One of my favorite shows to watch is Pawn Stars on the history channel. Watching episodes of this popular TV show has become somewhat of an event at our house. The show is educational, fascinating and largely about making money, what’s not to love?
Long before banks, ATMS and check-cashing services, there were pawn shops. Pawning was the leading form of consumer credit in the United States until the 1950s, and pawn shops are still helping everyday people get by when they need to.
The premise of Pawn Stars is a multigenerational family; The Harrison’s running a pawn shop in Vegas. They invite experts to the show on everything from vintage coins to motorcycles. These experts help decide whether the item the average joe is bringing in to pawn, is a real or a fake. After discovering the items market value they begin to haggle, sometimes making the owner of the item giddy with delight over their new fortune or cringing as they walk out the door with the item they thought was valuable still in hand.
Sometimes things are tight, a debt collector is banging on your door and quick cash or a loan from a pawnshop may seem like a lifeline. The question is, is it worth the trip to your local pawn shop and what kind of trouble could you get in there?
Sell it or Pawn it?
A member of the Harrison clan will always ask, “Would you like to sell it or pawn it?” When you choose to visit a pawn shop you have the option to make some money on your item or pawn it, meaning using the item as collateral for a loan.
Pawners beware if you decide to take out a loan you must understand the terms. Although failure to pay back this type of loan does not affect your credit, the bottom-line is that you’re borrowing money at a high interest rate with the possibility of losing your collateral.
For example, if you want to pawn your great grandpa’s baseball card collection, the pawnbroker will offer a loan, and in exchange will hold the baseball card collection until the loan is repaid with interest within a predetermined amount of time. Loan repayment times vary by state, but 120 days is the average time most pawnbrokers give you to repay the loan.
What can I Pawn?
Pawnbrokers look for items that retain their value, are easy to sell, and are not too large to store. Examples of popular pawnshop items include:
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Jewelry
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Musical instruments
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DVDs
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Video games
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Tools
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Electronics
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Firearms
What you need to know
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Don’t expect to be paid the full value for your item. Offers are based on current value and market conditions. A good rule of thumb is to expect 20% to 50% of your item’s value.
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Know the approximate value of your item. This will help you negotiate the selling price or the size of the loan. See what your item or a similar item is selling for on eBay or Craigslist.
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Keep your cool. Seasoned pawnbrokers can tell how motivated or how desperate you are to make money. This will most likely cause price negotiations to start lower than you had hoped.
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Shop around. When possible, visit more than one pawnshop to find the best price for your item or the lowest interest rate for a loan. Check out the pawn shops reputation and know your rights before you go!
Remember if it sounds too good to be true it probably is! When dealing with pawn shops to obtain some much needed quick cash or a loan on your item be sure to do your homework. Understand completely the terms of your loan, the payoff date, and the arrangement for picking up your item. If you are looking to make a haul be prepared to take less than retail value or haggle till you drop.
Have you ever used a pawn shop to score some cash or take out a loan? What was your experience?
Great article Suzanne! I think pawn shops are a generally a bad deal. It’s a great way to make money if you own the shop, but if you’re the (usually) desperate person on the other end of the deal you can’t expect to prosper using that kind of business.
I wrote a post a while back called “Pawn Stars and Short Term Thinking” that might be of interest-
http://www.cfinancialfreedom.com/CFFwordpress/pawn-stars-and-short-term-thinking/
@Jason Thanks 🙂 I agree the people patronizing the pawn shop usually end up on the short end of the stick. I have seen a few episodes where they didn’t know the treasure they had! I checked out your article and yes preventive maintenance on your finances can help to keep you out of these desperate situations.
Nice article. Never had to pawn anything, but I’ve seen some episodes of the show 🙂
@Ornella I am glad you liked it. I love this show! I really didn’t know to much about pawn shops until I watched; I have never even been in one.
I’ve never used a pawn shop for a loan, but I did use it to unload some unwanted electronic items before there was Craigslist – or before I knew about Craigslist anyway. I wonder if you can get a better selling price for an item on Craigslist, or at a pawn shop? I guess you’re in more control with Craigslist….you could go into a pawn shop 10 times and negotiate 10 different prices. 🙂
@Travis You know how I feel about Craigslist 🙂 I think that if you price your item right you most likely would out better than taking the items to a pawn shop. Unless of course you have an unusual treasure that not to many people know anything about.
I love this show! Barry is my favorite!
I have never sold anything in a pawn shop. I think it is a good deal if you need fast money, but not a good deal if you can wait. When I sell something I always want to get top dollar, even if I have to wait for it.
@Jamie I like Chumly 🙂 I agree if I feel I can get more money for my unwanted items I sell them on ebay, even if it takes a few auctions and work to get them sold….
I was a huge fan of the series, how awesome it would be to engage in that of world. Still a huge fan!
@ThSavingsBlog I don’t have much time to watch TV but I gotta say this show is one I will watch if I have the time, I find it very entertaining 🙂
Never seen the show, but if it’s like storage wars I’m sure I’d love it.