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Nothing Else Like a Pawn

PAWN TRANSACTIONS SHOULD BE CONSIDERED DIFFERENTLY

Pawnbroking is frequently misunderstood and is often lumped in with other forms of non-bank credit. Alternative lending institutions are the central focus of pending legislation that would cap the rates charged at 36% APR, but pawn shops are not specifically excluded. This could mean that thousands of pawn shops could be shut down, leaving consumers with no comparable option.

Pawn transactions should be considered differently because there is nothing like a pawn. Pawns are non-recourse, meaning that a pawn transaction doesn’t perpetuate the cycle of debt and is not predatory. Pawns never impact a consumer’s credit score, and the transaction is governed by over a dozen federal plus state and local laws. For many consumers, pawns are an essential lifeline for unexpected expenses.

PAWN’S INTEREST RATE CONSIDERATIONS VS. APR CALCULATION

The pawn shop business model is unique and not comparable to lenders when it comes to Annual Percentage Rate calculation (APR). First, pawnshops are also retailers. The pawn interest rate structure sets a balance between the expected resale value and the interest charges of an item. Pawns are short-term, with simple interest. The terms, regulated by each state, are measured in days—30-day or 60-day terms are common. Annual Percentage Rate, by contrast, is calculated yearly and applies to financial institutions that deal in installment loans and compound interest loans. 

PAWN SHOPS ARE RETAILERS TOO

Another critical difference between pawnshops and other lenders is that pawnbrokers must provide secure vaults and spaces to store pawn collateral safely while in their care. As retailers, pawnshops assume all the risks and costs of running a successful resale storefront and e-commerce store. If a borrower chooses to surrender their collateral, the pawnshop bears the cost of bringing an item to market and reselling that item for a profit. The net resale profit of an item, after expenses, is related to the interest charges. These fundamental differences are exclusive to the pawn industry and are just two of many things that set pawnshops apart from all other forms of credit.

PAWNSHOPS ARE ESSENTIAL BUSINESSES

During COVID shutdowns, pawnshops across the entire country were deemed ‘essential businesses’ because of the countless people who depend on them.  Pawn was essential then and are essential now.  The bottom line is that pawn is an essential industry that should be excluded from proposed rate cap legislation. 

 

Brochure: The Truth About Pawnshops

The National Pawnbrokers Association has assembled a tri-fold brochure with essential facts about pawnshops. 

Bravo PawnTech Trend Report

This valuable resource offers insights that only the industry leader in data could provide.  

How Do Small-Dollar, Nonbank Loans Work?

The aim of this guide is to provide a basic understanding
of the workings of small-dollar loans supplied by nonbank providers. 

The intended readership includes state legislators, state regulators, the staffs of state legislators, members of the
US Congress and their staffs, federal regulators, industry practitioners, consumer advocates, and interested citizens.

Vox: Pawnshops and the Pandemic

It's easy to assume pawnshops are doing great in the pandemic. It's also wrong.   

Vanderbilt University Study: Pawn shops offer cash when others turn people away

As humankind’s oldest financial institution, pawnbroking has served the financial needs of low-income families for centuries. This academic study reviews the history of pawn credit and  presents unique data to show aggregate trends, and, shed light on the social and financial background of pawnshop borrowers and their behavior within the pawnbroking industry

What’s the Difference Between Payday Loans and Pawns?

Not all alternative lending products are the same. Learn about the difference between recourse and non-recourse loans. 

Why People Focus on APR and Why They Shouldn't

Pawnbroker Steven Adsit offers insight why rate caps are harmful to the consumer. 

CFPB: Making Ends Meet series: Consumer use of payday, auto title, and pawn loans

In this research brief, the CFPB examines the prevalence, persistence of use, and alternate credit sources available for consumers who use payday, auto title, and pawn loans. 

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Click to connect with these businesses that support the exclusion of pawn from rate caps legislation:

Learn more about these industry leaders who stand with independent pawnbrokers across the country: 

Tennessee Pawnbrokers Association

 

 

The Tennessee Pawnbrokers Association, or TNPA, is currently being established as a means to inform, build and protect small business or independence within our industry.

We offer an assortment of resources including information about our trade and mentoring programs. Learn more and get involved at tennpa.com!

Nine independent pawnshop locations in Pinellas, Pasco, and Hillsborough counties in Florida www.866pawn.com.

 

Mid-States Recycling and Refining specializes in accurate, verifiable, and transparent precious metal refinery services for customers throughout the United States. We provide the highest returns, work that meets or exceeds industry standards, and service delivered with integrity and accountability.

