Should you go to Pawn Stores?

One of my favourite pieces of jewelry is a pair of earrings that I was given by my father long ago. They are gold earrings and I loved them not only because they were expensive but also because I felt sentimentally attached.

Years have passed and I still have those earrings as a testament to my affection for the gift.  If they were appraised now they would have perhaps not as much value as when they were bought but I could never part with them.

What though if you had an item which you treasured and it was able to assist you in getting a loan?

That is the premise of how pawn stores make a profit.

They loan money for a short term usually a few days and the customers leave items as collateral for the loan.

If the loan is not repaid within a specified time period, then the customer can not reclaim the item and it is resold to recover the money.

Pawn Stores in Jamaica

These stores have been popular in The United States of America for several years.  There have even been reality television shows about the operators of these stores sifting through the items brought in by customers as they decide if they want to buy it or not.

I visited a pawn store in Florida a few years ago and the operators stayed behind a glass partition. The customer had to pass the item through a window for the appraisal and all items on sale were also kept behind lock and key.

I also noticed that the prices seemed a bit high for some of the items but of course they make a profit selling other person’s treasured items and the cost of the loan has to be balanced with the profit they can make if they sell the pawned item.

In Jamaica, we have a number of pawn stores in Kingston and Montego Bay.   They count on customers returning to reclaim their property by paying off their loans.

Benefits

Not everyone who needs a loan is qualified to access those services offered at a bank or credit union.  These persons might not have steady employment and be considered a poor risk for a loan.

However, if they have treasured items and are able to secure some funds then they can have access to a loan in a relatively short period of time.

A word of caution though, loans have to be repaid in interest so customers would have paid interest ranging from 10 per cent to 25 per cent, depending on the length of the loan.

Pawn stores can play a role in helping those who would not otherwise qualify for a loan but it is not to be entered into lightly.

So what’s your take? Let me hear from you!

Teri Ann Renee Paisley

Gleaner online writer

Tags: pawn stores