The pawnshop business is not what most people think. In fact, it’s probably just the opposite.
What many people don’t know about the pawnshop business is a lot. Pawnshops tend to have an unfair reputation for dealing with criminals, selling stolen property, and having shady lending practices. While this might be true for some shops, the vast majority are far different than that outdated reputation might lead people to believe.
Most pawn businesses are clean, safe, and chock-full of interesting items, hard to find trinkets, and one-of-a-kind valuables you can’t get anywhere else. What else don’t you know about pawn? Let’s take a look at five things most people don’t know about the pawnshop business:
#1: They’re Not Just for Loans
Pawnshops are known for their loan programs, but they’re more than just lenders. Pawnshops are retail stores that carry everything from gold to guns, coins to comic books, and baseball cards to bayonets. If you’re shopping for a unique item or a hard to find collectible, a pawnshop is a great place to start.
#2: They’re Big Business
The pawn industry brings in billions of dollars in revenue annually. In 2020, there are 6,973 pawn shops operating in the USA. As of 2018, the worldwide industry had over $14 billion in revenue. They offer collateral-based loans, and not just to people who need cash fast, but to anyone who wants to bypass the bank and have cash in hand the same day.
#3: Pawn Loans Save Lives
This might sound dramatic, but it’s not far from the truth in some situations. People with bad credit or limited resources who find themselves in a financial crisis and need help with necessities such as medical bills or healthcare emergencies, housing, utilities, or transportation needs, can get relief through a pawn loan.
People whose financial situation puts them outside the mainstream, who don’t, won’t, or can’t use traditional banks, and who need a loan can use a pawnbroker. This doesn’t mean they’re dropping off their family heirlooms never to return again, though that does happen. Many borrowers, nearly 85%, pay off their pawn debt, take back their collateral, and move on with their lives, which were made a little easier with access to those types of easy to get loans.
#4: Pawn Shops Are Not Scary
If you’ve ever been too fearful to enter a pawnshop, it’s time to get over the fear and give it a try. You will be pleasantly surprised. In the past, maybe 30 years ago, you might have had valid concerns about seedy behavior and questionable characters. But the pawn industry today is an entirely different animal. It’s a revamped industry with a dramatically improved reputation.
For the most part, you’ll find clean stores, nicely displayed merchandise, and friendly staff. For the majority of pawn business owners, customer service is a priority, and welcoming any and all shoppers or loan seekers is critical to the success and growth of each and every pawn location.
#5: Loans Are Quick and Easy to Get
You don’t have to deal with a squinty-eyed mobster to get a loan fast. Pawnbrokers want to loan you the money you need. The key is having collateral that has some value, as pawn loans are collateral-based. Take in your item, have it evaluated, and if the pawnbroker believes it to have some value to them, they will hold the item and loan you the money, usually in cash the same day.
The loan is generally a percentage of the item’s worth. You are required to pay back the loan in a specific amount of time in order to get your collateral back. Another option is to sell the item to the pawnshop outright. Either way, you walk away with the cash you need, when you need it.
With so many misconceptions about pawn shops, it’s easy to see why many people might not be familiar with them. If you haven’t been to a pawnshop lately, it’s time to see what you’re missing.
If you own a pawn business and you’re suffering from the outdated stigma attached to the industry, we can help. Contact the team at Pawnshop Consulting Group to help take your business up a notch and break out of the mold of old-fashioned pawn broker mentality.