How okay is it to purchase from a pawnshop?
May 5, 2007 1:05 AM   Subscribe

What is the risk of buying stolen or otherwise morally questionable goods from a pawn shop?

Me and my SO were cruising a pawn shop today in a busy, but somewhat sketchy, part of town, and we noticed a high percentage of some unusual items beyond expected items suhc as TVs, bikes, jewelery, cameras etc. In particular, there were a lot of tools and toolboxes I would expect to find useful to professional tradesmen, a few (nice) lawn mowers, and various other high quality specialized items.

I understand from googling that pawn shops are fairly highly regulated in many areas, with the pawnbroker associations claiming that less than 0.01% of items are actually hot. I find this a bit hard to believe, so I'm wondering if anyone knows if this is a realistic estimate, and if not, what is a more realistic number?

I saw a couple of nice things that I would probably look at again (camera equipment mainly) but something doesn't sit well with my conscience about buying from a place that primarily feeds on others unfortunate situations (either through theft or misfortune). Not really knowing much about the places however, I'm wondering if this is a narrow view of their true function...
posted by ThinkNut to Shopping (33 answers total) 3 users marked this as a favorite
 
Your concerns about theft are legitimate, but the unfortunate circumstances? It's true that nobody wants to find themself in a situation where they need cash so quickly they can accept the low prices of the pawn shop, but: when it does happen isn't it better to have that option?

The more they sell stuff they more they'll pay for stuff, which means the more people who need a few bucks to get out of a squeak can liquidate their guitars and get out of their squeaks.
posted by aubilenon at 1:42 AM on May 5, 2007


Well, where I live, such shops have to keep records of all goods' provenance for the police. )And online auction sites are a far better fence than a pawn broker with permanent premises.

If nobody bought from pawnshops or secondhand shops, there would be no money for desperate people who really need to pawn their goods. It's true you are making something from others' misfortune, but if you didn't, they would be even more unfortunate.
posted by i_am_joe's_spleen at 2:16 AM on May 5, 2007


Good lord, when I was on welfare I had to sell basically anything those people would take... and while I was pissed that I was totally being lowballed, I had no other option, so it was definitely better than nothing.
posted by loiseau at 3:33 AM on May 5, 2007


I've had to pawn things on more than one occasion, and if no one bought them, that option (which was my last) wouldn't have been there for me. So no, don't feel bad about it. It's a shitty last ditch effort, but sometimes you need that.

As far as hot items go, joe's spleen has it correct that pawn shops keep a log of who sold them what for a certain amount of time in case the goods are stolen.

If you found a good deal go for it.
posted by Roman Graves at 3:42 AM on May 5, 2007


Hmm, a business that "primarily feeds on others unfortunate situations". Seems that that would cover, well, most businesses and occupations. Doctors and hospitals, plumbers, handymen, etc.
posted by megatherium at 3:43 AM on May 5, 2007 [1 favorite]


Hmm, a business that "primarily feeds on others unfortunate situations". Seems that that would cover, well, most businesses and occupations. Doctors and hospitals, plumbers, handymen, etc.

The problem is that pawn shops put you right in contact with the unfortunate situations. This is what might be sticking in the OP's throat. If you see, say, a child's toy, then the chances of a prior unhappy situation are pretty high.

But pawn shops have been around for years, and years, and years. I live a comfortable middle-class life but I hear stories about my grandma pawning my grandfather's suit on a weekly basis, back in the old days. It was a way of getting money to tide you over until the pay packet came in, when the suit would be bought back. So you could argue that pawn shops are an unfortunate but useful side effect of commerce. At least they're legitimate and trustworthy for those selling/pawning. I wouldn't go within a million miles of one, however.
posted by humblepigeon at 3:59 AM on May 5, 2007


I would have to say I would consider pawn shops lesser of a problem to the poor than rental stores and check advance/cashing companies. Especially these days when pawn shops have less of an influence.

