Do You Want To Sell It or Pawn It?
What does that mean to “pawn” an item? Millions of people are addicted to Hardcore Pawn and Pawn Stars, the latest TV shows featuring pawn shops. Most people do not truly understand the difference between “pawning and selling” in a pawn shop. It is quite simple. If you want your item back, you are “pawning” it. If you do not want it back, you are “selling” it.
All pricing in a pawnshop is based on how much and how quickly the pawnbroker can resell your item. If you know the original retail price or the appraised value of your item it can be helpful to the broker. However, this price information you have is not indicative of what you will receive in exchange for your item. What a broker takes into consideration is the length of time they may have to hold your item before it sells. If the pawn shop believes they can sell your item quickly, more likely than not, you will receive a higher price for your item, than if they believe it will take longer to sell.
If you choose to “pawn” your item, instead of “sell" it, the value of your item is determined in much the same way as if you were selling it. Instead of getting a purchase price for your item, the pawnbroker will offer you a loan amount. This amount will be a percentage of the current market value of your item. You could also call a “pawn loan” a short term, collateral loan. The terms of the pawn loan vary greatly from pawn shop to pawn shop. Some shops offer one-month loans with interest and principle due in 30 days, others offer multiple-month loans with interest either due each month or at the end of the loan period. No matter what the loan terms are, when you pay the lender all the interest owed, plus the original loan amount, then your item is returned to you. A bit of advice if you are going to pawn your item: ask the pawnbroker about any additional fees related to your transaction. Often times there are additional storage fees or service charges that are not mentioned upfront.
So no matter which route you choose, “to pawn” or “to sell”, be sure to shop around to get the best value for your item. Each pawn shop has its specialty, and because of that, the value of your item may differ significantly.
Post by Don Battis
is the CEO of Pawntique.