COMMON QUESTIONS

What is a pawn shop?

A pawn shop is a used goods store that also issues loans. They’ve been around for thousands of years. Scholars believe they started independently in many different regions. The first were likely formed in ancient China to serve farmers, and that they operated out of monasteries. Farmers would visit these pawn shops to buy and sell used farm equipment, and to get short term loans using their tools as collateral. They also appeared in ancient Greece and Rome, probably by way of the Middle East. In Europe, the practice came to be regulated by the Catholic Church in the Middle Ages. Pawn shops exist today in many cities across the United States, and in countries around the world. They’ve existed in America for hundreds of years, and grew significantly in popularity during the Industrial Revolution in the 19th century. Although few shops today deal principally in farm equipment, many still deal in other industrial appliances and tools. However, most of their purchases are electronics, jewelry, automobiles, firearms in some regions, and antiques.

Why would I use a pawn shop?

We are so glad you asked. Pawn shops would be valuable to you in three ways. First, if you want to sell an item quickly with lots of convenience. Pawn shops provide safe, clean places to sell your used goods very quickly. Because you’re getting cash quickly and not meeting someone in an alley, like on a peer to peer marketplace, you can expect to get a little bit less money for your item. It’s a trade off for speed, comfort, and safety. The second reason is that you’d like a loan. Pawn shops provide consumers with emergency or urgent financing when a bank is not a viable option. Pawn loans are superior to other kinds of short-term financing, like payday lenders. Pawn loans are better because unlike payday lenders, there are no hidden fees or massive, spiralling debts based on high interest rates. The worst case scenario is losing your item– which sucks, but is better than accruing thousands of dollars in debt. Fewer than 10% of pawn loans result in loss of the collateral item. The final reason is you’d like to buy high-quality used merchandise. Unlike peer to peer marketplaces, you can be confident that the inventory of a pawn shop is in good working order. Pawn shops have popular consumer goods from jewelry to electronics to appliances available for sale, and they’d love for you to buy from them. They’re great ways to pick up anything from the newest iPhone or Android phone to a luxury watch to a new set of power tools.

What is PawnGuru?

Pawn shops have very different specialties, and offer very different amounts of money (and prices) for the same items. Driving from pawn shop to pawn shop, we discovered that it varies on average by over 260%– an item that got $100 at one pawn shop was worth $360 at another. That’s why we built PawnGuru, a website where consumers can post their items for pawn shops to see, so they could receive offers and estimates before going into the store. We’ll bring you offers and information from multiple different pawn shops near you, so you can decide which shop is right for your needs.

How does a pawn loan work?