If you haven’t seen it yet – I put a question page up on the blog so that you can ask me questions directly.
If you have a question about the pawn industry, just leave me a question and if it’s particularly interesting I’ll be happy to answer it in a blog post dedicated just to your question.
I had a question come in through the question form and since I work in the same state she’s from, I thought I would take a moment and answer it.
Q. How does a pawn shop work? I’m from Ohio and am new to the whole process.
A. When you are looking to make a pawn loan in Ohio, it is pretty straight forward.
There are some requirements that you have to meet in order for a pawn shop to do business with you.
- You have to be 18 or older
- You have to have a picture ID
As long as you meet those two requirements you will be able to do business with your local pawn shop.
Look At Reviews
You should look-up your closest pawn shop and take a look at their reviews on Yelp or other similar review-style sites.
Just be aware that most pawn shops will get unfair and sometimes negative reviews from customers unhappy that their loan was forfeit.
An unfortunate part of the business is that when a loan isn’t paid on, the merchandise may be sold or melted if a precious metal. Because of that, not all of the reviews you may read will be 100% fair to the pawn shops they are about.
Once you’ve found a location that you are comfortable with, call and get their hours of operation.
Pawn shops typically have ‘Business Hours’ and aren’t open like a 24-Hour Walmart. If you have jewelry or something that requires inspection, you should plan on arriving at least 30 minutes before their closing time.
It Could Mean More Money
Not only is it courteous, but it will give the pawn shop employee enough to time properly evaluate your item so that you can get the maximum amount for it.
If they have to rush through their inspection, they may offer you less for the item than if they had the time to do a full inspection.
Your goal should be to make them as comfortable as possible giving you the most money possible, or they will have to ‘play it safe’ and offer you a little less for your merchandise than it may properly deserve.
How Does A Pawn Work?
Once you are actually in the pawn shop and having you item inspected you will probably be given the option to sell you merchandise or just make a loan on it so that you can come back and get it at a later time.
If you decide to make a loan against your item, just be aware that you may get offered slightly less for it than if it were an outright purchase.
If that is still acceptable to you, you would have to repay the loan + 5% interest and $4 a month in storage for every 30 days it was in the shop. If you didn’t pay on it after 90 days, you would forfeit the merchandise and be unable to get it at a later date.
In other words, if you borrowed $100 you would have to pay $109 back within the first 30 days to get your merchandise back.
That’s Not So Bad
There are other similar ‘quick loan’ businesses out there that can charge much more for their services than a pawn shop does. because of that, some people have an unflattering opinion of these types of businesses.
It’s really unfair to lump pawn shops into this category of businesses however because of the regulations in place over the industry.
See with a pawn loan, it will always be 5% + $4. And if that’s too much for you, you can just give up the item without getting your bank or anyone else involved. It’s that simple.
If life gets in the way, the pawn will take care of itself.
The Nerd’s Experience
I love this business. I’ve seen the people that pawn shops have helped.
It’s one of the few industries out there that can really help people. If for whatever reason those people get really stuck and can’t pay back the loan – they won’t create even more problems. It will just go away, without further punishment or embarrassment.
Yes, you will lose your items. I understand, that’s not exactly a great situation either.
However, I would argue that it’s not that bad either.
- You aren’t going to go to jail.
- You aren’t going to have anything else on your credit report.
- We aren’t going to call and harass you at all times of day.
There’s really no industry like this anymore. It’s really a critical service to many depressed communities around the country where the people in them already have very few other options for temporary financial relief.
I realize that my opinion my not be taken as unbiased because I work in the industry. But having this point of view I get to talk to the people that it helps.
I feel that my opinion is especially valid because I get to see someone people put food in their children’s mouth and keep the lights on in the business because they were able to come to us for a short, quick and cost effective loan.
But that’s just my two cents.
If you have any questions or comments, feel free to leave them below.
Brian The Nerd