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4 Common Myths About Pawn Shops You Shouldn't Believe

Pawn Shop Sign
If you are looking for inexpensive electronics or jewelry or want to sell some of your own items to get cash for an emergency, holiday, or birthday, you might be considering visiting your neighborhood pawn shop. The one thing that might be giving you pause is the negative, false information you've read or been told about pawn shops.
In reality, pawn shops are legitimate businesses run by caring professionals who want to be a positive part of their community. The following are a few common myths about pawn shops and why they aren't true.
1. Pawn Shops Knowingly Sell Stolen Goods
Many people shy away from purchasing or selling merchandise in pawn shops because they believe that many of the items on the shelves are stolen. Pawnbrokers are knowledgeable and are, in most cases, aware of anyone who attempts to sell them stolen items. If they later discover that the item is stolen, they will work with the authorities to ensure that it is returned to its rightful owner.
According to Florida law, pawnbrokers must meet several criteria before they are even allowed to open a shop. For example, no one who has been charged with certain types of felonies, including larceny, burglary, embezzlement, or knowingly receiving stolen items is allowed to open a pawn shop. Additionally, to be awarded a license in Florida, a pawnbroker must complete a lengthy application.
No pawnbroker would put their reputation or livelihood in jeopardy by knowingly receiving or attempting to sell stolen goods.
2. Pawn Shops Charge Outrageous Interest Rates on Loans
Many Florida pawn shops provide secured loans. This means that there is collateral attached to the loan. For example, an individual will bring electronics, jewelry, or antiques, and this will act as collateral for the loan. The interest rates provided by the pawn shop are set by the state of Florida — not by the shop's owner.
The loans are intended to be short term, and the borrower is only allowed to secure a loan that is the monetary equivalent of their collateral. This is meant to ensure that the borrower doesn't become overwhelmed by the payments.
3. Pawn Shops Want to Keep Your Merchandise
Another common myth is that pawn shops want their customers to get behind on their payments because they will forfeit their collateral. Many customers who secure loans at pawn shops are repeat customers. This means that they successfully paid the loan and were given their collateral back.
Pawnbrokers would prefer that customers make their payments on time and in full. They would rather receive the value of the item, plus interest, instead of attempting to sell the collateral. When a loan isn't paid in full, the pawnbroker is actually losing money because of the expense of keeping the collateral on their shelves and attempting to sell it.
4. Pawn Shops Are Closing at a Fast Rate
There is a final myth about pawn shops that couldn't be further from the truth: the idea that these shops are becoming obsolete and are closing across the country. In reality, several pawn shops are thriving and opening across the United States, including Florida.
Most pawn shops are owned and operated by seasoned professionals who have an amazing relationship with their customers and their neighbors. Pawn shops offer a convenient way for people to secure a short-term loan, purchase items at a discount, or even find the ideal engagement ring for their sweetheart.
From unrealistic loan terms and interest rates to brokers who deal in stolen merchandise, many people have false misconceptions about pawn shops. If you have any more questions, contact the professionals at 2 J's Pawn & Gun.