Buying Items From A Pawn Shop? Follow These 2 Tips

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Buying Items From A Pawn Shop? Follow These 2 Tips

24 July 2020
 Categories: Business, Blog

A pawn shop is a great way to get good deals on used items. However, the shopping environment is quite different from anything that is out there. Here are some tips for using a pawnshop when buying an item.

Understand How Pawn Shop Work

It helps to know how a pawn shop makes money before you go in and start haggling for an item. A person will sell an item to a pawn shop when they need a short term loan by giving up an item that they own in exchange for cash. The pawn shop holds onto that item for a specific amount of time, while the person taking the loan has the ability to return the loan and pay a small premium to get their item back. If the person doesn't return by the specified date, the pawn shop can sell the item for cash. 

The loan that the shop gives for an item must be worth less than what an item can sell for. The pawned value of the item is also based on how likely an item is to sell. It is very possible that a pawn shop will not accept an item for a loan if they feel like it will not sell.

Look At The New And Used Price Of Items

Before you make an offer on an item at a pawn shop, you'll want to look at how much the item is selling for new and used. Many online auction sites will list items for sale based on what the seller is asking for or have current bids of what people are willing to pay. This will give you an idea of what is a fair starting price for a used item in a pawn shop. If something is listed much higher than the price online in a pawn shop, you know it's listed too high.

It is common for a shop to purchase an item for about half of what the item is worth on the used market. This will give you an idea of how low a pawn shop could go on an item.

Know That Pawn Shops WIll Negotiate

Every day that a pawn shop doesn't sell an item is another day it is taking up space on their shelves. Space is limited in a store, and if things are not selling then a pawn shop will be willing to negotiate a lower price to get the item out of their store. Use this to your advantage to negotiate prices, knowing that the shop may not budge on a new item, but be more willing to sell an old item that nobody else has shown interest in.