If you've never visited a pawn shop in Philadelphia than you are missing out! There are all sorts of items, in random quantities and levels of wear, that are for sale at discount prices. There is a lot more happening at a pawn shop than you'd be aware of though, and it's worth your while to know a little bit more about how a pawnshop works. There are 3 major transactions that happen at a pawn shop.
The first is where the term "pawn" actually comes from. People can use a pawn shop to obtain a small loan, with very specific conditions on the loan. A loan from a pawn shop is a secured loan, meaning there is an item or asset attached to the loan that represents collateral. A home loan, for example, is secured because if you don't make your payments, the bank takes the home back. The house is the collateral. An auto loan is the same thing. A credit card however is an unsecured loan. Meaning, if you default on your credit card, there is no item of collateral to take back, so instead the credit card company tries to harass you into paying.
A pawn shop uses secured loans. So what is the collateral? It's whatever you are willing to bring in and pawn. If you are hurting for a bit of cash and need it fast, you can take an item of significant value to the pawn shop and they will give you a 30 day loan on the item. They will hold onto the item for 30 days, and you have 30 days to repay the loan plus interest. So you take in a camera or TV or other item of significant value, and they will give you money for it. If you don't pay your loan back in 30 days, the pawn shop will then claim the item and put it out on the sales floor to be sold.
That brings us to the second way that pawn shops make their income. That is through selling items which were never reclaimed. That is why there is such a random assortment of things at a pawnshop. Typically you'll find instruments, guitars, violins, etc. You'll also find electronic devices like cameras and equipment. Often there are hardware tools and even jewelry. These are all very common items that people will pawn. You never know what you will find at a pawn shop and they are usually items of significant value because people were wanting to trade them in for a loan.
The third way that pawn shops operate is by allowing people to bring in used items and sell them. The pawn shop will often acquire items that aren't through a loan, but a donation or other arrangement. These items can be sold.
Pawn shops will operate under different guidelines from state to state. They have to follow state laws which are very specific. This is because a pawn shop is an easy "fence" for stolen items. If someone stole a car stereo and wants to get rid of it fast for cash, the easiest way is to pawn it. So, there are many states which require pawn shops to report all items that are pawned on a regular basis. Serial numbers can be run and checked to catch any stolen merchandise and return them to the person who was robbed. This hopefully will slow down the amount of stolen items which end up at a pawn shop, but it's always a good idea for the pawn shop to double check everything that comes through the door. Additional info can be found here.
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