Some people almost instantly know and understand how pawn shops work. Others don’t and there’s nothing wrong with that. But if you are wondering how to pawn bullion, let me explain.
First of all, I’m going to assume that you already know that pawn shops love working with precious metals when they can. They are easy to price and easy to sell, most of the time.
Of course, there is no precious metal that is easier to price of sell that silver or gold bullion in most cases, since by very definition, it tends to be 99.999% pure.
That makes pricing it simple, as the pawn broker doesn’t have to account for purity. That having been said, don’t be surprised if they still scratch test your bullion.
Why you ask? Well, believe it or not, there is actually quite a bit of fake bullion out there on the market and pawn shops see it come into their stores fairly regularly.
It seems that ‘they’ (meaning the bad guys) will fake anything these days, and when it comes to precious metals, the amount of money they can make buy selling fake rounds and bars of plated metals to unsuspecting people is amazing!
That having been said, I’m going to give you a few tips that you can use when attempting to make a cash pawn loan on your bullion.
How To Get The Most For Your Bullion From A Pawn Shop
If you want to get the most for your bullion from a pawn shop, it really isn’t that difficult. Overall, bullion is a very easy item for pawn shops to work with.
The first thing that you will want to consider is the condition of your bullion. Is it badly scraped up? Is it heavily tarnished? Are there any other defects with it that the pawn shop might find objectionable?
If so, consider doing what you can do to clean it up some. I wouldn’t suggest polishing it as that can be considered ‘altering the finish’ which may detract from it’s value, but there’s rarely any harm in using a product like Tarn-X to remove any heavy surface tarnish that may have built up over the years.
Additionally, if your bullion is not from a well known manufacturer, or mint, try to bring any documentation with you that you may from when you purchased it. This can help authenticate your bullion and give the pawn shops a little information about what it is that you have exactly and where it came from.
Last, if you have any protective cases or bags for your bullion, it’s not a bad idea to include those when you take them to the pawn shop. That will help keep you bullion stored safely while it is in the pawn shop and the pawnbroker will probably appreciate that you took the time to properly safe guard your investment.
How Much Do Pawn Shops Pay For Bullion
This is a pretty common question and the answer will depend on a few factors.
The first is whether you are pawning it or selling it. If you are pawning it, you will almost always get less for it than if you were to sell it.
The reason is that when you pawn something, it could be months before it comes out of pawn should you forfeit it and be available for resale. If you renewed the loan for a prolonged period of time, it could end up being years before that bullion comes out for resale.
In these cases, the pawn shop may have ended up spending or investing far more into the bullion when they initially made the loan than it turned out to be worth when they went to resell it.
With that in mind, you may get roughly 50% of bullion’s value when you pawn it, but remember, when you pawn something you aren’t selling it. It’s still yours.
If you go to sell bullion outright to a pawn shop, you can expect to receive between 60-85% of it’s value depending on how much of it you have and what metal it is. Where as silver is less valuable than gold, there will be a smaller amount of profit in it inherently and therefore you may get a low percentage of the metal’s spot price. But with gold, being more valuable, you will likely get a higher percentage of it’s spot price, especially if there is a significant amount of it present.