January 28, 2023

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Solutions For a Small Business

Pawning Mistakes You Should Avoid

3 min read
11 Dirty Secrets You Don't Know About Pawn Shops

Pawn shops have been around for thousands of years. They are the precursor of financial models that the world has come to know. At one point or another, you may have to visit a pawn shop Melbourne, if not to pawn against your valuable gold then to sell your items for cash. The concept of pawning sounds simple. You have an engagement ring, you would rather get rid of than have it as a constant reminder of a relationship that went wrong. You don’t need an elaborate reason like that to get rid of old jewellery, the bottom line is that you can make money by using those things you don’t need to get cash for the things you do need right now. 

The process is simple: You take your items to a pawn shop Melbourne, a pawnbroker assesses them, and he gives a quote. You either pawn or sell your items. If you decide to pawn because you would still want to get your items back, you sign a pawn ticket. You get your cash and your items are stored away until you return and pay off the loan plus interest. If you fail to honor the terms of your loan, you forfeit your items. The pawnbroker puts them out on the sales floor to be sold so that he can recoup his or her money. You could also just decide to sell your items to the pawnbroker.

As simple as all that sounds, people will make mistakes. The first mistake that people make is failing to do thorough research before approaching Melbourne pawnbrokers. Pawn shops are different and they all operate in their own unique way. Don’t be fooled, even the franchise pawnbroker businesses are different. It could be that they go out of their way to satisfy their customers or that they are a little bit more discerning in what they will pay to-dollar for.  They may prefer more jewellery than electronics etc. They may be known as the best place to go for musical instruments and so on. If you do your research in time, you will know which pawnbrokers you should avoid and which ones to consider.

Other mistakes you should avoid making when you sell anything to a pawnbroker include:

  • Being emotional about letting go of stuff

Your emotional attachment to certain things can get you thinking that some things are worth more than they actually are. Only pawn something you won’t help spend sleepless night agonizing over it.  If you are not ready to part with something for good, then pawn it and make sure you can pay the loan back in time.

  • Not caring enough to dig up information about what you are selling or who you are selling to

You should have all the information that could make what you are selling more valuable. Dig up its history, if it is something from your great-great grandmother’s storied past.  If you’ve seen these pawn shop reality shows, you would have realized how the items with a story behind them generate the most interest. You might find that their pasts influence the present or the future.  Researching your items should include finding out what they cost on the second hand market.

  • Not understanding how golds work

Gold jewellery is the most commonly pawned items in a pawn shop but you need to know how gold is priced. The value of your used gold is calculated by multiplying its weight by the current spot price. You should keep track of the gold spot price but keep in mind that the pawnbroker can only give you a percentage of that value in order to make a profit.

To successfully pawn your valuables, you need to do a thorough research. Know what the value of your items is and what is reasonable for you to ask. Make sure also that you research pawn shops and choose a reputable pawnbroker you can trust.