History of Pawn shop
Pawning had begun in 506 B.C., before the fall of Western Han Dynasty. Chinese were already providing loans with collaterals during those times. But, the rules and regulations were not yet established. It can take lenders three years to repay and get back their collateral. The industry reached Europe in the Middle Ages.
One of the notable stories of pawning involves Pope Leo X. It was said that he pawned his palace furniture and some silver to fund his luxurious hobbies like collecting expensive art pieces. In 1300s, King Edward III also pawned his possessions so he could raise funds that his military unit will need for the war. Queen Elizabeth was also believed to have her royal jewelries pawned to help fund Christopher Columbus’ voyage into the New World.
Pawn broking in Europe faced controversies in early 17th century. Pawn stores then became a place of stolen items. Authorities had to implement laws to control the issue. They had begun issuing license only to legitimate pawn stores and pawnbrokers.
Up to these days, there are still controversies surrounding pawn broking. People see a Pawn shop as a place that provides too much interest and additional charges. Also, not everyone can understand that pawnbrokers cannot make an offer equal to the retail price of the collateral. Pawnbrokers also look into the resale value of the item in the ever changing market before deciding on how much they can give you.
Laws that govern a Pawn shop
You can guarantee that you can trust the pawnbrokers if they know and follow the laws governing the pawning industry. Major Pawn stores adhere to each of these federal laws:
1. USA Patriot Act
This law gives pawnbrokers the right to ask for customer’s valid identification card before they buy an item. It is to make sure that the customer is not part of any terrorist group. Pawnbrokers may also ask for their customer’s finger prints.
2. Truth in Lending Act
TILA requires pawnbrokers to explain to their customers each term and condition involved in the pawn being made. This law also states that we have to provide you with a written document of the terms. We should also make sure that customers understand the interest rate and the other fees that they have to pay.
3. Federal Trade Commission Safeguard and Privacy Rules
This law ensures that all documents and information given by the customer, including name, address, contact number and bank account numbers, are marked as confidential by the Pawn shop.
The state laws, on the other hand, require us to:
Have a license and have our shop registered.
Follow the interest rate which is 3% to 25%. But aside from this, we are allowed to give extra charges for utility expenses.
Keep records of our inventory. We should jot down their types, brand names, serial number, and model number.
Report each of our purchased items to the police. They will track if it is a stolen good.
Provide pawn tickets.
Provide grace periods or extensions to our customers.
Because pawning can provide quick money, more and more people are becoming interested in it. Broke young adults who needed to pay the rent rummage their closet to find a valuable possession that they could pawn. Family men, who have too many bills to pay including their cars’ fuel and maintenance, also result to pawning. Even the working moms who find old jewelries in their drawers go to a Pawn shop.
Anyone, who is 18 years old or above, can use pawning to fund emergency expenses or unexpected projects. The great thing about pawning is that you can still get the items you pawned whenever you become financially able.
According to the surveys, the average age of pawn loaners is 36 years old. 80% of these loaners are employed. 33% have their own home. The average loan amount made in the entire US for 2015 is 150 dollars.
Practical Tips When Pawning an Item
1. Make sure that the pawnbrokers can be trusted by asking them for license. Do note if the license is still valid.
2. You can always say no to an offer and try other pawn stores.
3. You can request pawnbrokers to increase the offer. They may or may not grant your request.
4. Instead of pawning, you can just straight up sell your belongings to pawnbrokers.
5. If the pawnbroker cannot explain the lending terms to you and the interest rates, consider finding another one.
6. Keep your pawn ticket secured. You will need it when redeeming your item.
7. You can ask the pawnbrokers to extend the due date of your item but you should be willing to pay for the interest.
8. Pawnbrokers may offer different interest rates. Major Pawn offer as low as 3% interest rate.
9. Bring an identification card when pawning and redeeming.
10. Call the pawnbroker before coming to the store to redeem the collateral so they could ready it before you arrive.
Major pawn buy items in any condition, whether they are new, used, or even broken. That’s one of the reasons we have a reputation for being a pawn and jewelry shop that can offer quick cash for gold and other valuables.