Pawn Shops seem to have gotten a bad reputation over the years, which could be due to people not understanding how the process works. These establishments have helped many people out in their times of need by giving them a way to get the money they need quickly and without all of the hassles typical loans can bring.
There are three main types of transactions that occur at a pawn shop:
1) People can borrow money from a pawn shop quite easily. The amount of the loan will be determined by what they have to put up as collateral. The shop will retain custody of the item that was used as collateral for a set amount of time. This time period will vary between shops. If the loan is repaid within this time period, the item that was used as collateral will be returned to the customer, and the transaction is complete. If the customer fails to repay the loan within the period of time agreed to, the item will be sold so that the shop can recoup the money that was lent out.
2) Selling unwanted merchandise is another type of transaction that occurs. Customers bring in their items, and the shop will set a price for the item. Typically, this is a negotiation between the customer and the shop to determine a price that is fair to both parties. Once the amount is agreed on, the shop purchases the item and pays the customer, and the transaction is complete.
3) The third type of transaction that commonly occurs is the buying of merchandise. These shops will display the products that they have purchased from their customers for other customers to buy. Often times, the prices set are reasonable enough to make purchases possible that would otherwise be too expensive for people to buy in retail stores.
Pawn shops are good for much more than borrowing money. They provide consumers a place to sell their unwanted items and purchase new items, as well as borrow money when they need it. If you have never been to a pawn shop, it is about time you go and see what you have been missing.
