Pawn shop have gotten a bad rap in recent years thanks to popular television shows such as “Pawn Stars” and other reality shows that highlight unsuspecting people scoring big cash windfalls. But pawnbrokers and their stores serve a useful purpose: they provide short-term loans for those who may not qualify to get a loan from a bank or credit union. Their loan customers are often working families who need money for bills or unexpected expenses. Pawnshops are also regulated and heavily supervised, ensuring that they do not buy stolen merchandise.

Nearest Pawn Stores: Finding the Best Options in Your Area

The first function of a pawn shop is to allow consumers to bring something they own and use it as collateral for a short-term cash loan at a high interest rate. The pawnbroker will evaluate the item and offer a price – which is usually less than what the item would cost new. The consumer can either choose to redeem (buy) the item within 30 days or forfeit the item and the pawnbroker will sell it.

In addition to offering loans, pawnshops often sell brand-new retail items, such as musical instruments and firearms. They also accept and sell remittance and bill payment services, providing financial one-stop shops for the communities they serve.

Aside from selling retail items and pawning items, most pawnshops specialize in particular types of merchandise or purchase certain kinds of goods and then resell them to the public. Jewelry is a common purchase and sale item, along with electronics, collectibles and tools. Some pawnshops offer a layaway program, allowing consumers to buy an item and pay for it over time.