Here Today, Pawn Tomorrow
Here are some frequently asked questions and answers about the pawnbroking business, along with some invaluable wisdom from Les Gold, fourth generation pawnbroker, star of Hardcore Pawn, and the owner of American Jewelry and Loan.
Q: How does pawnbroking work?
A: What you are doing when you bring an item into a pawn broker is applying for something called a secured loan. A secured loan differs from other kinds of debt instruments because cash is awarded only by surrendering an object of worth as collateral. The collateral may be purchased back from the pawn broker, (usually plus interest) at a time in the future as determined by the contract signed at the time.
Les Says: "We're the poor man's bank... Where else are you going to but the pawn shop?
Q: What happens to unclaimed items?
A: All pawn shops work differently, but in the vast majority of cases, when an item remains unclaimed past the contractually agreed-upon date, the item becomes the property of the pawn shop, and is put up for sale.
Les Says: "When I think I've seen it all, somebody comes in with something so strange it surprises the s**t out of all of us."
Q: What's the difference between selling and pawning?
A: Many pawn brokers give you the option to sell an item once they have evaluated its worth. When an item is sold to a pawn broker, there is no secured loan, and the item becomes the property of the pawn broker to do as he pleases with. When an item is pawned, the item is held by the pawn broker until the customer returns for the item, which he or she can get back before a previously agreed-upon period of time elapses.
Les Says: "Here's how pawn works: you bring an item, we have you go to the window, we evaluate it. We don't call the experts – we are the experts."
Q: How long has pawnbroking been around as a business?
A: Another notorious industry has the title "The World's Oldest Profession," but if prostitution is in fact the oldest, pawnbroking just may be the second-oldest. Pawnbroking existed 3,000 years ago in China, and after being practiced in Ancient Greece and Rome, spread through Europe as the influences of those cultures widened.
Les Says: "I'm a fourth generation pawnbroker. My grandfather, my father, me then Ashley and Sal. We're all pawnbrokers, but we're all very, very different."
Q: What are the most popular items to pawn?
A: Musical instruments, televisions and gold jewelry are all very popular. Generally, pawn shops are interested in portable items of considerable value that can be cleaned up easily and re-sold. Golf clubs and other high-priced sporting goods are popular as well.
Les says: "We've taken the most unusual things anybody can imagine. We've taken alligators, we've taken Bentleys, we've taken jewelry of all kinds. Every item comes with a story."
Q: How can I become a pawnbroker?
A: Regulations vary around the country, but in most areas, you need a special pawn broking license, a business license, and a clean criminal background check. You also need to be a shrewd judge of character. As is the case with the Golds, many pawn shops are family businesses, but that is by no means a requirement to enter the industry.
Les says: "There is no textbook on how to be a pawnbroker."