Pawnshops and pawnbroking have been around for thousands of years. It is known as
mankind’s oldest financial institution. Pawnbroking can be traced back at least
3,000 years to ancient China, and has been found in the earliest written histories
of Greek and Roman civilizations. The basic idea behind any pawnshop is to loan
people money on anything of value. A typical transaction:
- You bring in something you own and give it to the pawnbroker as collateral for a
loan (this act is called pawning).
- The pawnbroker loans you money against that collateral.
- When you repay the loan plus the interest, you get your collateral back.
- If you don't repay the loan, the pawnbroker keeps the collateral.
How much will I get? That completely depends
on the item, age and condition. The pawn broker will need to loan you an amount
that will be a safe percentage below the estimated resale value. In the event that
you do not repay the loan, the pawn broker must now sell the item to recoup his
money.
How long is the loan? The loan can be for
30 days or as long as you make your monthly payment. You can keep an item in pawn
forever as long as you make your monthly payment.
How much do they charge? It depends on the
dollar amount of the loan and the state the pawnbroker is conducting business. Typically,
a $1,000 loan would be about 15% to 20% per month. This is less than some credit
cards with their associated cash advance fees.
Are most items stolen that are for sale in a pawn shop?
NO. This industry is a profession that is run by professionals and is a highly
regulated industry required by law to report every item that they lend on, or purchase
from anyone. Plus, the individual that obtained the loans or sold the item must
completely identify themselves with a government approved form of ID. The pawn brokers
are required to report each item to the local authorities and to have serial numbers
(where applicable) checked against any items reported stolen. Because Pawnbrokers
are identified as financial institutions by FINCEN, they are also required to run
every name of every consumer lending or selling products in their stores against
the SDN, suspected terrorist list daily as maintained by the U.S. Government. Furthermore,
the pawn broker must hold each item for 30 to 60 days (depending on what state they
are in) just to make sure that the item does not get reported stolen at a later
date. Once the item has been held for the proper amount of time or the consumer
did not redeem their loan, then the broker can then put the item out for sale. The
pawnbroker goes through great lengths and expenses to protect the community from
providing an easy outlet for stolen merchandise. As a matter of fact, only about
1/10th of 1% of all merchandise brought into a pawn shop is defined with a property
disposition issue. Career criminals tend to lean towards jewelry stores, antique
dealers, flea markets, garage sales, classified ads and EBAY to fence stolen property.
All of which are widely unregulated and have become commonplace for mass disposal
of goods and property with NO recourse.
What can I do to protect myself against theft?
The main problem most consumers have is if they are burglarized, most of the population
does not know the serial number to their DVD player, TV, Stereo, etc. So, the best
way to increase your chances of recovering your items is to do a complete inventory
of all of your belongings with the Make, Model and Serial Number of each. You can
download a quick and easy form here for your convenience. The other simple step
is to REPORT each item that is stolen. Most people assume they will never retrieve
it anyway and just don’t report it stolen. If you don’t report the item stolen,
the processes in place have no chance of working without the first step being taken
– Report It! You may also do a free download and search of your stolen items for
free on: http://www.mystolengoods.com/