Are Pawn Shops Safe?

When you think of a pawn shop, what comes to mind? Do you envision the stereotypical image of a dark, sketchy shop in a bad part of town? Are pawnbrokers people who are out to take advantage of you, or worse, outright steal from you?

While the media might portray pawn shops as unsafe, this image couldn’t be further from the truth. Most pawn shops are clean, secure, and honest businesses that provide valuable goods and services to their local community. Their businesses are built upon trust and a strong reputation, so why would they jeopardize that by conducting shady business?

Let’s dispel some of the myths about the safety of dealing with pawn shops.

Myth 1 – Pawnbrokers try to keep your items

Pawnbrokers will give you cash the same day when you pawn an item. The amount is based on a fair assessment of your item’s value. As a customer, you have two choices. Firstly, pay back the short-term pawn loan, including any additional charges or fees. Secondly, decide not to repay the pawn and forfeit your item.

Pawnbrokers want customers to do what is best for them. Legitimate pawnbrokers would never cheat customers of items to keep them for resale. That’s why pawnbrokers carefully discuss the terms of the pawn with a customer before any money or items change hands. Ultimately, the choice is on the customer to decide whether they want their item back.

Myth 2 – Pawn shops are a last resort

Many people believe pawn shops are shady, last-resort options for people with bad credit or other financial issues. However, pawn shops cater to a wide variety of customers, including DIYers, wholesalers, bargain hunters, homeowners, small business owners, and even environmentalists!

Pawn shops are also a great alternative to online marketplaces. Buying or selling items online can be time-consuming, confusing, and scary. There’s always a potential of getting scammed, and it often isn’t easy to verify the legitimacy of an item without seeing it in person.

By comparison, pawn shops are a safe alternative, providing a quick and convenient way for people to sell items they no longer want or need. And because they always carry a huge assortment of gently used goods at bargain prices, buying items at a pawn shop can save shoppers valuable money and time.

Myth 3 – Pawn shops have poor quality and out-of-date items

Many people believe pawn shops are dumping grounds for old, dusty, broken merchandise nobody wants.

Pawnbrokers always look for top-quality goods they can sell for a small profit. The better the quality, the more likely an item is to sell! Pawn shops buy, sell, and pawn name-brand electronics, collectibles, sporting goods, power tools, shoes, jewelry, and more.

Some shops, like Gene’s Jewelry & Pawn, even deal in luxury goods, including handbags and accessories from top-name designers. Shoppers with champagne tastes on limited budgets can find astounding deals on designer purses and bags, jewelry, sunglasses, shoes, and more, all at your local pawn shop.

Myth 4 – Pawnbrokers charge high interest rates

Many people expect pawn shops to charge high interest rates on their pawn loans. This is one of the biggest myths about pawning.

Pawn shops are highly regulated and must be licensed at the state and local levels. Interest rates and terms can vary between shops, but most pawn shops charge an average of 20% to 25% interest per month plus fees. That’s similar to the annual interest rate credit cards charge per year. Pawn shops in South Carolina have a sliding interest scale. The more that is borrowed, the lower the rate. Rates can go as low as 5% a month.

According to the National Pawnbrokers Association (NPA), pawn brokers across the country must comply with 14 federal statutes and regulations, in addition to any other state or local laws that set terms and conditions for pawn transactions. Pawnbrokers are also required to disclose the terms of the pawn, including any interest, store charges, or fees, upfront to the customer before any money or items are exchanged. These terms are also included on the pawn ticket each consumer receives upon completing their transaction.

Myth 5 – Pawn shops buy and sell stolen items

As mentioned above, pawn shops are heavily regulated businesses held to extremely high standards regarding the validity of all merchandise they handle.

Simply put, it’s bad business for pawn shops to deal in stolen goods. To deter potential stolen goods, pawnbrokers verify customer information and ask questions—even check for serial numbers—to ensure property is not stolen before completing any transaction. Pawn brokers are required to record specific details of every transaction, including the true ownership of the item.

Many states require pawn shops to report all pawned items to their local law enforcement so they can check against reports of any items reported as stolen. That’s why there’s often a holding period on purchased items, so authorities have time to track and identify items that may have been stolen.

In many states, pawning property that has been stolen can be charged as a felony crime. Pawnbrokers could face significant jail time and fines if convicted of knowingly selling stolen property.

Pawn shops have earned a bad reputation thanks to Hollywood and TV shows. However, we hope we’ve helped dispel some of these common myths!

Visit one of our local Gene’s Jewelry & Pawn locations today! Our reputation speaks for itself and is supported by our growing customer base. One of our trusted pawnbrokers will gladly help you!

Gene’s Jewelry & Pawn is ready to help if you want to pawn or sell your valuable items! For more than 30 years, we have provided our customers with the high level of service they deserve. Visit one of our locations in North Charleston, Moncks Corner, or Goose Creek, SC, today and see how we can help you. Get a free estimate for your items from the convenience of your couch!