Why would people go to pawn shops?

October 22, 2022 7:06 AM

I've been watching Pawn Stars and I understand why some people need to pawn things, or I thought I did for emergency funds. While I know it is a television show, do people really bring extremely valuable items to pawn shops like gold bars and Jimi Hendrix guitars? Even cheaper items with the rise of Facebook Marketplace and eBay it seems like possibly the worst place to sell random collectible items or do real, non-television pawn shops offer more realistic values.

If I didn't need the money immediately today I would take the auction commission and just take some of the more valuable items to an auction house which Pawn Stars pretty openly says they'll do. There's risk there but you can set a floor for the minimum. The majority of people on the show I assume just want to be on television but do pawn shops really get people not in dire financial straits? Even an antique store I would think would offer more fair prices but I don't have like a Jimi Hendrix guitar so I don't know how this goes.

posted by geoff. to Work & Money (20 answers total)

When you ask, it makes sense to me. It's hard to sell stuff (what price do you put on it? how do you deliver it? can you trust the person buying? can you trust the auction house? what liability do you have? what if they don't show? what if you want it back?). It's hard to part with stuff (what if I need this again? It was my mother's/father's/spouse's. It represents an entire period of my life. What if my kid needs it?). Some people buy storage units and pay to store things (Why am I paying out the nose for my own possessions? What if someone breaks in? If I forget to pay the bill, will they sell off all I own?). And we are all transfixed with the feeling that our possessions are somehow investments, that they represent not only what we paid for them but what we could get for them. (I have a couple of 19th century samplers, for instance, that my spouse swore were worth tens of thousands.)

All this is why, when I consider what my time and mental health are worth, I am not attempting to pawn all the wonderful things in my basement. Instead, I have joined the local Facebook Buy Nothing group and have lately given away a number of Objects of Value so that someone else can be burdened with them.
posted by Peach at 7:12 AM on October 22, 2022 [6 favorites]

All reality shows are fake, as you know. I’ve seen lots of obvious fakeness on these shows, but Pawn Stars is the fakest of the fake. No appraiser gives an estimate to the pawn shop owner in front of the customer in real life. People do pawn things because they are gambling addicts desperate to pay debts, especially in Las Vegas where Pawn Stars is located. (The city is full of billboards advertising pawnshops that are open 24 hours.)
posted by Melismata at 7:14 AM on October 22, 2022 [9 favorites]

I don't know the show and have never used a pawnshop so take this with a grain of salt, but I think the idea behind actual pawnshops is that you are leaving an item as collateral against your loan, so you can pawn things that you want to get back. That's the reason why you might go to a pawnshop rather than sell something on Marketplace IMO.
posted by rubbish bin night at 7:38 AM on October 22, 2022 [47 favorites]

It's probably a combination of having a little more security and a safer selling environment vs. meeting a rando from Craigslist and hoping you don't get robbed, and just having the sale done and getting the cash now. I think most people understand that pawn shops are going to give you far less than the market value of the item, or at least less than what they'll ultimately sell it for. But especially for items where there is some emotional attachment or that feeling of "item as investment", even if the perceived value is inflated, getting rid of it quickly at a pawn shop is like ripping off a Band-Aid. Leaving it at an antique store or auction house allows plenty of time for doubt and second-guessing. In the tradeoff between getting maximum value out of the object, but having to shoulder additional risk in selling, and perhaps waiting a long time to make the sale, vs having it over and done with, at the cost of getting less money for it, selling to a pawn shop pencils out to be a worthwhile "cost" for those sellers.
posted by xedrik at 7:43 AM on October 22, 2022

Yeah, Pawn Stars is a bad example of how pawn shops work. I think in the first season there were a couple examples where people came in a did take out a loan with an item on collateral and they did a little explaining of how that works. Otherwise it's just a show where they show haggling over very expensive items to be re-sold, it's not really a pawn shop for TV.

I've sold some stuff to pawn shops for quick cash before; I buy stuff from pawn shops. It's not exciting and there's rarely anything truly valuable involved because, as you noted, if you genuinely own valuable stuff you have the resources to sell the item through normal channels yourself, you are not going to take half its value at a pawn shop.

I also want to say that Pawn Stars' TV customer base has become one of two kinds of people:

• Person off the street who thinks their item is worth 10x its actual value
• Person with connections to money or fame or both, who has come into possession of something of great value that they don't really care about getting rid of if it gets them on TV

Both of which are entertaining to watch. There's a reason they don't show workmen borrowing against their tools when jobs are tight, poor people resorting to get something for Grandpa's watch, middlemen who just got some good deals at a rummage sale looking to upsell for a couple bucks -- it's not interesting.

