How the Pawn Process Works

Put simply – customers pledge property as collateral, and in return, pawnbrokers lend them money. When customers pay back the loan, their merchandise is returned to them. Pawn loans are made on everything from jewelry to electronics. If the customer elects not to redeem their collateral, there is no credit consequence to the borrower and the items are sold at a discount to retail consumers.

    The average pawn loan is $75
        (with the vast majority of loans being in the range of $20-150)

    The contract period is 60 days total
        (it’s actually a 30 day contract, with a 30 day grace period)

    Total monthly service charges are 25%
        (this includes 2%/mo. interest, +storage fee’s & overhead allowance)

State laws prescribe what information is required from the consumer to enter into a pawn transaction, and may include; Name, Address, Phone Number, DOB, Gender, Ethnicity, Govt-Issued ID, Date/Time of transaction, and a complete description of the collateral (including any available serial numbers or owner-applied markings). In addition, customers have to show their I.D., sign the pawn ticket & give a thumbprint.

This information is regularly transmitted to law enforcement, which dramatically decreases the likelihood that a thief would bring stolen merchandise to a pawn store. The national average for stolen items found in pawnshops is less than one half of one percent (and DPI figures are lower than that). So if 99.5% of stolen property is NOT going through pawnshops, where should you look ??? Jewelry Stores (who buy direct from the public), Flea Markets, Gold & Silver Buyers, Gun Shops, Gun & Knife shows, Repair Centers, Used Sporting Goods stores, 2nd Hand stores, Consignment shops, Collectible stores, and sometimes in Antique shops.