Folks are out to get pawn shops
July 11th, 2007 | by mbhunter |Never thought that there was a war on pawnshops, but apparently there is, as reported by the Christian Science Monitor.
Granted, I’m on the “good” side of the transaction, in that I buy stuff at pawnshops rather than take my stuff there as collateral for a high-interest loan. The pawnshops that I frequent are clean and the employees are friendly and professional — which is what many owners are striving to do in light of strong opposition of their trade, according to the article. Some localities are sending clear signals through prohibitive zoning and truly onerous license fees ($12,000 a year!?) that pawnshops are not welcome.
Some things about pawnshops that weren’t mentioned in the article:
- They take a lot of cash. The way pawnshops get their inventory is they buy and acquire from individuals. Because of competition, they can’t get items for next to nothing, so they have to pony up.
- The amount paid by pawnbrokers for some items is decent. Some pawnshops I know will pay up to 90% of spot price for gold items. After shipping and listing fees, it’s hard to do much better than that on eBay.
- There are holding periods for some items. Precious metals need to be held for 15 days before they’re sold or before any customers are even allowed to inspect them. (This is true in my state.)
- It’s an easy market for stuff you don’t want anymore. If it has some value, they’ll take it for a discount. It’s probably what you could expect to receive in tax savings if you donated it, or what you’d expect to get for the item at a yard sale.
Pawnshops fill a need — just like payday loan places do, frankly. But pawnshops also provide a service for bottom feeders like myself who like to get good deals on merchandise. Our county, I recently found out, refused a license to a pawnshop owner. But the county approved a payday loan place. Pawnshops must have a worse reputation than I think.
I’d hate to see the ones that I frequent go out of business because of the NIMBY principle. But then again, not everyone thinks the same way I do, either. (Which overall is probably a good thing. 
)
7 Responses to “Folks are out to get pawn shops”
By mapgirl on Jul 12, 2007 | Reply
It used to be the place where junkies to pawn things for money to buy drugs. So it has the taint of moving stolen goods. But for the poor that use it to make rent this month and then buy back their pawned item, could it be any worse than the payday loan place? Not really.
By mapgirl on Jul 12, 2007 | Reply
Ooh. Another thing. I know a guy who worked in a pawnshop. They helped him get his certification for grading gems so he could accept jewelry. Through that training, he bought his fiancee an absolutely gorgeous sapphire engagement ring for a great price. Her stone is very high quality because he knew what to look for himself rather than trust the dealer.
By JustBeth on Jul 12, 2007 | Reply
I’ve never been to a pawnshop for either side, but my dad went when he was looking for a computer (he didn’t buy one; he felt the pawn shop marked the one he wanted to a higher value than he felt it was worth–Dad’s cheap). I think the one advantage that pawnshop has over a payday loan is the power of choice. With a payday loan, you give up money at whatever rate. If you don’t use the payday loan properly, when it comes time to pay it back, your short money again, so you need another one.
With a pawnshop, you choose the item(s) of value that you can most do without, to get the money you need.
But I suppose the problem is that you take out a loan for a payday loan. Anyone can take your television and bring it to a pawnshop.
By Gaming the Credit System on Jul 12, 2007 | Reply
I think that a lot of items (electronics, etc.) have to go through a waiting period in my state. Pawnshops receive regular police reports on stolen goods in the area, and have to make sure that the items don’t show up on a list for a couple of weeks at least.
I’m a regular at a few pawnshops…. I’ve bought a couple of guitars, stereo equipment, tools, etc. at very good prices. I’ve never had to pawn anything, but I remember at least once in my childhood when my dad put his hunting rifle in hock to pay the bills. I will probably buy a hunting rifle in the next 6 months or so, and pawnshops will be one of my primary places to look for one.
Really I don’t see how they’re any worse than other used-goods shops, such as Play It Again Sports, GameStop/EBGames (used video games), etc. All of those places are quick and easy places to sell your stuff, but you’re not going to get top dollar. The bonus of a pawn shop is that you can buy it back within a certain amount of time.
By Helen on Jul 16, 2007 | Reply
I once had a laptop stolen and the police found it at a pawn shop. This was a laptop that was less than a year old and had cost $2000 new; the thief got about $100 for it. I think pawn shops serve legitimate needs, but should probably be subject to stricter regulations, such as a requirement to check proof of purchase or ownership before accepting pawned items.
By LTD Investments on Jul 23, 2007 | Reply
Helen,
Because the theif took it to a pawn shop is probably the only way you were going to recover it. We (I own two pawn shops) are required by law to report all buys and loans to local law enforcement. In most states we are the ONLY ones that report to LLE. If the thief had taken it to a flea market, second-hand store, computer store, or others it would probably have never been recovered. As to pawn shops being the pace for stolen items to show up is a media feed and mis information by some law enforcement. The state of Oklahoma credit agency looked at almost 10 years of pawn tickets and police pickups and the rate of stolen was less than .1 %. That means for $100,000 of items pawned less than $1,000 of it was stolen. The state of Ohio did a similar study and with a larger population and more urban than Oklahoma the rate was still less than 1.5% or $1,500 per $100,000. Most of the stolen items are also by family members. There was a city in Florida where the police opened a Buy-Sell store and after letting it be known that they would take anything no matter what they only arrested 18 people. But even when they opened a Buy-Sell store and not a pawn shop the media would only say pawn shop. A Buy-Sell is not regulated in most states like a pawn shop. Also thiefs get the word that a shop will take anything and they will go get anything. A pawn shop takes a persons ID and the person signs a ticket.
By Gena on Jan 2, 2008 | Reply
In Colorado it’s 30 days for any item.
Check out this post on how the business works.
http://pawninfo.blogspot.com/