All too often, when people think of pawn shops, they think of a stereotype they saw in a movie one time. We all tend to associate businesses we don’t know with what we see in the media. Unfortunately, these portrayals are not always accurate. The pawn industry today is a vibrant business community, with many services to fit a variety of customers – even the wealthy.
The pawn industry has a rich history and has gone through many changes through time. Though the pawn industry did not always look exactly as it does now, lending money based on collateral has been one of the most important businesses throughout time. People who needed to get cash fast could do so in exchange for an item of value. Still, it wasn’t until 1785 that pawnbrokers were required to have a license (a fun fact for a future trivia night). This served to make the business more reliable for prospective buyers. Since then, the industry has only improved.
Today there are more than 12,000 pawn shops in the U.S. alone. They operate on much the same model as pawn brokers have since inception. Whenever someone needed access to cash quickly, they could sell an item with the intention to buy it back plus a small amount of interest. If the person is uninterested or unwilling to buy the item back, the pawnbroker then has the right to sell the item to another customer.
During the Great Depression, pawn brokers were some of the only places families could access cash. While many banks failed, the pawn industry provided people with money they desperately needed. This continues today. Many Americans don’t have access to banks or the time to fill out the lengthy paperwork required for personal loans. The pawn industry fills this need by providing millions of Americans access to cash at reasonable rates and terms.
Pawn loans are held to high standards and are required to be upfront about the terms and conditions of their loans. The National Pawnbrokers Association, established in 1988, serves to further regulate the industry. In fact, each pawned item is registered and documented to prevent the sale of stolen items. This helps to ensure that characters with less than positive intentions take their business elsewhere. Due to this registry, it’s common that pawnbrokers often know the history of the items in their shops, whether they are antiques, electronics or jewelry. Over the years, the pawn industry has become increasingly mainstream and continues to provide a solid alternative to traditional personal loans.