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How Does A Pawn Shop Work?  
User currently offline2707200X From United States of America, joined Mar 2009, 8431 posts, RR: 1
Posted (1 year 11 months 2 weeks 13 hours ago) and read 3881 times:

In the midst of TV programs like Pawn Stars and Cajun Pawn Stars being popular on TV how does it and the concept really work? I have read some online information but it is still hard to understand from site to site. I know pawn stores like antique stores sell antique and historical stuff and you can get money selling your antiques. One thing that I do know in the difference between an antique store and a pawn shop is at an antique store, the walls aren't filled with guitars. If you work in a pawn shop, know the business or know someone who works in this kind of store, how do they operate?


"And all I ask is a tall ship and a star to steer her by." John Masefield Sea-Fever
12 replies: All unread, jump to last
 
User currently offlineBMI727 From United States of America, joined Feb 2009, 15692 posts, RR: 26
Reply 1, posted (1 year 11 months 2 weeks 12 hours ago) and read 3852 times:

Quoting 2707200X (Thread starter):

In the midst of TV programs like Pawn Stars and Cajun Pawn Stars being popular on TV how does it and the concept really work?

Pawn shops will either buy items and sell them at a profit, or they will loan money against the value of the item and hold it for the duration of the loan. If the loan isn't repaid, the item is sold to recoup the value and make a profit.

Quoting 2707200X (Thread starter):
I know pawn stores like antique stores sell antique and historical stuff and you can get money selling your antiques.

Most pawn shops don't have antique items. Just everyday junk like TVs and jewelry.



Why do Aerospace Engineering students have to turn things in on time?
User currently offlineQuokkas From , joined Dec 1969, posts, RR:
Reply 2, posted (1 year 11 months 2 weeks 12 hours ago) and read 3844 times:

Perhaps the main difference between a pawnbroker and a secondhand dealer (antique shop) is that the pawn broker is advancing a loan and not making an outright purchase. The idea is that someone needs some money which they will repay with interest. The pawnbroker makes a secured loan using the item (or pledge) brought into the store as collateral or security. The loan will be for an agreed period and if the customer does not repay the loan and the interest or come back to collect the item, the pawnbroker may sell it to recover his costs. If the debtor defaults the dealer will not report it to a credit agency because he/ she has the collateral to sell and recover the debt. In contrast the secondhand dealer buys the item outright in the expectation of being able to sell it at a profit.

How much the pawnbroker will lend will be determined by his/her assessment of how much can be recovered if the loan is not repaid, less the costs of advancing the loan and storing the item. The state of the market, the condition of the goods, the quantity of similar goods being offered, the likelihood of the debtor wanting the goods back will all play a part. If the pawnbroker thinks the item is not something the customer will want to reclaim a lower loan will be offered.

The types of items stocked may be similar or different according to the area in which the shop is located. As the financial crisis began to bite pawnbrokers saw an increase in people pledging gold and expensive jewellery against loans. In a poorer area you are likely to see more commonplace items of lower value. Antique dealers differ from pawnbrokers less in what they stock than in the fact that they pay outright and don't advance loans. In that respect they are secondhand dealers just like junk shops. The difference is that they are perceived to be selling items that are not merely old but collectible - items that will appreciate in value because of their rarity or quality and craftsmanship. That isn't to say that they don't sell junk - it all comes down to perception of potential value.

There can be an overlap between pawnbrokers and secondhand dealers with a pawnbroker being willing to buy something outright but the principal aim of the pawnbroker is to lend money at interest against collateral.


User currently offlineCXfirst From Norway, joined Jan 2007, 3019 posts, RR: 1
Reply 3, posted (1 year 11 months 2 weeks 11 hours ago) and read 3810 times:

The TV shows might make pawn stores more like antique stores, because it is the weird antiques that are interesting.

Also, the shows look like it is more about selling your items, rather than pawning.

