Pawn shops have a unique role in our modern society. Some people go there to access a fast, short term loan when they need cash in an emergency. Others go to pawn shops looking for high end merchandise at rock bottom prices.
Whatever reasons you might have for visiting your local pawn shop there are some things you should and should not do while there.
It’s obvious to be clean, well dressed and represent yourself properly. It’s obvious to not yell at a pawn broker while they are making you a loan.
That having been said, it’s pretty easy to work with most pawn shops. More often than not they are happy to see you and will help you with whatever you need to get done that day – whether it is a short term loan to help you through a rough period of time or finding a great deal on a new or gently used item.
But there is one mistake that virtually every pawn shop customer makes they should could easily avoid…
The Mistake: Trying To Over Negotiate
You absolutely would not believe the number of people that walk into a pawn shop thinking that they will simply be able to negotiate anything they want and at the price they want.
Part of this is due to the amount of negotiation shown on TV programs, but part of it is also due to the reputation of a pawn shop as someplace t go to ‘work out a deal.’
There are a couple easy pitfalls to avoid…
Price Of Gold
Before making a loan or buying gold, I suggest that everyone familiarize themselves with how the gold market works. That way you will know if what you are getting is really a deal or not.
But whatever you do, don’t walk into the pawn shop and try to throw your knowledge in their face. You will likely have it thrown right back at you as you are asked to leave the store.
Pawn shops have a certain dollar amount that they are comfortable buying gold at, and a different price that they are comfortable selling gold at. These two things are based off the current gold market – something a is out of their control.
If you come in and try to sell something for the price of melt or over – the pawn shop may not even give you an offer on it at all! The reason is that they would assume you aren’t working within a reasonable price range and don’t want to insult you with what they are willing to pay for the item.
If you come in and try to buy something and give them a ridiculous offer for it, you will likely meet the same problem where the pawnbroker won’t take you seriously as a customer and then any offer you make from there on out will be rejected without consideration.
Tools & Other Hard Goods
Remember, pawn shops are in the business of buying and selling. They follow a golden rule which is that they have to pay less for something than they think they could sell it for in the future.
If you come into to sell something, realize that the pawn broker may be able to move a little higher than his initial offer – but in all likelihood it won’t be much higher.
They deal with the kind of items you are bringing in every day. They know exactly what it is and there is very little chance that you will be able to get them to move considerably on their price.
If you try to impress them with the features or condition of your item, you will likely just end up annoying them which may cause them to become much firmer on their price.
If you are buying something and offer them a very low price, you run into a similar problem as you would with the gold. Keep you offer reasonable or risk destroying all negotiations on the price all together.
The Nerd’s Experience
I’ve dealt with a lot of people, and of those that try to negotiate on prices, 1 out of every 5 of them tries to over-negotiate.
For instance, just a few weeks ago we had a gold necklace hanging in the window. It was priced at $1150 and if we had to melt it that day, we would have gotten $1025 out of it.
A customer walked in, saw the necklace, tried it on and went through all of the paces. After 4 or 5 minutes playing with the necklace he offered us $650 for it.
Let’s look at that – the price was $1150 – he offered a little over half of the asking price and go nothing as a result of his over negotiation.
If however, he knew what the gold market was at that day he could have offered $1035 and I would have sold him the necklace. In doing so he would have saved himself over $100 of the asking price and bought his necklace at the price of scrap metal.
Furthermore, the necklace he would have bought for $1035 would probably cost over $3,000 in your average jewelry store. He would have gotten an unbelievable deal! We would have sold it for slightly above it’s scrape value, so we would have been happy as well.
But because of his attempted over-negotiation, he left without a necklace and we ended up melting it as scrap shortly there after.
So don’t attempt to over negotiate. This isn’t a movie, it’s not a TV set… you are taking about dealing with physical items that have set values and real people that only have ‘so much’ flexibility in how much they can move on prices.
So With That Having Been Said…
I suppose it’s time to draw this post to a close. If you have any questions or comments leave them in the comment field below and I’ll be happy to get back in touch with you shortly.
Thanks so much,
The Head Nerd