FAQ's concerning Pawn Shops 



Why would someone go to a Pawn Shop to get a loan?

Pawnshops offer the consumer a quick, convenient and confidential way to borrow money. A short-term cash need can be met with no credit check or legal consequences if the loan defaults. A customer receives a percentage of the value the broker believes the collateral would bring in a sale. Although the loan to collateral ratio varies over time and across Pawn Shops, a loan value of about 50 percent of the resale value of the collateral is typical.  When a customer pawns an item, the loan terms will print on a pawn ticket for the customer. The Pawn ticket states the customer's name, address, type of identification provided to the pawnbroker, a description of the item, amount lent, maturity date, interest rate, and the amount paid to redeem the pawned item.


What is the foreclosure procedure?

 
If a customer defaults, the collateral becomes the Pawn Shop's property after the loan is overdue by a specific amount of time, that time is stated on the Pawn ticket.  


Do most pawning customers lose their merchandise?

On average, 80 percent of all loans get redeemed. Repeat customers make up most of our business, similar to any other lending or retail establishment. Pawn Brokers know the vast majority of their customers because they often borrow against the same items repeatedly. Pawnbrokers offer non-recourse loans, looking only to the item being pledged to recover their investment if the borrower chooses not to repay the loan. It is solely the choice of the customer whether he/she elects to repay the loan.


How can I be sure the merchandise I purchase at a Pawn Shop isn't stolen?

Less than one half of one percent of all loans made come up as stolen goods. Thieves and robbers are a Pawn Shop's worst enemy. Pawnbrokers work closely with local law enforcement to catch and prosecute these perpetrators. A customer must provide identification to show evidence of the transaction. This information is then presented to the police department, decreasing the likelihood that a thief would bring stolen merchandise to a Pawn Shop. Pawnbrokers are trained to look for signs of stolen property to avoid these costly mistakes. It is not in the pawnbroker's interests to accept potentially stolen merchandise because the police can seize the merchandise and the pawnshop owner loses the collateral and the loaned money.

 

What are some advantages of using a Pawn Shop over an Online Marketplace?

Whatever reason you have for selling your items, there are several options where to list items for sale. These include Pawn Shops and online marketplaces such as Craigslist, Facebook Marketplace, or eBay to name a few.

Below are some advantages Pawn Shops offer that online marketplaces cannot.

You have the option to pawn instead of sell.

One significant advantage of Pawn Shops is that you don’t have to sell an item to get the cash you need; you have the option to pawn it. Pawn Shops specialize in offering short-term collateral loans. Once you have redeemed your loan, you can collect the item you pawned as security.

Collateral Loans are a great solution that no online marketplace can offer.

 

Before you buy from an Online Marketplace.

Photographs or item descriptions can be misleading, even if the seller intends not to mislead anyone. There is no substitute for looking at a product you want to buy in person.

When you buy at a Pawn Shop, you can avoid the disappointment many online buyer experiences when they receive what they purchased online.

Safe from questionable products.

With Pawn Shops, you don’t run the risk of overpaying for fake or stolen goods. All items are carefully vetted and have cleared a Police Report so that you can shop with confidence. 

Pawn Shops require a valid ID for all intake transactions. Every product’s serial number, along with a detailed description, is forwarded to the local Police.

It’s the last place a thief wants to bring their stolen property; that said, you’re much more likely to find suspicious products on an online marketplace than you would in a Pawn Shop.​

A safe place from scams.

Pawn Shops are one of the most regulated industries in Canada. Unlike online marketplaces such as; Facebook, eBay, Craigslist or Kijiji. 

These platforms are great for selling to a broad audience, but unfortunately, they embody many scammers, so buyer beware.

No charge evaluations.

Established Pawn Shops such as Nuway Deals have years of experience dealing with a wide variety of products. Pawn Shops will do the necessary research to determine a reasonable value for an item.

Layaway program.

Our layaway program allows you to pay the item off over 90 days.

Note: You can secure the item you want at Nuway Deals with a 25% down payment, followed by three monthly payments. No proof of income or credit check is required. In addition, we don’t charge any fees or interest.

In-person.

It’s easier to negotiate with a friendly knowlagable employee at a Pawn Shop than with a total stranger using an online marketplace. By talking to someone face-to-face, you’re likely to have a more enjoyable experience.

Without marketing experience.

With sites like Craigslist, Facebook Marketplace, or eBay, it takes time to create a good listing. You have to write a compelling headline and description, also add high-quality images. Without marketing experience, this can be challenging.

Once you’ve listed your product, the waiting starts. There is no guarantee your product will sell or that you’ll receive bids once you list it.

