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The Truth About Pawn Shops

People tend to think of pawn shops as a last resort. The stereotype is seen in our pop culture in books, movies, and television. Characters are down on their luck and in need a quick infusion of cash, so they grab whatever valuables they can and head to the nearest pawn shop. Once there, they are met with subpar service by a nasty looking guy who takes advantage of their desperation. It’s enough to make anyone think twice about visiting a pawn shop.

While those types of pawn brokers do certainly exist, they aren’t the norm. For many buyers, sellers, and loan seekers, pawn shops provide a safe and consistent place to do business, offering clear terms and benefits not available elsewhere.

There are certainly some of those bad ones out there, but understanding how pawn shops work and what to look out for when dealing with them can go a long way toward making sure you get a good deal that won’t negatively impact your credit or put you into debt.

Make Sure It’s Legit  

There are several ways to check out local pawn shops near you before even leaving the house. Most businesses these days have some type of website, and often have reviews listed on local sites and apps like Yelp. While this is only the first step in determining any company’s legitimacy, it’s a good place to start.

Some important information to look for and questions to answer before visiting:

  • How long has the pawn shop been doing business? If a pawn shop has only been open for a couple of years or doesn’t have many positive online reviews, they may not be a good choice.
  • What is the particular shop’s specialty? Some pawn shops specialize in certain aspects of trade, like musical instruments or furniture or technology. Make sure the shop you’re looking at offers the services you need or will be interested in what you’re selling or pawning.
  • Are they affiliated with reputable business organizations? Most pawn shops will boast expertise, but can they back it up with actual licenses, certifications, and endorsements?

GEM Pawn Brokers has been serving New York since 1947 when Martin Kaminsky established the first location. That’s almost seventy years of experience in the business, and, with twenty-six locations across six boroughs, they’ve got the right network of expertise to meet your needs whether you’re looking to buy, sell, pawn, or have goods appraised.

In addition, GEM Pawnbrokers is aligned with many community and worldwide organizations aimed at improving business ethics and expertise, such as the NYC Business Improvement District, American Numismatic Association, Jewelers of America, the National Association of Professional Appraisers, the Society for Professional Watchmakers, NYC Police Activities League, and each shop’s local Chamber of Commerce.

Know What You’re Looking For

It’s generally good financial advice for consumers to have a plan and a budget when making large purchases or sales. The same goes double for pawn shops.

Before you decide to bring your stuff to a pawn shop, if you’re seeking a pawn loan with something you own as collateral, or hope to sell your property to a pawn shop for cash, it’s important to ask yourself:

  • Are you looking to sell or take out a pawn loan? A fast cash pawn shop loan is a great way to get money in your hand without threatening your credit score, but you’ll need to pay the interest and the principal amount of the loan at the end of the loan term in order to get your property back. If you don’t, whatever you put up for collateral will become the property of the pawn shop. Consider selling your stuff outright, rather than pawning, if the items in question are important to you or if you’re not sure about the interest rates.
  • Can you prove ownership? The employee handling your pawn loan or sale will need to verify that you own whatever it is you’ve brought to the shop, to make sure that they are not becoming involved in the sale of stolen property. They’ll ask a lot of questions to get a feel for your authenticity, as well as the item’s legitimacy. For high-dollar loans and sales, they may ask to see paperwork, such as a proof of purchase; don’t be offended—the shop is just covering its bases.
  • How much is your property actually worth? Some items put up for collateral or sale may have deep personal value to you but aren’t worth much to anyone else. Remember, cash pawn collateral needs to have demonstrable value in order to get you any kind of sizeable loan. Real gold and silver jewelry, diamonds, watches, and other items such as these often carry consistent value and can fetch a nice rate.
  • How much cash do you hope to get for your items, and how low are you willing to go? As with any transaction, you’re not obligated to take whatever offer is given for your collateral. You can always walk away; even if you really need the money, sometimes you just won’t be able to get the amount of cash you’re looking for. Knowing the dollar amounts before heading into negotiations will help you keep your head on straight while you’re making the deal.

A stereotypical shady pawn shop will always try to swindle you with lowball offers and predatory lending practices, but good-quality shops like GEM Pawn Brokers don’t need to do this in order to stay in business; instead, they build customer loyalty and do business all across the city by giving fair offers and the lowest possible interest rates for pawn loans and sales transactions. They know that it pays to have a good reputation, and that word of mouth from happy customers is the best type of advertising.

Buying from Pawn Shops

Most people know that pawn shops offer loan services and buy merchandise from people looking to make some quick cash and that some provide appraisal services for jewelry, diamonds, watches, and other similar items for a small fee. It’s pretty common knowledge, especially for anyone who grew up in New York with its broad range of local pawn shops and services advertised all over the place.

However, many people don’t think of pawn shops as somewhere to go shopping, which is funny when you think about it. After all, pawn shops are looking to buy merchandise for a reason: so that people can come in and buy it! Selling things that were purchased from the public and acquired through defaulted pawn loans is a major way that pawn shops stay in business.

Pawn shop prices are often very reasonable, compared to traditional storefront businesses or online retailers, especially for things like:

  • DVDs, CDs, and really any method for watching movies or listening to music can often be had for not a lot of money at a pawn shop. These are hard to sell individually online, so many pawn shops that carry them mark them down low so that they will move quickly. You can find really good deals on the pawn shop sales floor if you’re looking to kill an afternoon watching movies or looking for an inexpensive gift item.
  • Musical instruments. Big box music stores, where most people automatically go when looking to buy guitars, basses, drum sets, mixers, effect pedals, and other music gear, typically charge full MSRP for their products. At a pawn shop, you can try things out before you buy them and can often get great deals on rare or classic instruments.
  • If you go to a jewelry store, usually the inventory will be tuned in to whatever is in style at any given moment. If you want something cool or unique that really stands out, a pawn shop can be a great place to look. In addition, most reputable and certified pawn shops are experts when it comes to identifying and appraising real gold, silver, and diamonds, so you know your purchase is legitimate.

There are plenty of reasons to visit a pawn shop that have nothing to do with getting a loan. Visit any one of GEM Pawn Brokers New York showrooms and see for yourself what kind of treasures can be found on the shelves.

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