Here’s a question that I will often get asked by people that don’t really understand pawn shops or have never had to use one.
The question is simple: Why do people go to pawn shops to begin with?
Well, the truth of the matter is there there are two main reasons that people go to pawn shops.
The first reason is that they’ve been hit with some kind of unexpected bill or emergency expense and need a few extra bucks to get them through a rough period.
This is the majority of cases because unlike other lending institutions, pawn shops offer fast access to emergency cash when you really need it the most.
Banks won’t make you loans for the small amounts that pawn shops will typically lend, and pay day loans have gotten a bit of a bad rap in recent times.
The second reason that people use pawn shops is to buy something they need at far below wholesale pricing.
For instance, let’s say you are on a job site and your drill blew up. You need one RIGHT NOW, but don’t want to spend $300. Well, a pawn shop will normally be able to sell you one for around $100 or even less sometimes.
This is even more true when it comes to higher end items like jewelry.
Everyone knows that jewelry stores are expensive, but pawn shops can save you a ton of money if you use them right and buy a high quality item for pennies on the dollar. Typically speaking, buying engagement rings at pawn shops is a great idea!
Why Else Do People Use Pawn Shops
Above and beyond those two basic reasons, the other reason that someone might use a pawn shop is for some of the other services that many pawn shops will offer.
This can mean things like check cashing. If you are unfamiliar with this service, it’s where a person can take a check that has been made out to them and cash it in the event that they don’t have a bank account.
This is typically a service that fits in very well with all of the other services that pawn shops offer and as such, will be something that a lot of pawn shops will provide to their customers should they need it.
In addition to check cashing, there are also services such as bill payment. Not everyone has a checking account, so it can be difficult to write out a check for your monthly bills. But here again, pawn shops may offer this service that people can take advantage of and use cash to pay their monthly bills on time.
Then you have other services such as money orders and Western Union transactions that will often be offered to customers just to expand the usefulness of the pawn shop to all of their customers.
In this way, some pawn shops begin to act like a complete one stop shop for financial services of all types. This is particularly useful to individuals that don’t have checking or savings accounts. They can use these services to take care of situations that might otherwise be challenging for them to handle.