Myths Debunked
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Pawn Shops are just legalized loan sharks
Pawnshops are fences of stolen property
Pawnshops rip you off by under-valuing your items
This is one of the biggest misconceptions about pawnshops. Pawnshops base loan offers on re-sale value, not retail price. This difference is most easily exposed with jewelry. The majority of consumers hold the misconception that because jewelry is made of gold and precious gems, it is supposed to be very expensive; after all it’s what treasures are made of, right? Jewelry stores are more than happy to leave that public misconception intact and exploit it for their financial advantage through outrageously high prices.
Ever wonder how jewelry stores can have sales several times a year and holidays of 60%, 70% and more off, yet still make enough to stay in business?
Unfortunately the ugly truth is that the consumer is being ripped off, but at the retail side of their buying experience. It is only exposed when they bring that over priced item to a pawnshop for a loan evaluation using real market value.
This is why buying jewelry at a pawnshop is being money smart. You pay for the item’s value, not the posh chandelier ambiance of where you bought it.
Going to a pawnshop for a loan is embarrassing
Using a pawnshop is the most self-reliant thing someone can do in a bind.
You are borrowing from yourself, not from family, friends or your employer.
Consider that you are only converting back into cash the investment you’ve already made when you bought your item. Like getting an equity loan.
Also, all transactions are private, no one will know unless you tell them.