Really pawning isn't selling your item, it is getting small loans against some of your possessions, often from just ordinary items. The show "Hardcore Pawn", which is from Detroit, rather than "Pawn Stars" from Las Vegas is more about pawning.

Pawning:

Bring in a TV, negotiate a value, lets say $200 (will be less than actual price)

Get $200 dollars cash and a deadline to repay.

Repay cash plus agreed interest within deadline, and get your item back.
If you don't repay, the item gets sold.

Some pawn places will also buy and sell items outright, which is what you see most often on Pawn Stars.

-CXfirst



From Norway, live in Australia
User currently offlineGEEZER From United States of America, joined Aug 2010, 1479 posts, RR: 2
Reply 4, posted (1 year 11 months 2 weeks 6 hours ago) and read 3726 times:

I can see that not many A.netters have pawned anything recently !

How do pawn shops "operate" ?

Simple; you rent a retail space, stick out a sign........."Loans"; there are ALWAYS people who are broke, and need cash, NOW; you take your guitar (which you paid $ 1,200 for 6 months ago) to the pawn shop, and say, "how much can you "loan" me on this $ 1,200 guitar ? Pawn broker says, "$100"; ( remember, you're not trying to sell your prized guitar, you're just trying to get a "quick loan", and the guitar is the collateral ); the amount the pawn broker will loan you has absolutely nothing to do with what the value of the item put up for "pawn", and it's entirely up to the pawn broker what he's willing to loan.

Many people pawning things have every intention of paying off the loan and getting their guitar, or their diamond ring, their camera, whatever, back; the problem is, there is a time limit, (which you agreed to in writing when you "hocked" your "whatever".

If you don't have the cash when the contract is up, you forfeit the item, and it now belongs to the pawn broker; what he does next is entirely up to him. If you have a guitar that cost $1,200 retail, you may stick a sign on the thing, $ 800; the first "picker" that walks in the door and sees that guitar, goes nuts ! ( people who play musical instruments can't pass up a chance to get a "deal" on an instrument that "turns them on"; so he "negotiates" a bit, maybe the pawn broker lets him have the thing for $ 775; he still made $ 675 on the deal, and maybe only had the thing for 2-3 days.

So a pawn broker is just another "merchant"; he gets "merchandise" cheap, and sells it for whatever the "traffic will bear"; are pawn brokers "honest" ? it all depends on which ones you're talking about ! Some are, some aren't; some are even known to have a second "sideline" going, which is known as "fencing"; ( no, not the chain-link kind, or the "white picket" kind you have around your yard ! These guys "buy" stuff which is "hot" from burglars and other thieves who steal stuff; I can guarantee you that old Rick (on "Pawn Stars" ) won't buy anything that's "hot", because he's got a great thing going; he was doing quite well just pawning stuff, and now he's a big TV star, and is cleaning up ! (Plus he's a really great guy, and as far as I know, is as honest as they come.)


All of my "experience" has come from the antique business; (which can be a lot like the pawn business at times)
I "dabbled" in the antique business for about 10 years; people have a lot of "misconceptions" as to just what "antiques" are; they are ANYTHING that you offer for sale in a shop / store / mall, that has a sign out front that says "antiques" !

Another "facet" of the antique business............seldom a day goes by, without people coming in, wanting to "sell" you something; usually, they think you should pay THEM more than you could sell the thing for if you kept it laying around for a year; but not always............occasionally you get a bargain; ( I've bought many diamonds this way) For the most part though, I don't like to buy things from "walk ins"; most have a very tragic story to tell, and I'm a sucker for tragic stories ! I'd rather go to an auction and "compete" with the other "suckers".

