Many people use pawn shops to obtain quick cash loans for a variety of purposes. According to Statista, the United States has more than 11,000 pawn shops that generate more than $14 billion in annual revenue. You might wonder what happens when items are pawned, so let’s take a closer look.
Items Remain Stored
When you pawn an item, you enter into a contractual agreement with the pawn shop; they loan you money that is secured with your pawned items. The items are collateral, and the pawn shop stores them for the length of the contract. If you don’t collect them when the contract expires by repaying the loan plus any fees and interest, the shop owns them. The contract might indicate a grace period during which you still can pay off the loan and reclaim the pawned items.
Interest Grows Over Time
All pawn shops make their money by either charging and collecting interest on loans or by buying and selling items for a profit. The pawn contract will tell you how much the interest is on the loan and when it grows from month to month. It also will tell you the duration of the loan, which might be 30, 60, or 90 days. Some might even extend the loan period longer, which you also can do by paying off some of the interest. The sooner you pay off the loan, though, the less you will pay in interest.
Unclaimed Items Are Held for a Grace Period
When someone pawns items and does not come back for them, they become the pawn broker’s property. Many will hold onto them for a month before putting them up for sale, which gives the owners a grace period to pay off the loan and interest to regain them. It also gives the pawnbroker the chance to run the items against a database of stolen goods to better ensure they were not stolen.
Items Go for Sale
Once everything clears after the former owner reclaimed them, those items go on sale. The selling price usually is significantly higher than what the pawnbroker paid out in loans or to buy them from random sellers. Virtually all items listed for sale in a pawn shop either were pawned and unclaimed or the shop bought them instead of loaning money.
You can call or visit us to learn more about Florida Cash Inc! We’re one of the top pawn shops for a reason, and we’re always here to answer all your questions.