Pawn Stars is a lot more like when people show up with a box of stuff at the antique mall (that I have a booth in) looking to sell right there. They, too, have unreasonable expectations over what their stuff is worth.
posted by AzraelBrown at 7:44 AM on October 22, 2022 [6 favorites]

I guess I didn't answer your title question:

People go to pawn shops for quick cash, very little questions asked. Their primary business is lending money against collateral, usually 10% - 20% of its value. They physically hold onto the collateral, unlike a car loan or your celphone payment plan where they trust you more to keep using the item that's not paid for yet.

So, let's say you lost your job, you need some cash, and you've got a $1000 laptop you can live without for a while.

You go down to the pawn shop, they say they'll lend you $150 for it, which you're going to pay back at $60 a month for the next three months. Now you've got $150 in your pocket to buy groceries but your laptop is on a shelf in the back of the pawn shop. They took your ID mostly to make sure they give the laptop back to the right person when it's paid off, and in case its stolen. They don't care about credit scores or bankruptcies or anything, they've got your laptop.

You manage to scrounge up $60 for the first payment the next month, then you get a job -- you walk in and pay them the remaining $120, get your laptop, and walk out the door happy you had a quick and easy way to buy groceries last month. The pawn shop got $30 profit/interest for their loan, so they've done good business too.
posted by AzraelBrown at 7:53 AM on October 22, 2022 [34 favorites]

Pawn shops have been around longer than Craigslist - they used to be about the only reliable place (outside of a garage sale or a consignment store for really good stuff) to sell things.
posted by The_Vegetables at 8:46 AM on October 22, 2022

I indirectly know one of the "appraisers" that appeared on an episode of Pawn Stars and I'm pretty sure he was asked by the producers to call them when someone came in with an interesting specimen of his trade. So then it looks like this Joe Schmoe walks in off the street to sell something interesting. But it's all set up in advance. The whole "appraisal in front of everyone" as mentioned above is a huge giveaway.
posted by JoeZydeco at 9:44 AM on October 22, 2022 [1 favorite]

Response by poster: Ah okay, I knew there's a large about of theater involved in the production but yeah a construction pawning his drill to make rent or groceries isn't as exciting as an Antique Roadshow style appraisal. In fact I would maybe consider it low-rent Antique Roadshow.
posted by geoff. at 9:55 AM on October 22, 2022 [2 favorites]

While I know it is a television show, do people really bring extremely valuable items to pawn shops like gold bars and Jimi Hendrix guitars?

I always hated this part of the show (well...actually I hated the show, period). The guys coming in with, to use your example, Jimi Hendrix’s guitar, quite obviously know what they have and what it could be worth. And, I’m pretty sure they would know there was no way in hell they would get anything close to actual value for the thing at a pawn shop.

So, why are they there? To get an honest valuation? Maybe. But they all seem to want to sell the thing to the store. All I can imagine is that the provenance of the item might be a wee bit scant or shady? No actual auction house would take it on without verifiable provenance. That said, someone with a legit Jimi Hendrix guitar is going to realize a hell of a lot more profit going through an auction house, than they ever could at a pawn shop.

As for gold bars...I dunno. I’m pretty sure selling a gold bar might be a bit more difficult without there being some sort of government interest? So, you pawn it (i.e. take a loan on it) on the understanding that you never come back for it.
posted by Thorzdad at 9:57 AM on October 22, 2022

when your credit sucks and you need to borrow $500 for two weeks, ya take that one guitar down and make a deal.

"sell or pawn?" is the question. never sell, unless you you are in a serious bind - it's a ripoff. get the loan.

pay it back on time, or else the interest is staggering. and, you lose your shit to the shop after x weeks of non-payment.
posted by j_curiouser at 10:18 AM on October 22, 2022 [2 favorites]

In fact I would maybe consider it low-rent Antique Roadshow.

As a big AR fan, I remember watching the first episode with interest. My takeaway was “This show won’t make it, AR fans will never go for it, they will be aghast at the fat slob guys with their fart jokes and such.” How wrong I was, ah well.
posted by Melismata at 10:41 AM on October 22, 2022

Pawn shops are great. They've been around for a few thousand years, so clearly they are serving a real market. You should check a few real ones out sometime before concluding there's nobody using them or they are a bad idea!

Music gear is a good example of why they are useful for many people who want that stuff. I can go buy a $200 guitar pedal for $50-100, depending on how long it's been there and how scuffed it is. And if I don't like it after a month or year, I can take it right back there and get maybe 70% of what I paid, maybe more if I take store credit! And it works at most any scale, right up to tens of thousands of dollars, if you're in the right shop and market.

So, one big category of pawn shop sellers you're missing is pawn shop shoppers. I've never 'needed' to pawn a family heirloom or anything, but I'll happily swap back stuff I bought there. Also you do get to set the minimum. If you don't like the offer, you walk out the door, and take your thing to the next pawnshop or Craigslist etc.
posted by SaltySalticid at 10:54 AM on October 22, 2022 [3 favorites]

As someone who grew up without a lot of money, and a parent that uhm... had some gambling and overspending tendency, I spent a lot of time in pawn shops (and they all smell the same?) And honestly we want to spend more time in them as adults when it comes to certain items.

