Pawnshops are businesses or individuals offering secured loans to the people and they use the items of personal property as collateral. The objects they pawned are known as pawns or pledges with only relatively valuable things accepted as one. Examples for these include power tools, cameras, televisions, video game systems, computers, home audio equipment, musical instrument and jewelry.
If you pawn your item for a loan there, the pawner could redeem it within a specific period of time that was contracted with them by paying the loaned amount plus interest. These amounts are governed by law or by the policies set by pawnbrokers like pawn shops Houston has. If you have failed to pay the required amount or have the period extended, they will sell the object to other customers.
Pawnbrokers do not report the defaulted loan to the credit report of customers since they already posses physically the collateral. This is not the same with other lenders who would be reporting the customer when they defaulted since pawnshops can easily sell the items. There are even those who are willing to trade objects brought by their customers to another one they have.
Pawning process begins when the customer brings something to the pawnshop to have them pawned or sometimes sold outright. These things include tools, musical instruments, collectibles, electronics, jewelry and firearms depending on regulations there locally. Even jewelries containing genuine gemstones but have some missing or broken pieces is still considered valuable.
They assume the risk of the possibility that the item was stolen though lawns in most regions protect them from handling stolen goods unknowingly. Although they are required to provide photo identification of the seller like drivers license or identity document issued by the government. This includes holding period of the purchased object allowing authorities to track them.
Some places required these shops to give them a list of newly pawned things with any serial number associated with it to the police. This helps the authorities to determine if any of them were reported stolen. This is why most officers advise robbery and burglary victims to visit pawnshops within the area and see if they can locate the stolen goods.
A pawnbroker assesses an item to determine its marketability and condition by testing it and having the flaws examined. They will also consider the supply and demand in that region or community to determine its marketability. Hard to sell items are sometimes offered by customers with the owner either refusing them or offering a very low price.
Some objects like hand saws and hammers do not get outdated but this does not remain true with electronics and computer ones which becomes quickly unsaleable. They use guidebooks, internet search engines, catalogs and their experience when assessing their value. Others are trained with identification of gems or employ specialist to do so including checking its authenticity.
Determining the amount is done by considering several key factors like its predicted resale value. The lowest point for this is its wholesale value to let them sell it used good merchants when customers are not buying them. Meanwhile, the highest point is its retail sale price.