Using today’s most advanced smelting, sampling, and refining technology, performed by highly trained refining specialists and chemists with decades of industry experience, we offer the most comprehensive refining, assaying, and in-house metal trading for all precious metals, including:

  • Gold
  • Silver
  • Platinum
  • Palladium
  • Rhodium
  • Iridium

We also provide diamond and gemstone recovery services for jewelers and pawnbrokers.

Independent pawnshop in Ozark, Alabama. Visit www.pocketpawn.com!

Posh Pawn is a family-owned business in San Diego that specializes in buying jewelry, art, collectibles and more.  Visit poshpawn.com to learn more!  

With over 30 years in the jewelry business, Jeweler’s Cut is one of the fastest growing pawnshops in the Southeast, soon moving to a new location! Visit jewelerscutpawn.com!

United Precious Metals Refining is a leading supplier of master alloys, de-oxidized sterling silver, solder and wire products. In addition United is a full-service refiner for your precious metal needs. United’s success in the precious metal industry is due to exceptional levels of detail and uncompromising customer service. visit their website to learn more unitedpmr.com.

Union Life & Casualty Insurance Agency (UL&C) has been in the insurance business since 1965 specializing in pawn and related industries for more than 25 years. UL&C has been a proud member of most state level associations for over two decades and has been a member of the National Pawnbrokers Association (NPA) for 25 years. We understand this industry and we support it! Learn more at pawninsurance.com.

Star Gems has been a leading designer and manufacturer of high-end fashion jewelry since 1986. It also offers much more than just jewelry, with one of the largest ideal make, certified (GIA, AGS, and EGL) diamond inventories in the Southeast, supplying anything from 0.50 and up to 5.00 carats, including natural and fancy colors. Learn more at stargems.com.

Capital Pawn, with five locations in Oregon, offers upscale value shopping in a friendly environment with a focus on sustaining the local community. We are a family-run, family-friendly pawn, loan, and trade business. Learn more at cappawn.com!

Tysons Watch and Jewelry Exchange is known has been providing outstanding customer experiences and services for over 25 years in the Washington DC area. Located in Tysons Corner, they have a highly trained, tenured, and dedicated staff ready to make sure that your transaction is handled according to your needs. “Luxury for Less” is the core of who they are at Tysons Watch and Jewelry Exchange. Learn more at watchandjewelryexchange.com!

Bravo

Bravo’s award-winning software solutions equip customers with the software solutions and services needed to deliver superior employee and customer experiences, make data-driven business decisions, operate efficiently, compete effectively and improve bottom-line results.  Learn more at bravostoresystems.com. 

Pawnbrokers who are willing to adapt their business to new innovations and practices are winning. It is the early adopters who are going to pull ahead of the pack and buck the trend of pawn store closures. Being stuck with an out-of-touch approach to customer service, sales, and technology does not work and we are seeing record store closures in the USA and in the global markets in which we serve.

Are you ready to take action? We are here to help. Pawnshop Consulting Group, LLC., has a variety of systems of pawn shop consulting programs to take your pawn business from slow to grow. Our seasoned veteran pawnshop consultants provide the specialties you need to think outside of the box and succeed in this increasingly challenging business environment.

 

Burrell Printing is the pawn industry’s #1 source for pawn forms as well as promotional products that pack a punch.  They have generously printed and distributed the ‘Facts About Pawn’ brochure for almost 300 pawnbrokers. Visit them today at www.burrellprinting.com

With 400+ clients spread across 40+ states, we are able to help navigate through the local, state and federal regulations many find burdensome and confusing. Visit theconsultants.us.

 

HOUSTON PAWN was founded with respectable business ethics, value, and the desire to offer the best customer service. 

Our trendy and secure stores offer our customers a wide range of items in a secure and safe environment. We buy, sell, loan, or trade fine jewelry, fine watches, and many other valuables. If you are in need of immediate cash, we are at your service.

Since opening the doors in 2007, they have expanded our business to include three Houston Pawn locations and another Cash Presto Pawn! Learn more at pawnbuysell.com!

Known for their outstanding customer service and extensive luxury inventory, in Atlanta, Georgia. Visit dynastypawn.com! 

Marshall & Sterling Insurance

Assessing risk and protecting your business from loss is critical. The best way to do this is by aligning your company with the right insurance partner. A partner that truly understands your unique business needs and goals, while delivering exceptional coverage and a competitive price. Learn more at marshallsterling.com!

 

 

Garden City Pawn embodies everything a modern day pawn store should. If you need quick cash, want the lowest interest rate on a pawn loan, and want an honest, upfront and clean pawn store to do business with, then Garden City Pawn is the place for you. Visit www.gardencitypawn.com!

Owned and operated by the industry’s latest Image Award winner, Lisa Little, Fieldstone Jewelry and Pawn is family owned and operated since 1987 in Conyers, Georgia. Visit their website at fieldstonejewelryandpawn.com!