I doubt that you will find much in the way of pricey stolen goods there. It's one of the first places detectives search and I'm sure most pawn owners stay on the good side of the police by either refusing sketchy items or notifying the police about them.
posted by JJ86 at 5:17 AM on May 5, 2007


there is generally no logal risk, certainly a moral dilemma as many of the goods will be stolen, and no warranty, gurantee or certainty of authenticity of any description.
posted by jannw at 6:09 AM on May 5, 2007


If you like the item and are happy with the price, go with it. IMO there's no moral dilemma--I think most of the goods probably aren't stolen. If you think about it, pawn shops have an incentive NOT to take stolen goods as they are exposing themselves to huge potential losses if the goods are confiscated (not to mention reputational effects).

I also don't buy the "moral" arguments regarding pawn shops/cash advance places/rent to own places. They are just providing a service, just like any other business in the community. People don't have to go there if they don't want to. The fact that people do says there is a demand for the service the provide. At the point you are using these services, none of your options are great--but which is better, getting the cash you need on less than ideal terms and making rent or not having any way to raise the money and getting evicted?

In fact, the more of these businesses that operate in a given community, the better--if they have to be competitive with each other, things get better for the customers.

Your morality is to be commended, but I think you have nothing to worry about in this situation.
posted by jtfowl0 at 6:25 AM on May 5, 2007


Best answer: I can't tell you about all pawn shops, but I can tell you how they're run in Oklahoma.

When someone pawns or sells an item, a pawn ticket is filled out that has three copies. The first one is for the customer, if they're only pawning the item. The second is for the shop, for records keeping. The third is for the police. We didn't flood the police with these tickets, they were simply kept locked away safely. The local police would come by on a semiregular basis looking for a few stolen items, and if anything matched, it was immediately put on police hold. Could not be sold, could not be returned, and was basically a big loss for the store at that point.

Needless to say, buying stolen goods wasn't in the best interest of the owners. Of course, the police only have so much time and manpower, so it wouldn't surprise me if a few stolen goods went through the place, but anything with a decent dollar value on it would have been reported if it were stolen.

As for the goods you found there, here's some information on that. Tools, particularly those for skilled craftsmen, are very common in pawnshops. Contractors often live job to job, and I've seen guys who would pawn half their gear to cover material costs for the job, and pull it out when they got paid enough to do so. It's sadly expensive, and defaulting could mean their livelihood. As for things like lawn mowers, that depends on a few things. You could be seeing a bunch of lawn mowers that people pawned in September/October, never picked up, and held through the winter.

I know that not every pawn shop is kept honest in this matter through stinginess. At the same time, a smart pawn shop owner doesn't want to wind up setting off police alarms. The records were mandatory, and from what I heard, Oklahoma is relatively lenient in that the customer's pawn ticket isn't mandatory to retrieve the item, simply valid ID.

In the end, pawn shop items are usually the product of people who have difficulty managing their money, buy expensive toys when things are good, and have to sell it off when money is tight. I'm sure some of the customers took that money and spent it on meth. I know some customers would state outright that the money was for booze and smokes, and I knew that was the most honest thing they'd say in that store. Others pawned to pay the bills, get money for contracting work, or other such stuff.

So, what's my advice to you on pawn shop purchases? I'd think twice. It's probably not stolen, although I'd say the 0.01% figure is blowhard propaganda. The condition of the item is going to be questionable, does it work as good as it looks? You'd be supporting the pawn shop lending practices, which for where I worked, was 240% per year.

It's not a pretty industry, although it's not all bad. Enough time in there really kills one's faith in the general public being rational, moreso than usual. Still, the end result is you get a shot at discounts on used items due to the lack of foresight of others. There is always the risk of stolen goods, or goods sold for drug money. The latter is far more common, and if that bothers you, probably best to just stay away from pawn shops.
posted by Saydur at 6:58 AM on May 5, 2007 [3 favorites]


A pawn shop is in a class with check cashing rackets, payday loans, and rent-to-own stores. The take advantage of poverty to give people less than the market value of their items.

Pawnshops charge a steep interest rate to the seller who is able to buy back her stuff.

I think your qualms are valid.
posted by serazin at 7:00 AM on May 5, 2007


i was wondering about this the other day, my buddy who used to manage a pawn shop says stolen crap is taken from the shop by the police at a complete loss, so if they really think something is stolen, they usually won't touch it. He really thinks that the majority of folks that go through there are just down on their luck and not trying to unload stolen goods.