Just today I was in Terre Haute and had 4 hrs to kill; I went in a "Goodwill Store" to buy a book to read while I was "killing time"..............wouldn't you know, before I even got to the books, I ran across this brand new pair of size 12 mens ice skates; the things were brand new, never been on a pair of stinky old feet; $ 2.99 ! I couldn't resist ! So about January, I'll be sticking them on eBay (or Craig's List) for $ 15  It's just like finding cash laying in the gutter !
Buy LOW, sell HIGH; that's all there is to it; ( but you have to know what people will buy, and what they won't)

After a while, you get "experienced" at what people "want", what they are "hot for", and what they are likely to be willing to pay for it. When you're in the antique business, you tend to go to a LOT of auctions; that's one source of "things to sell"; there are hundreds and hundreds more; you can sell ANYTHING ! Don't believe me ? here's a few "examples";

One day while Miss Arlie was working at the antique shop, I was jerking a bunch of saplings out of the edge of our yard with my Kubota; when she came home, she looked at the pile of small trees I had pulled up, and says, what are you gonna do with them ? Me: "I'm gonna pile them up on my forks, run them down the road a hundred feet, and dump them "over the hill" into the ravine "

She: "No, you're gonna make them into "walking sticks" and sell them at the antique shop "; just like that, "Parke County Walking Sticks" were "born" ! To "humor" Miss A, I made up about 3 or 4 dozen walking sticks, made a jazzy sign for the wall, and started selling walking sticks; in the beginning, I was using whatever I had "pulled up" just to extend my yard into our woods; a lot were sassafras, tulip poplar, some paw-paw, a few wild cherry, white oak, and even a couple of ironwood saplings; a few I spent an hour on, removing the bark with a draw knife, sanding them with a small belt sander, and "experimenting" with various kinds of stain, oil, etc; most I tagged at $7 to $ 10; people started buying the things; then I started getting "orders" ! All in all, I sold walking sticks for about 3 years; sold hundreds of the things; on average, I had like 20 or 30 minutes "labor" involved, a can of stain now and then, and about 24 inches of raw-hide lacing "remnants" for the loop on the top end; after the first year, they started at $10, and went up to $25; (nothing fancy); I did pretty good; but eventually, I just got tired of making them; But I had a better idea ! I read a LOT of books; I was starting to run out of space for my books, so I went into the "used book business"; (all at the antique shop) after messing around with antiques for a couple of years, you start finding more and more "sources" for "obtaining" things; I found a "dynamite" source for used books; a few were "so much a pound", (which can be good sometimes, but books weigh "a lot" ) ; my "dynamite source", all "hard backs" were 50 cents, all paper backs were 25 cents. I sold hundreds of paperbacks for $1, $2, $3, etc; my all-time "record" was a big, 12" X 12" X 1" thick paperback about Bobby Knight; (former head coach of Indiana U., with one NCAA national title); bought the thing on Saturday for 25 cents; put it on the shelf Monday at 10 am when we opened up, and a lady had it back to the cash register at 10:10 (ten minutes later), and was "thrilled" to get it for $26.75 ! ( Bobby Knight has been my all-time favorite coach ever since !)

I'm also very much "into" rocks; I LOVE rocks ! Been dragging rocks home from all over the U.S. I very rarely sell one of my rocks; I have this lovely round rock that I found in the Kern River in California, about 20 yrs ago; the thing is a bit bigger than a basketball, and just as perfectly round, only it's "oblate"; (think of a basketball with a 200 lb guy sitting on it); it's still round side to side, just not as big, top to bottom; this rock is like that; it's very smooth, after a few million years in the Kern River, (where rocks the size of houses get moved by the water every spring) Anyway, I took the rock to the antique shop, where it sat for a year or two, and people were always trying to buy it. (Everyone had strict orders, DO NOT sell Charley's big rock !) It's just to "look at" ! Finally Miss Arlie says one day, "you have LOTS and LOTS of rocks ! Why don't you sell one now and then ? I thought about it some; no way am I gonna sell my round rock from the Kern River ! But I MAY sell a big snow white quartz rock from Arizona; (I have a few of them) So I took this beautiful white quartz rock up, put a sign on it, "Mingus Mtn. Arizona, 85 lb white quartz rock, $100; (firm) (I'm thinking, no one is gonna pay a hundred bucks for that rock !) ( I was wrong...........some d****d lady bought my rock !) But I still have the big round one from the Kern River.