VA Premier Pawn is the highest-rated pawnshop in Hampton Roads, Virginia. They are committed to raising the standards of the pawn industry by leading in our commitment to our pristine showrooms, expert staff, and people-centered customer service. Visit vapremierpawn.com or follow them on social media (including @Gold__Guy on TikTok) to learn more! 

Dr. Gold Jewelry and Diamonds is a diamond specialist offering engagement rings, pendants & gemstones, plus vintage jewelry & watches. Learn more at drgoldjewelry.com.

EZ Pawn Corp

Established in 1996, EZ Pawn Corp has made it its mission to serve its customers in the best way possible. We enjoy keeping our service friendly, quick, and easy. Learn more about them at ezpawncorp.com and check out their behind-the-scenes videos below! 

 

Since 1927, people throughout the area have come to Wood’s Loan Office in Atlantic City, New Jersey, to get cash quickly and securely on jewelry, musical instruments, and other items of value. Through the years, our company has helped generations of customers with our honest and reliable service. Learn more when you follow them on Facebook! 

 

From humble beginnings in 1987, Uncle Dan’s Pawn has grown to one of the largest independently-owned pawnbrokers in North Texas. Now with eight pawnshops and a retail outlet store, we keep our overhead low in order to bring our customers the best values possible. They sell NEW and gently-used, diamond jewelry and name-brand merchandise at a fraction of retail. Plus, we pay top dollar for gold and diamonds! Learn more at uncledanspawnshops.com

What is a Pawn?

How does it work?

Behind the scenes at one of the country's most successful family-owned-and-operated pawnshop companies:

These videos, produced by New York’s iconic EZ Pawn Corp, provide behind-the-scenes access to one of the top pawnbroking operations in the country. We’re grateful to EZ Corp for allowing us to use them to help shed light on the pawn industry. Learn more about them at ezpawncorp.com!

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Special thanks to these advertising partners:

Take a tour of a pawnshop

Many of the leaders and legislators who make decisions that impact this industry have never even visited a pawnshop. If you’re one of them then we’d encourage you to start with a virtual tour: 

Pawnbroking Insights

PAWN SHOPS BY THE NUMBERS

There are more than 74,000 people who work in this industry. Even more work in businesses that are connected to pawn including insurance, software, refining and metals, jewelry wholesalers, and more.

More than 63 Million Americans are unbanked or underbanked and rely on alternative lenders for their financial needs.

Approximately 10,000 pawn shops are independently owned by entrepreneurs who live, work, and contribute to their communities. Their stores are a valuable resource to their customers, stakeholders, and neighborhoods.

PAWN SHOPS ARE GOOD FOR THE ENVIRONMENT

Pawn shops offer quality used items at a significant discount, keeping tons of discards out of landfills and offering carbon-conscious consumers an infrastructure by which they can shop sustainably.

Old and broken jewelry, among other precious metal items, are no exception.

Pawn shops are a significant source of recycled gold and play a major role in responsible sourcing efforts for jewelry manufacturers. In recent years, jewelers have begun sourcing only recycled gold from jewelry scrap that consists primarily of old or broken jewelry bought over the counter at pawn shops across the county. Refiners source gold and silver scrap jewelry from pawn shops. 

This scrap is refined and recycled to make new products that are then sold to jewelry manufacturers. Pawn shops play a pivotal role in eliminating the need for mining gold which can be harmful to the environment.

Precious metal items frequently brought to pawn shops: 
Old Gold Jewelry
Broken Gold Jewelry
New Gold Jewelry
Old Silver Jewelry
Broken Silver Jewelry
Sterling Silver Flatware

PAWNSHOPS AND THE POLICE

Less than 1/10th of 1% of the items in pawnshops are ever reported as stolen.

Contrary to old stereotypes, pawn shops actually work closely with police, and many upload their daily transactions to law enforcement.

Pawn shops are regulated by over a dozen Federal Statutes as well as state and local regulations.

PAWN SHOPS AND PERSONAL FINANCE 

Unlike bank loans, payday loans, and most other forms of credit, pawns are non-recourse, meaning the consumer is under no obligation to repay and there is no impact on their credit if they fail to repay the loan.
Pawn loans serve customers from all walks of life. Many have no access or limited access to a bank. Others have exhausted their regular credit facilities. Some have an immediate need and don’t have time to deal with lengthy application processes.

Collateral loans acquired at pawn shops do not require a credit check. If pawn shops are shut down by this legislation, consumers who depend on them are left with no comparable option, thus perpetuating new risks to the very people who can least afford them.

 

Pawn Stories: Who uses pawnshops?

Tens of thousands of men and women work in and around pawnshops.

Millions of customers rely on them.

Here are some of their stories: