Frequently Asked Questions about our business.
Pawn is the age-old practice of loaning money on retained collateral. Pawn is one of the oldest professions in the world. The service we offer is unique because regular lending institutions (banks, savings and loans, credit unions) will not make small loans. They’re only interested in large loans.
Pawnbrokers lend money on items of value ranging from gold and diamond jewelry to musical instruments, televisions, tools, household items, etc. These items maintain their value over a reasonable period of time. Usually, loans are small averaging between $75 and $150, although these can be as small as $10 or as high as several thousand dollars depending on the value of the collateral item, and the need of the customer.
How do you determine
the value of items?
For example: video game systems outdate very quickly, a product that was worth $400 3 years ago may be practically worthless because no one will purchase an outdated platform. Another example would be the nearly 50% depreciation in the value of new VCR’s as DVD becomes more mainstream.
3. Are there factors effecting the ‘end cost’ of the item?
4. Supply and demand plays a part in value evaluation. What is the current demand for the item - high or low? Do we have an overabundance of a particular item in stock?
Are there outside issues effecting the market value of the item?
This may include any possible repair or
appraisal costs. These issues may reduce the possible resale value or increase
the overall cost of an item and as
such lower the possible loan amount.
On average, 70 percent of all loans are repaid. Repeat customers make up most of our business, similar to any other lending or retail establishment. We know the majority of our customers because they often borrow against the same items over and over again. It is the choice of the customers whether he/she elects to repay the loan.
Price. Price. Price.
Less than one fifth of one percent of all collateral is even suspect as having been misappropriated in any manner. Thieves and robbers are a pawnbroker’s worst enemy. Pawnbrokers work closely with local law enforcement to catch and prosecute these perpetrators. Pawn tickets are electronically sent to Leads On-Line. Leads On-Line is available nationwide to any local Police Department on a daily basis. A customer must provide identification when obtaining a loan. These precautions decrease the likelihood that a thief would bring stolen merchandise to a pawnshop. Loan officers are trained to look for signs of stolen property. It is not the intent or desire of the pawnbroker to accept potentially stolen merchandise under any circumstances.
Most pawnshops are registered firearms dealers with permanent places of business. Pawnshops comply with all Federal (ATF) regulations as well as furnishing local law enforcement with information regarding every transaction. As registered licensed dealers, pawnshops comply with the 3-day waiting period and background checks required by the Brady Bill. Federal firearms regulations require an individual to be 21 years of age to purchase a handgun and 18 years of age to purchase a long gun. Pawnshops provide a unique public service by taking guns as collateral for pawn loans. They are the only business that actually takes guns out of circulation and keeps them locked up in secured vaults.
Interest rates are state regulated. Kansas offers one of the nation's lowest interest rates, with annual percentage rates (APR) up to 10 percent. Please note, that to provide the service, all lenders must charge rates commensurate with risk, size and duration of the loan, collateral offered, and recourse. Pawnshop loans are small dollar, high risk, and short duration loans. The item stands as the sole collateral offering no other recourse. And pawnbrokers are liable for replacement value if something happens to the item in their care. There are no hidden charges as with other lending institutions. On the other hand, pawnbrokers cost basis is far greater. They incur cost for security, handling, storage, and regulation not incurred by others. Due to the 30% of pawnshop customers that elect not to repay their loans, pawnbrokers are forced to turn their "bad debt" into a retail center to recover their cost. Other lending institutions do not incur retail cost including additional floor space, gondolas, counters, personnel, advertising, shoplifters, retail competitive cost, and new merchandise cost to supplement the unredeemed goods.
No. We do buy a great deal of jewelry from estates, and from folks who simply want to trade in or "up" for something we're offering for sale. We also offer a selection of new items that we frequently sell. For example, chains for pendants (snake, box, wheat, etc.) and diamond stud earrings are hand selected and paired together.
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