If I ever get out to Vegas with my Dodge dually, I may take that big round rock to Rick's pawn shop and ask him what he'd "loan" me on it ?

Anyway, that's how pawn shops and antique shops "work"; they just sell "things" that used to belong to "someone else" to "somebody else".

Charley



Stupidity: Doing the same thing over and over and over again and expecting a different result; Albert Einstein
User currently offlineKiwiRob From New Zealand, joined Jun 2005, 7036 posts, RR: 3
Reply 5, posted (1 year 11 months 2 weeks 5 hours ago) and read 3713 times:

What gets me is that some of the people taking goods into Rick's Pawn shop could probably get a much better return selling the item in ebay, on a re-run yesterday a guy had 20k worth of transformer toys, Rick offered him 10k, he declined. Surely it would have been a better bet for the punter to sell them on ebay.

User currently offlinearmitageshanks From UK - England, joined Dec 2003, 3599 posts, RR: 15
Reply 6, posted (1 year 11 months 1 week 6 days 21 hours ago) and read 3581 times:

Quoting GEEZER (Reply 4):
Charley

Your post has to win for the most "quotes" ever. "Congrats"


User currently offlinedl021 From United States of America, joined May 2004, 11446 posts, RR: 76
Reply 7, posted (1 year 11 months 1 week 6 days 21 hours ago) and read 3556 times:
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Pawn is not loan, strictly speaking....you are pawning the item. Different set of rules and laws governing this.

Most pawn brokers will fund you 20% of the value of the item, and will offer more for an outright purchase.

It's a thirty day transaction (at least in Georgia), which must be renewed each month, with pawn fees (defined by some states as interest) each month.

Pawning items is a way to get cash advanced to you, but it's higher cost and you stand to lose all of your collateral if you don't redeem the pawn. It's good for people who have poor credit because these people are willing to take a chance with you. It's not so good if you are simply looking for money for your items. If you just want to sell, don't go to pawn shop...take it to craigslist or ebay or comparable.



Is my Pan Am ticket to the moon still good?
User currently offlineGEEZER From United States of America, joined Aug 2010, 1479 posts, RR: 2
Reply 8, posted (1 year 11 months 1 week 6 days 16 hours ago) and read 3476 times:

Quoting KiwiRob (Reply 5):

What gets me is that some of the people taking goods into Rick's Pawn shop could probably get a much better return selling the item in ebay, on a re-run yesterday a guy had 20k worth of transformer toys, Rick offered him 10k, he declined. Surely it would have been a better bet for the punter to sell them on ebay.



Rob; You're absolutely right ! However, 2/3 of the people who pawn things have no idea what eBay or Craig's list is, and even if they did, they wouldn't have a clue as to how to do it.

On Airliners, everyone has a computer; but there are untold millions of people who don't even have a computer; for example.........I have a very close friend in northern Illinois who posts on Facebook multiple times every day, as does his wife; yet they have no computer ! Are they "poor" ? Not really.........my friend works at a big oil refinery in Chicago, makes "buckets" of $$$$$, ( $1,400 for working a "double" on 4th of July ), but still no computer, and NO digital camera; they BOTH have iPhones........it's ALL they use ! That's the difference in people..........they all have different priorities.

I should start a thread about Craig's list..........I've had some pretty memorable experiences on it !

Charley



Stupidity: Doing the same thing over and over and over again and expecting a different result; Albert Einstein
User currently offlinehOmsaR From United States of America, joined Jan 2010, 1148 posts, RR: 0
Reply 9, posted (1 year 11 months 1 week 6 days 11 hours ago) and read 3412 times:

It works like this:

After your life has been destroyed by the owners of your company of employment, who made a bet with each other to see how your life would turn out, you go in and try and get some money for your watch.

