Pawning Something? Read This First!
Forget dingy dark holes, pawn shops are hot thanks to History Channel's Pawn Stars, now in its fifth season.
These guys are experts but even they get it wrong:
If the experts get it wrong, how can you ensure you're getting the true worth for your item? Todd Hills, the co-founder, president and CEO of Pawngo, offered some tips if you're thinking about pawning some items, say, if you're in Vegas or along Dundas street in Toronto.
Research, Research, Research
Just because you think that watch is worth something doesn't mean you'll get the cash. Some items retain value like precious metals and some items don't, like electronics or cars.
This also includes researching interest rates and other laws that guide pawn shops. For example, the province of Ontario has the Pawn Brokers Act. The act says, "rates of interest authorized by law to be taken by pawnbrokers for sums lent" which means pawn brokers cannot set their own interest rate.
Market Value vs. Retail Value
Hills describes market value and retail value as the following, "Market value refers to how much your item is presently worth given its condition. Retail value is how much the item was worth when it was brand new."
A good pawn broker will lend you money close to the market value. That's why you need to research your item so you can have an understanding of its worth.
Read the Fine Print
You and the pawn broker are entering a contract and like all contracts, you have to read the fine print before you sign. Check for additional fees or penalties and ensure you understand what will happen if you're unable to pay back the money in time.
Finally, Hills suggests getting your item cleaned before you take it to the pawn shop. A clean item shows better and who knows, you might get more money.