So you are thinking about buying an engagement ring at a pawn shop? But is it really a good idea? Let’s find out…
One of the many things that pawn shops do is sell high quality, high value, pre-owned jewelry. This can mean anything from necklaces, tennis bracelets and yes, engagement rings.
But is buying an engagement ring from a pawn shop a bad idea? There’s a lot of people that think that if you do, it will spell bad luck for your marriage.
The truth of the matter is that it is not ‘Bad luck’ to buy a pre-owned engagement ring. It’s not as if luck magically travels inside of gold in some kind of mythical way.
On top of it, it’s a lot smarter to buy an engagement ring at a pawn shop than it is to get completely ripped off at a jewelry store.
For those that don’t know, jewelry stores are extremely high-markup businesses. The typical markup in the retail jewelry industry is right around 1,000%.
So when you are walking through the mall, or visit your neighborhood jeweler, that ring which is priced at $1,999 may have only cost them between $149-$199.
Are you shocked? Probably considering that you’re on a site about pawn shops and are learning who the real rip-off’s in the business are. (Hint: not pawn shops.)
Why Do Jewelry Stores Charge So Much
So, you may have just stopped and asked yourself why it is that jewelry stores charge so much.
The reasons are pretty simple: they have to.
When you rent a large retail space in a mall for instance, your monthly rent can range anywhere from $12,000-$100,000 a month! On top of that, you have to pay the 7 or 8 employees, pay the utilities, etc.
The only way they can afford to be in business is to markup what they are selling by such a huge amount that they can both cover their expenses and be profitable by the end of the year.
Really, it’s not that jewelry stores are bad people or bad businesses; it just costs a lot of money to do what they do and as such, the customer has to pay for that.
People often wonder if it is a good idea to buy an engagement ring at a pawn shop. The answer is yes. A Pawn shop will save you a ton of money on an engagement ring and they carry a wide variety of styles to choose from.
You see, when someone comes into a pawn shop to sell a ring or make a loan on it, the pawn shop doesn’t really care what the retail price of the item was.
Pawn shops know that is a made up number by the original jewelry retailer with about 900% of it being their profit margin.
That’s why people think that pawn shops don’t offer a lot of money, but that couldn’t be any further from the truth. Pawn shops are normally offering a very good value for what the ring actually is worth in terms of the metal it is made out of and the diamonds in it.
That having been said, a pawn shop is only going to pay 10-20% of a ring’s initial retail value in most cases, which means that if the ring comes up for sale at a later point in time (to you for instance), in all likelihood, you are only going to pay between 30-40% of what the exact same ring would cost new at a jewelry store.
That’s obviously a huge savings that most people would be foolish to pass up.
Do Pawn Shops Carry Modern Style Rings
The next big question that I get asked about buying engagement rings from pawn shops is if the rings that pawn shop have are all old or outdated styles.
That’s not the case at all. Most people are also surprised to learn that the major jewelry stores all buy out of the same 3-4 major industry purchasing guides, which is why you see so many of the same styles from jewelry store to jewelry store.
Furthermore, people will often bring rings into pawn shops just weeks or months after getting engaged or married because unfortunately, life will still surprise you financially, even if you just got engaged or married.
Of the rings that come in, some of those will forfeit and become available for sale.
So a ring that was just purchased 6 months earlier from a jewelry store for $4,999 may be up for sale in a pawn shop show case for $750-$1,000.
Mind you, if you went to a jewelry store, they would still have the exact same style ring for sale because, after all, it’s only been a few month since they sold the one in the pawn shop’s showcase.
Additionally, while major jewelry stores are stuck ordering from the same books as everyone else, pawn shops will also get in custom made, designer rings from smaller, independent jewelers – give the pawn shop an even greater variety in styles to choose from.
In Conclusion
It’s not bad luck if you buy an engagement ring at a pawn shop. In fact, it’s a very smart idea as you will end up saving a lot of money on a modern style that is still probably for sale in jewelry stores today.
In addition, you may find a wider variety of styles that suit your taste in a pawn shop as their collection is made up of a much larger sampling of jewelry from both major outlets like those you see in the mall, and smaller jewelry stores that do custom work.
Mandy Dormain started working for Pawn Nerd in 2020. Mandy grew up in a small town in northern Tennessee. But moved to New York for university. Before joining Pawn Nerd, Mandy briefly worked as a freelance journalist for several radio stations. She covers politics and economy stories.
