ShareThisPAWN SHOPS AT A GLANCE
The model: Pawnshops offer secured loans to individuals who put up personal belongings as collateral. Pawnbrokers also buy items from a seller for a mutually agreed upon price.
Pawn trivia I: The origin of the word pawn is from the Latin pignus, meaning pledge. The pawn business model dates back centuries, to ancient Greece and China.
Loan terms: Terms vary by shop and location, with many states mandating specific terms. Typically, a pawnbroker loans out cash for a pawned item, which can be reclaimed by the owner within three to four months, provided the loan recipient repays the loan, with interest. Interest usually varies by loan amount. If an owner does not reclaim a pawned item the pawnbroker can legally claim the item and offer it up for sale.
Soft default: Failure to pay back a loan to a pawnbroker does not go on a customer's credit report, since the pawnbroker assumed risks and can reclaim value through an in-store sale.
Market forces: Pawnbrokers rarely, if ever, offer collector or retail prices to a seller, due to the age and use of for-sale items and the pawnbroker's cost of restoring and packaging the items for sale in the shop. Likewise, once- pricey electronic items will fetch less money at a pawnshop if the technology associated with the items has evolved significantly.
Pawn trivia II: Historians point to multiple origins of the classic pawnshop symbol -- three spheres suspended from a bar. Many center on the Medici family of Florence, Italy. The Medici Bank was Europe's largest in the 15th century, and some historians note that three spheres were part of the Medici family coat of arms. Other historians say medieval merchants displayed the symbol in the prosperous North Italy region of Lombardy. "Lombard" was synonymous with "pawnshop" in the Middle Ages.
Star power: The general reputation of pawnshops has been further boosted by the popular History Channel show "Pawn Stars." Started in July 2009, the series profiling business at the family-owned Gold and Silver Pawn Shop in Las Vegas quickly became the cable network's highest-rated show.
More information: National Pawnbrokers Association at (817) 337-8830 or www.nationalpawnbrokers.org.
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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