A new local law in may soon require every person that pawns or sells items to them be photoed with the item, have their car and license plate photoed, and have the person photoed with the merchandise, along with all the info they already have to enter into a system that the police have direct access to.

no-one is naive enough to think that this stops all thieves, i'm just saying there are systems in place...
posted by yeahyeahyeahwhoo at 7:06 AM on May 5, 2007


I'd think it would be pretty easy to steal something, then pawn it at a shop far enough away that the police wouldn't search there. Would the police really check every single southern Virginia pawn shop looking for a $1000 bike, or $2,500 computer, stolen from Durham, North Carolina? I mean, can you really assume that pawned goods aren't likely stolen?
posted by amtho at 7:15 AM on May 5, 2007


My pawn experiences:
I have not pawned anything, but I do sell my unwanted DVDs and CDs to a pawn shop, once a year or so. I could (maybe) get more on eBay, but only if I take the time to list them. With a pawn shop, I walk in, and walk out in 10 minutes with cash. It's not out of desperation, or bad circumstances (well, maybe once) but rather a way to convert something I won't use again into a few dollars to use for something I can enjoy.

I have also purchased things at pawn shops. Usually movies or CDs. I have found cameras and other items to me more expensive than I can get them on eBay or garage sales or thrift stores.

I have also seen an item stolen from me show up in a pawn shop.
posted by The Deej at 7:22 AM on May 5, 2007


Don't ask MetaFilter about the morality of capitalism, or you'll get stuff like: "I also don't buy the "moral" arguments regarding pawn shops/cash advance places/rent to own places. They are just providing a service, just like any other business in the community. People don't have to go there if they don't want to."

People often do have to go there when they don't want to. And while I've been tempted, the cardinal rule that I've followed is not to buy anything that's directly related to livelyhood— no tools, no musical instruments. I see far fewer moral complications in things like video games (the only things I've really bought at a pawn shop— we were on a school fieldtrip, no less— were some Prince cassettes and some Atari games, and this was the late '90s).
posted by klangklangston at 7:29 AM on May 5, 2007


@klangklangston: Why should you think of a pawn shop/cash advance/rent to own place any different than a traditional credit card or bank? Usury is usury. Either it is all ok or its all wrong. Saying that they aren't the same is discriminatory--it is denying the opportunities for credit to the poor. Credit is ok for the rich, who are smart enough to handle it, but not ok for the poor, who we must protect from themselves?

Certainly, the opportunities for credit between the rich and poor will be different, as they have different default risk. If borrowers don't pay lenders a premium to offset this risk, nobody would ever offer credit to people of high risk.
posted by jtfowl0 at 8:37 AM on May 5, 2007


Again consider 2 scenerios:

1. You can't make rent, so you get evicted from your apartment and are homeless.

2. You can't make rent, but the pawn shop down the street will give you cash for some of your stuff so you can make rent and keep your apartment. You have the choice of whether or not this tradeoff is worth it for you, but the pawn shop is there if you decide to use it.

How can you argue that 1 is better than 2? I'm not saying that the choices are good or easy, but they are choices. IMO more choice is always better than less. If nobody buys stuff from pawn shops or government makes regulation too stiff and drives them out of business, everybody is stuck with 1. The fact that people buy from pawn shops keeps 2 a reality, and, although ideally nobody would ever need to use their services, I think most people would agree that we are better with them than without them.
posted by jtfowl0 at 8:53 AM on May 5, 2007


This is so not the place for a protracted argument on the morality of pawn shops. I encourage ThinkNut to go with their gut— if they have that twinge of skeeviness, they're probably right not to shop there.
posted by klangklangston at 9:02 AM on May 5, 2007


This is so not the place for a protracted argument on the morality of pawn shops.

But isn't that exactly what the question asks for? This statement, along with your earlier comment makes me wonder if what you really mean is "This isn't the place for views contrary to mine."

I know some people who used to use pawn shops as instant garage sales. They've moved on to consignment stores though (I'm not entirely sure what the difference is...). The trouble is, you can't tell what stuff has been willingly parted with and what has been pawned under duress. As mentioned upthread, prices seem higher than thrift store or ebay anyway, so I avoid them for that more practical reason.
posted by jaysus chris at 9:42 AM on May 5, 2007


Response by poster: Thanks for the great (range of) answers everyone.