Then you have the following conversation:

Pawnbroker: Burnt my fingers, man.
You: I beg your pardon?
Pawnbroker: Man, that watch is so hot, it's smokin'.
You: Hot? Do you mean to imply stolen?
Pawnbroker: I'll give you 50 bucks for it.
You: Fifty bucks? No, no, no. This is a Rouchefoucauld. The thinnest water-resistant watch in the world. Singularly unique, sculptured in design, hand-crafted in Switzerland, and water resistant to three atmospheres. This is *the* sports watch of the '80s. Six thousand, nine hundred and fifty five dollars retail!
Pawnbroker: You got a receipt?
You: Look, it tells time simultaneously in Monte Carlo, Beverly Hills, London, Paris, Rome, and Gstaad.
Pawnbroker: In Philadelphia, it's worth 50 bucks.
You: Just give me the money.
[looking in display case]
You: How much for the gun?



I was raised by a cup of coffee.
User currently offlineGEEZER From United States of America, joined Aug 2010, 1479 posts, RR: 2
Reply 10, posted (1 year 11 months 1 week 6 days 9 hours ago) and read 3379 times:

Any way you want to describe it, the pawn broker is the guy that has the "bucks", and you're the guy that has the "problem"; period.

Pawn brokers work under a very "loose" set of laws, (which differ greatly from state to state).

What 98% of people fail to realize, is the difference between "what something's worth", and what you can get out of it from someone else; big, big difference ! There is almost no such thing as "what something's worth"; You may buy a diamond ring from a jewelry store yesterday and pay $ 1,000 for it; that has very little to do with "what it's worth".........it's just what he was able to get you to pay him for it. Don't believe me ? Try it for yourself; go buy a $ 1,000 diamond ring, then take it to a pawn shop, or an antique shop, or any other kind of a shop, and see what they will give you for it.

Pawn shops are in business for one thing, and one thing only..........to make money; just as much as they can on every transaction. Just like a used car dealer. The only possible way you're ever going to get a "good deal" on any item you buy from a pawn broker, is if he takes an item in, "loans" a ridiculous small amount for it, and if it "sits around" for any length of time, you may possible get it for a reasonable price; (but the pawn guy still made a decent profit on it)


Charley



Stupidity: Doing the same thing over and over and over again and expecting a different result; Albert Einstein
User currently offlineKiwiRob From New Zealand, joined Jun 2005, 7036 posts, RR: 3
Reply 11, posted (1 year 11 months 1 week 6 days 9 hours ago) and read 3370 times:

Quoting GEEZER (Reply 8):
I've had some pretty memorable experiences on it !

Yes please, I always enjoy your posts.


User currently offlinevarigb707 From , joined Dec 1969, posts, RR:
Reply 12, posted (1 year 11 months 1 week 6 days 1 hour ago) and read 3311 times:

http://www.imdb.com/title/tt0086465/
Great movie...

Quoting hOmsaR (Reply 9):

Pawnbroker: Burnt my fingers, man.
You: I beg your pardon?
Pawnbroker: Man, that watch is so hot, it's smokin'.
You: Hot? Do you mean to imply stolen?
Pawnbroker: I'll give you 50 bucks for it.
You: Fifty bucks? No, no, no. This is a Rouchefoucauld. The thinnest water-resistant watch in the world. Singularly unique, sculptured in design, hand-crafted in Switzerland, and water resistant to three atmospheres. This is *the* sports watch of the '80s. Six thousand, nine hundred and fifty five dollars retail!
Pawnbroker: You got a receipt?
You: Look, it tells time simultaneously in Monte Carlo, Beverly Hills, London, Paris, Rome, and Gstaad.
Pawnbroker: In Philadelphia, it's worth 50 bucks.
You: Just give me the money.
[looking in display case]
You: How much for the gun?


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