How a Pawn Shop Works

How a Pawn Shop Works

September 27th, 2011

From NWI Times Dot Com

How a Pawn Shop Works

According to Ameripawn pawn shop Owner Greg Engstrom, pawn shops have always filled the gap in loan providers. But today, loan seekers are going through one of the most difficult lending periods in recent history, and pawn shops are willing to make loans other lenders wouldn’t.

“A lot of people need the pawn shop right now, and we’re the only lender that wants to lend to them,” Engstrom says.

So how exactly does a pawn shop work? The meaning of the word ‘pawn’ is a loan, and so pawn shops are in the business of not just buying people’s possessions, but mainly lending people money.

“We work in collateral loans, which aren’t based on your previous credit,” Engstrom says. “About 75% of our business comes in loans, and 25% is from people just selling stuff.”

If you’re considering purchasing or pawning at a pawn shop, Engstrom recommends doing some research on the items in question. Researching will let you know the most accurate price for the item and help you in the bargaining process.

“We do research on every item we deal with, and we try to be experts on everything in the store,” Engstrom says. “But really, we’re just scratching the surface, and sometimes we price things incorrectly. It’s always a good idea to research and ask to make sure.”

If you want to pawn something, you should know exactly how much money you need to borrow before going into the pawn shop and be prepared to work with the pawnbroker to make sure the loan for your item is accurate.

“If you need $100, and the value of the thing you brought in is $90, then we can sometimes stretch it for you,” Engstrom says. “But if the gap is too big, you’ll have to add something to it.”

Engstrom says that because it’s durable and can last generations, jewelry is the number one item in a pawn shop. Jewelry is often the most valuable thing a person owns, which is why it’s also one of the most pawned items. Jewelry styles change often, too.

“If people aren’t wearing yellow-gold, they can come in and find something in white gold,” Engstrom says.

But pawn shops have much more than just jewelry; you can find great deals on household tools, lawn equipment, video games, TV shows, musical instruments, antiques, golf clubs, an endless list of electronics, and many items you wouldn’t expect to find at a pawn shop. Engstrom recommends that if you’re on your way to purchase something new, stop by a few pawn shops first to see if they have it.

“People would be surprised at how diverse the items in a pawn shop are,” Engstrom says. “We deal in whatever comes in.”

Engstrom notes that Ameripawn’s staff often knows even more about the items in their store than normal retailers because they must do extensive research on each item. Pawn shops will also bargain with you for a fair price.

“We test everything that comes in, and if a customer wants to try it out, we’ll help them hook it up in the store,” Engstrom says. “We try to go above and beyond to help someone find what they’re looking for.”

At Ameripawn, you can test CDs right by the rack in a CD player with headphones. Many pawn shops, including Ameripawn, will also hold items and put things on layaway for you. Engstrom also says Ameripawn works with the police and has procedures in place to make sure they don’t buy items which they suspect might have been stolen.

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