I see the point of those who suggest that having access to the pawnshop can be valuable for paying rent etc. I guess what niggles at me is that this form of credit isn't necessarily sustainable and I have a hard time equating it with other forms of regulated credit even though that may imply a degree of socio-economic discrimination. Pawning my material goods for a number of months to make rent may leave me with an empty apartment. Of course I can also overextend myself with traditional forms of credit (eg. banks etc), however at least in this case other protection mechanisms such as bankruptcy exist, which enforce credit counseling etc.

Its obvious that the pawnshop can be a necessary resource on an occasional basis, but given the possibility that funds raised are used for funding illicit activities as pointed out by Saydur, and the concerns above, I'll likely be driving by next time.
posted by ThinkNut at 9:46 AM on May 5, 2007


Klang, I respect your stand to not buy things associated with livelihood, buying the item is not depriving or causing more hardship for the original owner. Stuff that is on the sale floor has either been sold to the pawn shop outright, or the original owner has not paid back the loan. The owner can also pay a monthly fee to keep it from being sold. In short, if it's for sale, the owner has decided the money was more valuable than the item.

Plus, people change livelihoods all the time, and they upgrade. My computer is part of my livelihood, but when I get a new one, I sell or give away the old one. If I wanted a quick buck from an old computer, and didn't want to hold a garage sale or list an ad for it, I would have no hesitation in selling to a pawn shop. And I would hope a buyer would have no hesitation in buying. One person's "old and busted" is another one's "new hotness."
posted by The Deej at 9:46 AM on May 5, 2007


Best answer: jtfowl0,

All banks, credit card companies, check cashing companies, cash advance companies have the same goals. In fact, they're often the same companies. They want to make money. The differences are that companies that cater to the wealthy are forced by customer demand and by legal restriction to charge reasonable interest rates, and the companies that cater to the poor charge completely unreasonably and much, much higher interest. Pawn shop interest can easily go as high as 100% a year or more.

Pawn shops, check cashing, and cash advance are taking advantage of poor people in a much more intense and severe way.

And poor people, who's options are limited in these areas, should and actually often do have access to credit unions and community banks.

If you really want to support poor people's economic stability, put your money in, and get your loans from, local community banks that reinvest in the community.
posted by serazin at 9:59 AM on May 5, 2007 [1 favorite]


Actually, I would think that buying smaller items would be more problematic than buying big ticket items if you are concerned about the potential for purchasing stolen goods. Which hot item is more likely to cycle through through a pawn shop unnoticed: CDs, DVDs, and video games, or a really expensive digital camera or musical instrument? I can speak from personal experience that the police don't seem to do much to recover small-ticket items, and most media you purchase at Best Buy doesn't come with a unique serial number.
posted by jtfowl0 at 10:04 AM on May 5, 2007


@serazin: You make good points--really, the future here is microcredit (my personal opinion, but the Nobel Prize Committee seems to agree with me). I'm certainly not arguing that supporting pawn shops and the like is the best way to help the poor and under served in the community.

(tangent) The ultimate question is, to what extent are the higher rates charged by check advance places, pawn shops, etc. determined by the higher risk associated with their clients and what extent are they determined by their ability to exploit the market? Certainly, there is some of both. Businesses everywhere charge what they can get away with charging (ask my credit card company, who recently raised the penalty for missing a payment to something like $50). But to say that these businesses should be illegal or boycotted or regulated out of existence isn't helping anything. Ultimately, you are right in that helping the poor have better information regarding the choices available to them is the best way to help. (/tangent)
posted by jtfowl0 at 10:19 AM on May 5, 2007


If you question the provenance of the item, do not purchase it. Simple rule.
posted by Ironmouth at 10:46 AM on May 5, 2007


I'd just like to add that St. Nicholas is the patron saint of Pawn Shops.

