can help you and those in your community, stop by your local pawn shop and see what it has to offer.