Hmm…What’s the difference?
Rick Harrison, from the popular show Pawn Stars, always asks his customers, “So, what do you want to do? Sell it or pawn it?”
Great question! This is probably the most asked question in a pawn shop.
A pawn is like a loan. You bring your item to the pawn shop and get cash, but only for a short period of time. In a month or so, you come back to the pawn shop and buy it back for the original amount plus a fee. If, in the meantime, something comes up and you are unable to buy your asset back, then the pawn shop keeps your item and that’s the end of it. Or maybe you decide that you just don’t want it back. No problem. You are under no obligation to pay anything. You just forfeit your ownership of the item and the pawn broker will not hound you about it.
If you want to sell your item, just tell the pawn broker and he will make you an offer to buy it from you. It all hinges on YOUR preference as to whether you want the opportunity to get the item back. If you are unsure, the pawn broker would prefer to buy it from you. That way he can turn around and immediately resell it in his retail shop and make a profit on the transaction. That is a better deal for the pawn broker than making you a pawn loan on something that you probably won’t be coming back for. The law states the pawn broker must hold that item for the entire loan period and then a grace period before he can declare the pawn loan a forfeiture. Then he must wait another holding period before he can put it out for resale. Meanwhile, he has his money tied up and he can’t even begin to list it for sale.
When you walk into any pawn shop, the pawn broker is qualifying you, not your item. He’s trying to figure out, “How much emotional attachment do you have to your item?”
This is important because it helps him determine if you are going to come back to redeem your item or not. Pawn shops make money by investing in pawn loans and collecting pawn fees. If the customer forfeits the item, he still has his money tied up but won’t generate any profit until he can sell it and get a profit back his investment. If the pawn broker doesn’t think you are coming back for your item, he really doesn’t want to make a loan to you so he will make you a low offer.
If you even ask the question, “Which option will get me more money? Pawn it or sell it?”, you are telling the pawn broker you are indifferent about owning the item and probably won’t be redeeming it. In that case, don’t expect a great loan deal. You’ll likely be better off selling.
So what do you want to do? Sell it or pawn it?
Unless you received one of these lovely Louis Vuitton pieces from their Summer EPI leather collection as a special gift from a loved one and you would cry if you let them go, just sell them. Chances are good that in the future, there will be new designs and new styles that you would like even better than these.
That Rolex or other fine timepiece you own is a perfect candidate for a pawn loan. They never go out of style and you can use it as collateral for a pawn loan over and over. And don’t forget, you only have to borrow as much as you need. If you only need $500, only take that much. You can always come back and increase the amount.
Almost all types of consumer electronic devices should just be sold. Computers, cell phones, iPods, tablets, DVD players, etc. all become obsolete very quickly. The technology for these items changes so quickly that by the time you are getting your device back from the pawn shop; there are probably new models out. You’ll either want to buy the updated one or buy the obsolete model for less than it would cost to get yours back.
If you have questions about whether to pawn it or sell it, post in the comments below. We’ll see what our readers think.
Post by Don Battis