Question 1

What is pawning?

Accepted Answer

One of the oldest professions in the world, pawning is the practice of loaning money on retained collateral. 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.

Question 2

How does a pawnshop work?

Accepted Answer

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.

Question 3

How do you determine the value of items?

Accepted Answer

1. We lend or buy based upon the current resale value of an item. This value takes into account a variety of factors including: How old is the item? Is it still desirable? Has a new product made it obsolete or decreased its value? For example: computers and game consoles out-date very quickly. A product that was worth $400 three years ago may be less desirable and/or many have very little secondary market. There may not be a market for some outdated merchandise. For example: many electronics get replaced with time, i.e BluRay players replaced VCR’s.
 
2. Is the item complete? Items are often purchased with accessories such as remote controls, AV cables, battery packs etc. If these items are missing it may affect the pricing of a possible loan – especially if the missing accessory contains controls that are essential to the operation of the item.
 
3. Are there factors affecting the ‘end cost’ 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.
 
4. Supply and demand plays a part in valuation. What is the current demand for the item – high or low? Do we have an overabundance of a particular item in stock? 
 
We attempt to loan the highest amounts that are feasible for our customers, within the current marketplace.

Question 4

Do most pawn customers lose their merchandise?

Accepted Answer

On average, over 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 customer whether to repay the loan.

Question 5

What is the difference between buying at a pawnshop and buying at a retail store?

Accepted Answer

Price. Price. Price.

Question 6

How can I be sure the merchandise I purchase at a pawnshop isn’t stolen?

Accepted Answer

Less than one tenth 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.

Question 7

Are there firearms in pawnshops?

Accepted Answer

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.

Question 8

Are pawnshop rates excessive?

Accepted Answer

Interest rates are state regulated. Kansas offers one of the nation’s lowest interest rates, with monthly percentage rates up to 10 percent. Please note, that to provide the service, all lenders must charge rates to 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 unremembered goods.

Question 9

Is all your jewelry from forfeited pawns?

Accepted Answer

No. We 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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