Here’s the problem, you need money, fast. You don’t have too many options but one of them might be to use a pawn shop to make a loan against something and get the fast access to cash you need to take care of a responsibility.
Now, here comes the question that you might ask yourself. Do pawn shops give you good money or a fair value for your items when you make a loan against them or sell whatever it is?
The answer is yes in most cases and that having been said, it’s yes because of what a pawn shop really has to do and what it actually costs them to turn around a resell something that was on loan if it forfeits.
I know that might all sound a bit complicated but don’t worry, I’ll explain it to you so that it makes sense.
Before we do though, I’m going to address something specifically and that is when it comes to something like jewelry. Some people have appraisals for their jewelry and they think that is what the item is really worth when in actuality it’s not.
An appraisal is simply a way for an insurance company to look at an item in the sense of what they would have to spend in a retail jewelry store if they had to buy the item brand new. That includes all of the jewelry store’s markup, marketing, expenses, etc. It doesn’t actually have anything to do with what the item is really worth which is the amount that a pawn shop looks at when making a loan or buying something.
So with that in mind, let’s look at the other things pawn shops handle and if you are really getting good money for those items when you make a loan against them or when you sell them outright.
How Pawn Shops Make Their Offers
In order for a pawn shop to know what it can offer you for your items, the first thing that they have to know is how much they could turn around and sell that item for if they were put into a position where they had to forfeit your loan and recovery their money.
There’s virtually no way a pawn shop can make an offer on an item without knowing that one really important detail.
So when you take something into a pawn shop, the first thing that they are going to do is make sure it works and see how well it works. After all, you can’t really expect a pawn shop to buy or loan on something that isn’t working properly, can you?
But once they’ve figured out how well your items work, they are then going to look at how complete it is. If there are missing parts or things that the item was supposed to have with it or that came with it when it was new, that’s going to work against you because they can’t afford to pay you for something that you aren’t handing them when you make the loan.
After that, they will determine what a similar item in like condition and completeness has sold for on the open 2nd hand market. This is normally done by using a site like eBay to see what those items have actually sold for. Mind you, they aren’t looking at buy-it-now prices or anything like that. They want to go see how much the actual sold listing sold for and make sure that your item is like those in terms of condition and completeness.
They will then make you an offer on your items that will typically be between 40-60% of the going eBay value for them. If you are selling something, then you can pretty reasonably expect close to 60%.
Is That A Fair Price
Yes, more often than not that is going to be a perfectly fair and reasonable price and let me explain why.
Once the transaction is done, that pawn shop is going to have to turn around and sell your item and they very well may do so on eBay as many pawn shops do these days.
That means that they are going to have to pay an employee to clean you item, picture is, list it, describe it, and then do all of the follow up like answering questions about it during the auction itself.
Further more, once the item sells, they then have to pack and ship the item – and I’m not sure if you have heard or not – but boxes and packaging materials aren’t free.
In addition to all of that, there’s the % that paypal charges you every time you sell something on eBay as well as eBay’s own listing fee’s.
By the time everything is said and done, what a pawn shop may have been able to buy with a 40% difference between the buy and sell price get’s reduced down to around 20%, give or take, depending on the item – which isn’t very much for a retail business at all.
But, by selling your items to a pawn shop as opposed to selling them on eBay yourself, you don’t have to deal with any of the headache or problems that pawn shops normally deal with when it comes to selling used merchandise online.
So, yes, there is a price difference between what a pay shop will pay you for an item and what that item may sell for on a site like eBay, but it is a perfectly reasonable difference.
The Bottom Line
Pawn shops are great places that really heliport the members of their communities during times of need.
That having been said, they are still a business and not a charity. They exist to make money and that’s something that they are entitled to do.
However, that doesn’t mean that they are ripping you off. Typically speaking the amount that a pawn shop will offer you for your items is fair and reasonable under the circumstances.
It’s the reason that pawn shops have developed such strong relationships with their communities and develop loyal customers for decades. There’s no way they could do that if they were just out there low balling everyone.
So when asking yourself if a pawn shop pays you good money, the answer is yes, particularly when you understand all of the costs associated with trying to turn around and resell the item down the road.