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Pawnshops: Buying and selling done right

A pawnshop can be a great place to make a little money or buy something at a super price. But if you aren’t careful, you could wind up making a terrible deal. We share some tips and tricks on how you can make the most of your pawnshop experience.

Pawn shop

Understanding the business

Money Management International explains pawnshops as places where people can leave an item as a form of collateral to secure a loan. The item remains with the pawnbroker for an agreed-upon time limit and interest rate. If the seller is unable to repay the loan within the established time frame, the pawnbroker takes ownership of the item and can resell it. Pawnbrokers also spend a good amount of time buying and selling items outright.

For sellers

Virtually every place of business has at least a few reviews online. Rather than stopping into the first place bearing the title “pawnshop,” do some research to determine which stores have good reputations. If you have a unique or rare item, it may be helpful to look for a store that specializes in that area.

Before you head into the store you have chosen, decide whether you want to pawn the item or sell it outright. If it is of great value to you and you feel you can repay the amount in a reasonable time frame, pawning may be the right option. If, however, you would prefer to simply cut the item loose and gain the money, then selling is the best choice.

Make sure you present the item in the best possible way. If it is a piece of jewellery, do your best to make it shine and, if possible, bring a jeweller’s professional appraisal of it with you. If it is an antique with a notable history that will increase its value, ensure you mention that right off the bat.

Keep in mind you don’t have to accept the shop’s first offer. If you feel it’s offering you less than the item is realistically worth, do not hesitate to negotiate or take your business elsewhere. It is important you feel comfortable with the arrangement, so if your gut tells you to hold off, it may be best to listen.

If you are pawning an item, think long and hard before you agree to the terms and conditions. Losing something that is important to you because you cannot pay on time is extremely upsetting. So think about your financial situation in a realistic manner before you sign anything away.

For buyers

If you are interested in buying from a pawnshop, being knowledgeable is your best asset. If you come across an item you want, do your research. See what it would cost brand new or used on online auction sites such as eBay. Make sure you have a full sense of the item’s worth before you even consider purchasing it.

Once you know the item is what you are looking for, get ready to negotiate. Like any store, every item in a pawnshop has a decided-upon price, but virtually all pawnbrokers are open to negotiating. If an item has been there for years and is quite large, for example, the pawnbroker may place more value on getting rid of it than getting the expected price, and he may be willing to give you a deal to do just that.

If the price is right, your next step is to ensure you fully understand the policies of the establishment. If you are buying something rare or under a certain brand name, ensure it is authentic before purchasing. Also ask whether the sale is final. Regretting your purchase is upsetting, so make sure you are 100 per cent confident before you hand over your money.

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