If Santa Claus is involved, it can't be all bad...
posted by cinemafiend at 11:39 AM on May 5, 2007


I think as long as you have a reciept from the Pawn shop, you are safe. (You can show it to the police to prove that you bought that item from the shop)
posted by WizKid at 12:20 PM on May 5, 2007


The plural of anecdote is not data obviously, but just to throw in a personal experience, a weed whacker stolen from my family was found in a local pawn shop once. (And yes, it was returned to us.)
posted by srrh at 12:59 PM on May 5, 2007


If you want me to argue, take me to MeTa. Otherwise, I've said my piece and trust the OP to decide.
posted by klangklangston at 1:47 PM on May 5, 2007


In Seattle, pawn shops are required to report serial numbers to the police to help locate stolen goods.

When my bike was stolen, I waited two months to see if it turned up in a pawn shop before I bought a replacement. Several months after buying a new bike, the police called to tell me that my stolen bike had been recovered. In a pawn shop.

Tha Pawn-X-Change branch at 10526 Aurora Ave N. in Seattle had transposed the bike's serial number before reporting it to the police, and thus the bike wasn't flagged as stolen (a detective doing a walk-through saw the bike and recognized it from the description in the police report).

I suppose it would be easy to make an honest mistake when copying down a serial number. It would also be convenient when buying huge volumes of random valuables from a suspected (later convicted) pair of meth-addicted burglars.
posted by reeddavid at 2:46 PM on May 5, 2007


Comment from a user who would prefer to remain anonymous

1. You can't make rent, so you get evicted from your apartment and are homeless.

2. You can't make rent, but the pawn shop down the street will give you cash for
some of your stuff so you can make rent and keep your apartment. You have the
choice of whether or not this tradeoff is worth it for you, but the pawn shop is
there if you decide to use it.


There are other choices, like..

3. You can't make rent, so you create high quality sales listings on craigslist,
ebay, or BST forums.

That approach is bound to net at least 2x the used goods dealer's price.

I've recently had the experience of telling someone struggling to make a payment
how to sell his possession, and what price to expect from a quick sale. He
ignored me completely. The circumstance was a little complicated, but the basic
gist of it was, he decided the minor effort required was too much, and he looked
for a quicker fix (aka pawnshop). If that quicker fix didn't exist, he would
have been forced to take the more rational action I suggested.

On the other hand, I'm pretty sympathetic to aubilenon's notion: "The more they
sell stuff they more they'll pay for stuff". A healthy market in legitimate used
goods is a benefit to society in too many ways to count.
posted by jessamyn at 3:30 PM on May 5, 2007


There are other choices, like..

3. You can't make rent, so you create high quality sales listings on craigslist, ebay, or BST forums.

That approach is bound to net at least 2x the used goods dealer's price.


It's true that they make much of their money off people to whom time is of the essence. They MUST have some money NOW. Or they think they do. In the case of making the rent, you would think they could negotiate with the landlord to buy a little time. It's not that uncommon. Then, set up some 3 or 5 day eBay auctions.

When I sold some DVDs to a pawn shop, I knew it was for less than I could get on eBay. It was about 10 DVDs, and I probably would have gotten another $20 to $30, but I felt my time was more valuable than that. Time is money, in different ways to different people. And even though this shop doesn't pay much for DVDs, they sell them pretty cheap as well, so I don't feel like I am getting ripped off. I browse for DVDs and CDs there a few times a year, and have gotten some good bargains. To address the question: no I don't think about the possibility that might be stolen, but I suppose they could be.

I do know of people who have sacrificed high-ticket items for next to nothing because they were in a jam. In fact, I rescued a wedding ring set (which I bought) more than once, that my ex decided would be put to better use converted into gambling money. Probably a $1000 set pawned for $125.
posted by The Deej at 4:06 PM on May 5, 2007


I'd think it would be pretty easy to steal something, then pawn it at a shop far enough away that the police wouldn't search there. Would the police really check every single southern Virginia pawn shop looking for a $1000 bike, or $2,500 computer, stolen from Durham, North Carolina? I mean, can you really assume that pawned goods aren't likely stolen?

Very true, especially if you crossed a state line.

I've always wondered, actually: if you murder someone on the south coast of England, wouldn't it be really easy to hide the evidence by driving to the Scottish highlands (or somewhere else suitably far away) and dumping the evidence there? Would the police ever seriously work it out?
posted by reklaw at 4:31 PM on May 5, 2007


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