posted on June 15, 2011 14:16
Many customers are disappointed with the prices pawn shops offer. Sometimes customers have widely unrealistic expectations, but of course pawn brokers are going to take advantage of unsuspecting customers every chance they get. While some might feel this is dishonest, pawn shops are in business to make money. So even though they provide a valuable service, they are not charities, and the very fact that you are attempting to pawn something tells them you are desperate.
You have to consider that while pawn shops make money extending loans, they also buy and sell items, and about 20% of pawned items end up on the sales floor. To sell these items, pawn brokers have to sell them well below their actual value. The whole reason people go to pawn shops to buy stuff is to save money. That means, there is realistically no way you are going to get anywhere near your item's actual value.
People claim they understand that pawn shops need to make money to stay in business, but many seem to think that 10-20% is a "reasonable profit." The truth is, if the shop ends up selling your item, they are probably going to sell it cheaper than that. This means that you can realistically only expect to get about 50% of your items value. Of course this figure will vary quite a bit based on your location, the pawn broker, and the type of item.
Electronics can be a bit of a nightmare for pawn brokers, and some pawn shops won't even deal with them. The problem is, not only are new electronics better, they are typically cheaper as well. You might have paid $250 for your digital camera a few years ago, but you can walk into Best Buy and get a better camera for half the price. If the pawn shop can't sell an electronics item dirt cheap, it might sit on the shelf depreciating at an alarming rate. Typically, a pawn broker is not going to offer more for an electronics item than they can get from a wholesaler, and if the local market conditions means few customers are buying that type of item, expect even less than that.
Gold items are a bit more reliable, but because prices fluctuate, pawn brokers have to consider the possibility that gold prices could suddenly drop. Thankfully, they can always sell it for scrap, so you might get as much as 80-90% of the meltdown price. However, customers have to realize that gold jewelry is typically 18 carat, which means it is only 75% gold. Don't expect the pawn broker to pay you for the other 25%, even though it might be silver.
Guns are a favorite with some pawn shops. Used guns don't really depreciate, so a pawn broker is going to feel more comfortable with a gun sitting around for a while than they would with a TV. When it comes to guns, type and condition are the main factors that determine price. Still, you have to remember that the shop has to make a profit, so don't expect to get as much from a pawn shop as you could get from a private sale. If you don't need money right away, consider selling it through a classified ad or through a website like GunBroker.com
Cars can also fetch relatively high prices from pawn brokers, but typically only places that specialize in cars will deal with them. Although they usually use the term "title loans," these businesses are really pawn shops that only deal in car titles. Since cars have very predictable values, and because customers are rarely willing to lose their car by defaulting on the loan, customers can expect to get 50-80% of their car's value. Be careful though, you don't want to find yourself unable to pay your loan and lose your car. Because of problems associated with title loans, some states have enacted specific regulation to avoid abuse.
One good way to find out the approximate actual value for your item is to look on eBay. Pawn shops have to compete with eBay, at least when it comes to customers that aren't desperate for immediate cash. Of course you have to realize that selling prices on eBay are much closer to what the pawn broker is going to sell an item for than what they will pay for it. Another good way is to simply do a Google search for you item in question. Obviously if you have a rare or unique item, finding a value is going to be more difficult, and it is possible that the pawn shop isn't going to want to deal with it anyway...unless you are dealing with the guys from Pawn Stars.
Finally, if you really need more cash, do your best to convince the pawn broker that you will certainly be coming back for your item. The more money they loan, the more money they make, but the last thing a pawn broker wants is to get stuck with an item they can't sell for a healthy profit. Still, this is a long shot, and it is very rare to get a loan for more than what the broker believes he can sell an item for and still make a profit.