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. While most interactions with pawnbrokers are straightforward and helpful, there is one common mistake that customers often make, which can have significant repercussions. By understanding this mistake and avoiding it, you can ensure a smoother and more successful transaction.
The Mistake: Over-negotiating
One of the most prevalent misconceptions among pawn shop customers is the belief that they can negotiate any item’s price to their desired amount. This misconception is often fuelled by portrayals of negotiation on television shows and the perception of pawn shops as places to strike a deal. However, attempting to over-negotiate can lead to unfavorable outcomes and hinder successful transactions.
Easy pitfalls to avoid
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 operate within a certain price range based on the current gold market, which is beyond their control. Offering an item for sale at an inflated price or attempting to purchase it at an unreasonably low price may result in the pawnbroker refusing to engage in further negotiations. 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 and Hard Goods
Pawn shops operate on the principle of buying items for less than their anticipated selling price. When selling a tool to a pawn shop, it’s crucial to understand that the initial offer is unlikely to increase significantly. Pawnbrokers are experienced in assessing the value of tools they encounter daily, making it challenging to persuade them to deviate significantly from their price. Similarly, when buying a tool, offering an unreasonably low price may hinder negotiations or lead to an outright rejection.
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.
To ensure successful transactions at pawn shops, it is important to avoid the mistake of over-negotiating. Understanding the limitations and constraints pawnbrokers face when determining prices can lead to more favorable outcomes. By refraining from demanding unrealistic prices and offering reasonable offers, you can navigate the pawn shop experience effectively. Remember, this is not a movie or a TV set; it is a real-world transaction involving tangible items and real people. By approaching pawn shop transactions with this mindset, you can maximize your chances of securing a fair deal.