If you walk into a Phoenix pawn store, you are generally there for one of three reasons – to buy something, to sell something or to get a loan. But it’s important to understand what’s behind the curtain if you plan to use a pawn shop. Pawning or selling items outright may be a good option for acquiring a quick cash infusion, but a pawnshop loan can often be expensive and it can be difficult to repay the full amount of the loan (plus interest) within the required 30-day period.
A pawnshop, also called a pawnbroker, is a store where people bring in valuable merchandise for which they can’t afford to pay the current market price and leave it with the pawnbroker as collateral for a loan. Jewelry, musical instruments, tools and electronics are all common items brought in to pawnshops. Guns and other weapons may also be sold if allowed by law in your state.
Pawn Store Guide: How They Work and What to Expect
Pawn shops are regulated by local and federal laws, including the Equal Credit Opportunity Act and the Truth in Lending Act. In many jurisdictions, pawnbrokers are required to report the inventory they have on hand to police on a daily basis, which helps them identify and return stolen goods.
The pawnshop industry is ancient, dating back over 3,000 years to China and even earlier to Roman and Greek civilizations. The name comes from the pawning practice of pledging property as security for a debt. The traditional pawnshop symbol is three gold spheres suspended from a bar, which is thought to be based on the arms of the Medici family of Florence, Italy.