Pawn or sell – Here’s What You Need To Know


Pawn shops typically buy anything that is valuable but one of their most favorite items is gold Jewellery. Their business model is a cross between money lending and retail selling. It is the one place that offers people a chance to talk out easy short-term loans to get the cash they need or to sell something of value.

If you have gold Jewellery, you can pawn it for cash but if you are not particularly attached to it you can sell. A pawnbroker a will assess your jewellery and give you an estimate of what it’s worth. He or she will then offer you a price for it. As a customer you can either accept that price or try negotiating for more. Most pawnbrokers might be willing to negotiate up to a couple more dollars but they won’t go nowhere close to the true value of the item. You need to be realistic, pawnshops still need to make a profit.

Pawnbrokers primarily offer loans against valuables. If you are not ready to part with your gold Jewellery just yet but you are in urgent need of cash, then pawnbrokers can give you a loan that you have to pay back within a certain period. If you don’t pay the loan back in time, you’ll forfeit the pawned items and the pawnbroker will have to sell the items. Some pawnbrokers will allow you to renegotiate the terms and give additional time, but this will cost you more. You could sell your gold jewellery out-right. If what you have to sell is in high demand, a pawnbroker may offer you good money but if it’s something that may be harder to sell or something they already have too much of in their inventory, they might offer you some money but it will not be significant.

As mentioned , the primary business of pawn shops is to loan money using gold jewellery and other valuables as collateral. Unlike gold buyers who buy gold jewellery to have it refined somewhere down the line, pawnbrokers loan against jewellery in good condition to resell. The more pristine a piece of gold looks, the better the price you’ll get. Once the loan has been paid in full, the pawnbroker will give the items back. If however you fail to repay the loan, the pawnbroker will have no choice but to sell these items.

Pawn shops also offer customers the option of selling their valuables outright. However, pawnbrokers make less money this way. This is because their business model is based on making profit with short, collateral-based loans secured by valuable items.

Pawnshops charge higher interest rates than banks do on personal loans but people who don’t have the right credit score or cannot afford to wait days for a bank to go through the applications will find pawn loans quick and convenient. The repayment period can vary from 30 days to 6 months. If you cannot afford to repay the loan you forfeit your precious valuables. Close to 80% of people who go to pawn shops for loans pay them back and recover their precious products.

Pawnshops typically offer 30 to 60% of the value of the pawned items. They have to consider their overhead costs, the resale market for a particular item, etc. They make less money from people who sell outright than from people who pawn. Offering Pawn loans is after all the core of their business. They don’t have to spend time and other resources to sell pawned items and they make a profit from the loans. When they buy your gold, it adds to their inventory and they have to work at reselling the items for a good profit.

There are online pawnshops that you can sell your jewellery and other valuables to. These are not that different from brick-and-mortar establishments with the exception that the jewellery needs to be shipped to the pawnshop. This could take longer and might not be ideal if you need money quickly.

Pawnshops offer quick cash with no credit checks. The downside is that they offer less rates compared to gold buyers. The other point that people gripe about when it comes to pawnshops is that they tend to employ staff that has little knowledge about precious metals. With the variety of items that pawnshops carry in their inventory, not every salesperson will be a gold expert but they cannot be expected to be able to know off-hand what certain things are worth. So, pawn shop staff knowledge tends to be general.

The staff always seems to be under pressure to make a sale and could immediately launch into haggling mode. However, this is not true for all pawnshops. There are some establishments who take pride in their work and put customer service above all else. So, they will avoid making you feel harried.  Most do expect you to negotiate what you want, so the first offer is probably not the best and only offer a pawnbroker can offer.