Pawn Shops are entirely different. Whether you want to sell something or Pawn it, you can get the cash you need on the same day you take it to a Pawn Shop. 

What is the difference between buying at a Pawn Shop and buying at a retail store?

 
Mainly price. Pawn Shops can offer you significant savings over retail. Sometimes ranging from 1/2 or 1/5 off of retail prices.


Why is the image of Pawn Broking changing since the 1930s?

 
Today's Pawn Broker is upgrading everything from the interior and exterior of his or her shop location, employee presentation, customer service, signage, marketing and the merchandising approach. Pawnbrokers focus on providing exceptional customer service and are very active in the community, both politically and in local charities. Pawn Shops today range from a single or multi-store operation to publicly held company chains. The atmosphere at a Pawn Shop is nothing like what you saw in Rod Steiger's depiction in The Pawn Broker -- visit us to see for yourself.


Are Pawn Shops a “bad times” industry?

Pawn Shops survive bad times if they make adjustments both at the retail and loan counters, but they do far better in good times. In hard times, customers move away to finds employment, have less ability to repay their loans, and the value of all merchandise goes down. Merchandise values go down because the major-brand retail discounters sell for less to maintain or broaden market share. If they retail for less, Pawn Brokers must loan less, thus earning a smaller return. Regardless of income level, most people periodically borrow money. When the economy is doing well, customers are more able to repay their loans. Forfeited merchandise sells at a higher rate because customers have a more discretionary income.

Do Pawn Shops attract indigents and derelicts?

Definitely not. Indigents and derelicts typically have no assets to use as collateral. No one builds a business around these people. The typical Pawn Shop loan customer is employed, living within one mile of the store,  and occasionally needs short-term cash for a bill such as a medical expense or car repair, or to buy food. The typical retail customer is a bargain hunter, either by need or desire and comes from all walks of life. Most pawnshop customers are repeat customers.


Do Pawn Shops down-grade the neighbourhood and hurt property value?

Neighbourhood property values are based, in part, on the appearance and care given to the properties. There is no factual basis to support a claim that an eye-pleasing Pawn Shop negatively impacts values. On the contrary, if they attract customers, they enhance other merchants and the community's opportunities.

Are Pawn Shop rates excessive?

To provide the service, all lenders must charge rates commensurate with risk, size and duration of the loan, collateral offered, and recourse. Pawn Shop loans are small-dollar, high risk, short duration loans. The item stands as the sole collateral, offering no other recourse. And Pawn Brokers are liable for replacement value if something happens to the item in their care. There are no hidden charges as with other lending institutions. On the other hand, the Pawn Brokers cost basis is far more significant. They incur a cost for security, handling, storage, and regulation not incurred by others. Due to the 15-20% of pawnshop customers that elect not to repay their loans, Pawn Brokers are forced to turn their "bad debt" into a retail center to recover their cost. Other lending institutions do not incur a retail cost, including additional floor space, gondolas, counters, personnel, advertising, shoplifters, competitive retail cost, and new merchandise cost to supplement the forfeited goods.


Should photographing or fingerprinting Pawn Shop customers be required?

Pawn Shop customers already provide full identification with each transaction, a copy of which goes to local law enforcement. Additionally, most Pawn Shops maintain surveillance cameras in their stores, the same system used by banks. To require anything more than needed by banks implies a relationship between how much money one has and their integrity. You have questioned the quality of their character based on financial status - a form of discrimination.



Should there be zoning restrictions other than general retail?

Pawn Shops are neighbourhood businesses providing vital services to the community. To restrict zoning to other than general retail should require a very compelling reason. The compelling reason should not be historical perception. There should be something wrong with the service provided, the business itself, or the customer served to restrict zoning. 

Something you should know.

   How can I be sure the merchandise I purchase at a Pawn Shop is not a stolen item?
Less than one-fifth of one percent of all collateral is even suspect as having been misappropriated in any manner. Thieves and robbers are a Pawn Broker's worst enemy. Pawn brokers work closely with local law enforcement to catch and prosecute these perpetrators.  A customer must provide identification to show evidence of the transaction. This information is then presented to the police department daily, decreasing the likelihood that a thief would bring stolen merchandise to a P
awn Shop.
Pawn Brokers are trained to look for signs of stolen property to avoid these costly mistakes. It is not in the Pawn Broker's interests to accept potentially stolen items because the police can seize the merchandise and the P
awn Shop owner loses the collateral and the loaned money. It's not just about the money. It's following the accepted principles of right and wrong that govern the conduct of this profession.