Fun Fact: Over 30 million people in the United States (10% of total population) complete a pawn transaction each year. This number continues to rise as more people are taking advantage of collateral loans for opportunity rather than need.
This is going to sound cynical – I do not mean it to, but I have no better way of explaining than through the words of a co-worker.
It is impossible for a pawnbroker to rip you off. You have the control! We cannot force anyone to sell us items or force anyone to agree to a loan value – we make offers and you get to decide if it is worth it to you or not.
Let’s look at an example (yes, I know my example is extreme but it gets the point across).
Jane Doe has a Louis Vuitton purse that she is interested in selling. It is a $700 purse that she got as a gift from her ex and she only used it for one evening. She only wants $200 for this purse that is probably worth $500 in its “like new” condition. Seems fair.
WRONG! Because it was a gift, Jane Doe does not have a receipt or paperwork of authenticity. Most pawnbrokers are not handbag experts so we have to assume it’s a fake. Fake or not, it is still a nice purse that we can probably sell for $200.
WRONG AGAIN! We live in the I.E. not Orange County. We do not have many community members looking to spend $200 on a purse that may or may not be real Louis Vuitton. The $700 purse will likely be stickered with a $75 price tag so we should offer Jane Doe $35 for her purse.
WRONG YET AGAIN! Because we are a pawnshop, everyone likes to negotiate pricing (which we are happy to facilitate). This $700 purse will likely be sold for $60 out the door, which means we also eat the sales tax. We also have to store it for 30 days before selling (if you recall from the DAY 3 post) and pay an employee to post and sell the item.
To the pawnbroker, this purse is worth purchasing for $15-$20 so we can make $15-$20 profit from the sale. Jane Doe thinks we have gone mad when she hears the offer of $15 and we are the bad guys.
Long story short, there are a lot of factors to consider when selling an item or putting an item up for loan. The item’s “market value” may be significantly decreased based on a number of factors that pawnbrokers are trained to recognize.
Full Transparency – Does it behoove us to buy an item or process a loan at a significantly reduced price? Will we try to get it cheap? Absolutely! To be frank, that is just good business. All businessmen/women know that margin is key – We are no different.
You hold the cards. Be open-minded to factors other than “market value”. Remember, you can walk away from any offer – it’s not personal, it’s just an offer. Keep these in mind, and you will never leave a pawnshop upset.
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