The New Jewelry Store: Your Nearest Pawn Shop!

For a small few my title is nothing new, but for the majority of you are thinking that I am crazy. I am crazy, but that isn't important right now because we are talking about jewelry and watches. First let's talk about a pawn shop. What is a pawn shop? A pawnbroker (aka pawn shop) is an individual or business that offers secured loans to the public (pawner) using their personal property used as collateral.

When an item is pawned for a loan (pay-day loan is the normal reason a person will pawn an item) within a certain contractual period of time the pawner (you) may purchase it back for the amount of the loan plus some agreed-upon amount for interest. The amount of time, and rate of interest, is usually governed by the local or state law, but many locations no law exists so it's up to the pawnbroker. If the loan is not paid within the time stated in the contract, your item becomes the pawn brokers property and will be offered for sale to recoup their money. Unlike other lenders, the pawnbroker does not report the defaulted loan on the customer's credit report, since the pawnbroker has physical possession of the item and may recoup the loan value through outright sale of the item. The pawnbroker also may buy your item outright and then they sell it in their store.



You have an idea how a pawn shop works, now how does it become your next jewelry or watch store? These items usually are pawned, refinished to like-new condition and sold lower than anyone else can sell them at because they were pawned at a lower amount.

Here's an example (fictional numbers) You go to a pawn shop and sell your Rolex watch which retails in averaged preowned condition for $5000.00 and retails new for $7000.00 but you only get $800.00 because you need money quick. You can't make the loan payment back. Now the pawn shop owns the watch for $800.00 and refinishes it for an additional $200.00. Now the pawn shop is in the watch for $1000.00 so they want their money back so they sell it for $3000.00 which is $2,000 less than market. The pawn shop makes money, you needed money and the person who purchased the watch now bought it below market value.

With the economic conditions of 2008-2010, thousands upon thousands of people have been pawning their jewelry and watches (among other belongings) just to survive or pad their accounts because they could be the next one waiting in line at the local unemployment office. Not the best thing to happen, but is it? You can now claim merchandise you always wanted for a fraction of the price and the people who pawned it now has money in their pockets.

See what I mean? Deals can be had and even better deals could happen if you're patient enough. And many pawn shops need to liquidate so they are selling items just above their cost to make room for newer items that are coming in.

FACT: Pawn shops have been taken advantage of "cash for gold" by selling their slow moving gold items like necklaces, bracelets and rings for cash because so much jewelry is coming in and they need to make room.

Here's the downside of purchasing items from a pawn shop... there's no warranty and no after-the-sale service. Some items, while tested/ cleaned/ refinished could break and become worthless. Some items may be fake because they were over-looked and the pawn shop didn't do their research. I know this won't happen each time, but it could and/or will happen. In many cases, even shelling out hundreds more for fixing the item, you still saved hundreds compared to the going retail rate. Is it worth it? Sure, but it's your money and your decision to make.