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To Sell or to Pawn: What’s the Best Option for You?

April 11, 2018

To Sell or to Pawn: What’s the Best Option for You?

There are many reasons why a person would find themselves with the need to frequent a local pawnshop. Perhaps its spring cleaning time and you found a hand full of trinkets that might be worth a few bucks. Possibly you have a garage full of items that are more clutter and eye sore than useful. Then again, maybe you have lost your job or have higher than expected utility bills, possibly you have experienced a vehicle breakdown or a busted water heater in your home and your access to disposable cash is limited. In cases like these, you are going to need money to fix the problem. This is where obtaining a short term low interest pawn loan or selling items outright to a pawnbroker is going to make the most sense, because you need as much cash as you can get and you need it immediately.

white gold earrings


Pawnshops in their most basic form have been around for thousands of years dating back as far as Ancient China, some 3,000 plus years ago and have generally been the best option for many people in need, from what is often called the blue collar or the working class. American pawnshops even have the historical distinction of having been more dependable than banks during times of economic crisis, such as during the great depression, when pawnshops had more solid currency than banks. Being able to pawn or sell jewelry in times like that was often the literal difference between life and death for many cash strapped families and is much the same today. 

According to Jordan Birnholtz, co-founder of PawnGuru, “[today] pawnshops have become a refuge of last resort for millions of low-income Americans systematically underserved by traditional, mainstream financial institutions. People deciding to use pawnshops, is an entirely rational choice exposing the fundamental failure of the U.S. banking system to meet the needs of many low income people.”

Pawnshops are plentiful in the United States with an approximate 9,650 shops currently in operation, 40 percent of which are privately owned small to medium businesses. These businesses are closely regulated and according to the National Pawnbrokers Association “pawnbrokers and pawn transactions are covered by 15 federal statutes and regulations, including the consumer protection and anti-money laundering laws that apply to other credit providers designated as financial institutions.”

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Top Dollar Items

Hands down the top dollar items which are pawned and bring the most value are precious metals such as gold, silver and platinum, as well as, precious stones such as diamonds, rubies and the like. Pawning these items often favors the customer especially with gold having nearly doubled its value since 2007 and the value of natural diamonds steadily increasing. For most people, these items generally come in the form of jewelry and therefore most pawnshops specialize in them, thus making a short term low interest pawn loan the first option for obtaining quick cash.

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Pawnshop Clientele 

Unfortunately, many people have a less than favorable view of pawnshops; mostly this is due to the fact that portrayals of pawnshops and pawnbrokers in pop culture movie plots and television programs have not always been particularly positive. The pawnshop is usually dirty, junked up and lit badly and the employees are pretty sketchy looking, and of course there is generally a crime that has been committed and somehow it seems to be loosely connected to the shop. And the customers are normally thieves, junkies and other socially reprehensible people. 

In truth the average clientele of most pawnshops has changed and according to an examination of pawnbrokers’ customer demographics conducted by the National Pawnbrokers Association it was determined that Millennials now account for a significant portion of pawnshop customers. The survey involved pawnbrokers from across the country and collected a wide range of information, including but not limited to the average national pawn loan amount ($150), cash for gold transaction data and the average ages of pawnshop customers. Most of the pawnbrokers who were surveyed set the average age for 40 percent of customers at between 27 to 35-year olds, with 33 to 40-year olds making up the second largest age group of customers.

According to an article on the official website of the National Pawnbrokers Association, “While the average pawn customer is 36 years old, we are seeing an increase in younger consumers turning to pawn stores around the country,” said Larry Nuckols, president of the National Pawnbrokers Association. “Although the economy has stabilized more recently, Millennials are still confronted with growing economic uncertainties and fewer opportunities than previous generations. They are attracted to pawn stores’ unique form of non-recourse, collateral lending.”

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While the traditional opinion of pawnshops has been low, the truth is a very different thing. Most pawnshops are very well lit and with the items for sale displayed and often separated by departments. Staff is generally experienced and professional and ready to assist first timers in how the process works. Since the establishment of the National Pawnbrokers Association in 1988, standards and practices have been created that makes doing business with pawnshops a much more safe and dependable option for acquiring short term low interest pawn loans. For instance, pawnshops are required to maintain clear and easy to understand points of agreement in their loan contracts to include a breakdown of the interest on the loan, renewal dates, and forfeiture policies. Of course a big plus is the free appraisal you get when presenting a piece of jewelry for sale or pawn. In most cases the appraisal is conducted by professionals who have viewed and apprised hundreds of pieces of jewelry and are often school trained in the industry. And of course, every item taken in by a pawnshop is registered to help prevent the sale and transfer of stolen property.