And yes, they serve a purpose as someone seeking money, in the process that people showed up thread. Either in the form of a loan or if you need cash at that moment and don't want to deal with the hassle of FB marketplace or other selling stuff. I don't know if you've ever sold things online but it's a HUGE hassle. And there's no guarantee anyone will buy what you're selling. But walking into a shop and walking out with money? Simple.

People have covered that the show is... super fake. If you have something of true value you would probably go through an auction or a consignment situation with a specialty seller.

As a buyer, they often have great options for music gear, camera gear, and when I was a kid there was SO much music! (And I presume there still is?) Records, CDs, Tapes and they were so cheap. And lots and lots of jewelry. Like a thrift store but a better selection since they only buy stuff they know they can sell.
posted by Crystalinne at 12:54 PM on October 22, 2022 [2 favorites]

I love Pawn Stars for the pure entertainment value. The family sits around and laughs at it, and oohs and aahs over the occasional real find. It seems over the last however many years they need appraisals on everything, and the tie-ins to other History Channel shows set in Vegas are ludicrous (we only watch in re-runs, since we don't get History).

Antiques Roadshow is much better, if only because there are no fart jokes or Pawn Stars cast.
posted by lhauser at 1:55 PM on October 22, 2022 [2 favorites]

do people really bring extremely valuable items to pawn shops like gold bars and Jimi Hendrix guitars

I think the thing that you need to also account for is the feeling of "dump it all on the table and it's the pawn shop's problem." Facebook marketplace is work.
posted by corb at 2:04 PM on October 22, 2022 [4 favorites]

I think the thing that you need to also account for is the feeling of "dump it all on the table and it's the pawn shop's problem." Facebook marketplace is work.

This is true for a lot of people. I worked in an investment grade precious metals shop, and we also purchased precious metals for scrap (as well as bought and sold coins). We did not have a pawn license- pawn shops require a lot of onerous paperwork and reporting. We did not retail jewelry or silverware, just bullion and coins. A lot of people came in with jewelry that we told them would fetch more if they shopped it around or put it on an auction site (we only paid melt prices for metal). Some opted out because they wanted quick cash or didn't want the hassle of trying to do all the work of selling. People who have inherited something, or gotten a divorce and just want things out of their sight often are willing to forgo extra money for an end to their involvement with certain items.
posted by oneirodynia at 2:55 PM on October 22, 2022 [4 favorites]

The only time I've ever even been in a pawn shop, much less used one, was to sell a diamond wedding set. I was separated from my husband, with two small kids, and he wasn't paying child support. My job had cut my pay for "cost saving measures" and I was a little desperate.

I took my engagement ring and wedding band (we paid $1500 for them back in the late 80s) to three reputable jewelry shops (one touts itself as paying the highest prices for unwanted jewelry - this was back in the late 90s). The BEST offer, from these highly regarded professional jewelry stores... was $150.

I took the set to a pawn shop. The manager was polite, professional, and offered me $200. It was the best I could do, and I needed whatever I could get.

To this day, I have no interest in ever having a real diamond ever again. You pay all that money for them, for what? But I really appreciate that pawn shop.
posted by annieb at 6:02 PM on October 22, 2022 [9 favorites]

Pawn shops provide short term (30 day) collateralized loans with no dependency on access to credit or banks. They also often offer check cashing for a fee, for unbanked folks.

and yes they have the resale line of business, but loans are the main business. A realistic pawn stars would often have somebody pawning the same guitar they pawned and repaid four times in the past three years.
posted by whisk(e)y neat at 12:32 AM on October 23, 2022 [5 favorites]

do people really bring extremely valuable items to pawn shops like gold bars and Jimi Hendrix guitars?

I live in a not-great part of a city you've almost certainly heard of. The surrounding few miles of me has the highest density of pawn shops in the region of several million people. They are decidedly not getting a lot of valuable items. It's mostly 3-5 year old TVs, tools, and a mix of other electronic detritus. If someone walked in with a gold bar, they'd probably call the cops for fear of entrapment.

In addition to what's been stated already, there's the crime factor. Casual criminals will sell stolen goods to pawn shops directly and organized breaking and entering crews will use intermediaries to do so with goods that aren't worth trying to extract more value from (your new MacBook Pro won't be part of this but your 4 year old iPad will). The pawn shops know what's going on but gamble that between the pittance that they're paying for goods and that most people can't prove that they own that guitar or camera lens or whatever that they can get away with it at a profitable rate.
posted by Candleman at 1:43 AM on October 23, 2022