A Pawn shop is a store where people bring in items of value and then a pawnbroker gives them money for it. The item is kept by the pawnshop until the person who pledged it has a chance to pay back the amount of money they borrowed plus interest. If the item is not paid back in the specified time period, then it is put up for sale.
To determine whether an individual is likely to return to reclaim their property, the pawnshop owner takes many factors into consideration. For example, the shop may compare the item’s serial number against a list of stolen merchandise to determine whether it is likely to be returned to its rightful owner. In addition, some jurisdictions require pawnshop owners to submit lists of items received each day, including the serial numbers of the merchandise, to police so they can compare them against a database of stolen goods.
Pawn Shop: A Complete Guide to Buying, Selling, and Pawning
In addition to lending money for interest based on the valuable items that customers bring in, pawnshops also make a significant portion of their revenue by selling brand-new retail merchandise. The stores also supplement their income by charging fees for auxiliary services such as check cashing, cell phone activation, Western Union money transfer services and bill payment services. In some cases, pawnshops also act as shipping centers for UPS and FedEx. Pawn shops usually charge significantly higher rates for these auxiliary services than their competitors, in order to offset the risk of loan defaults.