So, for whatever reason you may have to visit a pawnshop, once you are inside the business with your property, you can feel at ease with the proprietors. Then you will need to decide if you will take a short term low interest pawn loan, or sell your items outright. There are several factors that need to be taken into account when choosing between selling and pawning, with the first of those factors being the knowledge to know the difference between the two. 

Selling jewelry is pretty straight forward: you enter into an agreement with the pawnbroker to exchange your jewelry for a set amount of cash. How long this process takes is relative to the amount of business the pawnshop has and how quickly you and the pawnbroker can agree on the value of the item. Once the two of you have agreed on the terms of the sale, there may be a little paperwork that needs to be completed and you can then receive your cash and be on your way with no further interactions needed. 

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Pawning jewelry on the other hand is a little more involved and is often the option chosen by most hopeful customers. Obtaining a short term low interest pawn loan is pretty much the same as going to a bank for a traditional loan. However, unlike banks working with a pawnbroker provides the benefit that there is no credit check needed to obtain a loan, as you are backing the loan with tangible goods. Additionally, choosing to pawn an item as opposed to selling it can often increase the amount of money you receive, as pawnbrokers are more willing to loan larger sums as opposed to buying outright. This is in part because traditionally, around 80 percent of people who get a short term low interest pawn loan pay it back on time.

Because many people only frequent a pawnshop when, as mentioned before, a life impacting event arises and creates an immediate need for ready cash, they often are on the emotional side when they come in to obtain a short term low interest pawn loan. These customers are looking for a positive outcome, but generally do not want to lose grandma’s engagement ring to the open market. This is where emotions will generally come into play. Emotions will always shade the customers perception of the value of their item, not only are they upset about whatever brought them in, but then looking at dad’s gold retirement watch being judged by someone, can be hard. 

Almost without fail the customer will feel that their item is being undervalued by the pawnbroker. This is because of their personal connection to the item and maybe a bit too much reality television, but the truth is that it is to the pawnbroker’s advantage to price your jewelry with as high a value as possible. Since you will be paying the loan back with interest, the larger sum you receive for your items, the more profit is made by the pawnbroker. It is vital that you understand completely the payment agreement and that you make your payments in full and on time. Should you fail to do so, you forfeit ownership of the item to the pawnbroker, who can then legally put it out for sale. However, the knowledge that you will be able to get the money you need, yet still not lose ownership of your jewelry is a very reassuring thing and one of the best reasons to choose the pawn jewelry option over the sale jewelry option. 

Another convincing argument for getting a short term low interest pawn loan and maintaining ownership of your jewelry is that the item may become more valuable as the years go by. The, per carat, value of diamonds for instance has and continues to steadily climb and this positive trend is not expected to slow down within the foreseeable future. The climb is evidenced in the historic data that is regularly updated and maintained by the diamond market along with predictors of future worth. According to, a statistics portal that uses more than 20,000 sources to compute data, “In 1960, the average price for such a diamond stood at some $2,700 U.S. Since then, the diamond price has increased more than tenfold, to $30,925 U.S. in 2016.” Also according to, the world’s natural diamond reserves are steadily being depleted while at the same time demand for the precious stones continues to grow. Industry experts state that this will cause an ever widening gap in market supply and demand. It is estimated by experts that the natural diamond market will suffer a significant worldwide shortfall in supply of approximately 278 million carats of natural diamonds. As this occurs the price per carat will steadily increase for natural diamonds, making opting to pawn your diamond jewelry and maintain ownership an even better idea, since future replacement of the gem will be exponentially more expensive.

As shown with the example of the increased value of gold and natural diamonds over past decades, precious metals and gems can fluctuate in value but generally increase. Being able to maintain the possession of a valuable piece of jewelry is important from a future financial standpoint. Whereas if you sell the item, it is gone and no matter your level of regret later in life, it will still be gone. 

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With all this in mind, it is evident that it is by far much better to pawn your jewelry as opposed to selling it outright. So the last thing you need to do is make the decision as to where you will take your items. We have many years of experience in working with the public and have developed a reputation for being experts in the field. We offer both the option to sell your jewelry outright or enter into a short term low interest pawn loan agreement. Our experts maintain up to date knowledge of market trends, and average value rates on both precious stones and precious metals. 

So remember, should you find yourself in need of money and in possession of precious metals, gems or jewelry, your most financially intelligent option is to use your jewelry items as collateral on a short term low interest pawn loan. You will maintain ownership of the items, be able to obtain a larger sum of money, and not have to feel guilty about selling off great uncle Jacks Masonic ring. Not to mention helping a local business stay solvent in an increasingly online sellers market.

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