Unscrupulous Rumours

From a forum post:

So far all my gun purchases have been new. I'm not above saving money but I never felt right about pawn shop purchases. Do you trust them? Have you ever been burned in a pawn shop deal? Stolen merchandise? How do you tell a reputable pawn shop?

I buy a lot of guns from pawn shops. Some are dusty with high prices, others are clean and motivated to move merchandise.

There are several things to understand about pawn shops.

First, they are primarily financial institutions. They are lending agencies with a license to protect. They will protect that license to lend money, as it is their livelihood. They are not likely to risk it knowingly selling somebody's stolen second hand stuff. Being a FFL is second to being a financial institution with these guys. They do not have to sell guns. They do not need to sell guns to make a living. They make a living lending money. If they can break even on selling a gun to a fellow they like, they will. They already made their money on the loan in interest. Let them make a bit on the gun too, and you will become a cherished customer. If you treat him with respect and he believes you will return again, there is a fair chance he will sell you the gun for a small profit over what he loaned on it. Treat the pawn broker with disdain, and you will never find a deal there. He doesn't have to sell to you. Remember.......He may have made his money on that gun in interest and having it go in and out of hock. It is not merchandise. It was collateral.

Second, in most states the Sheriff's department has a pawn detail that regularly goes to pawn shops comparing the serial numbers on pawned items, including tools and guns, to lists of items reported stolen. Pawn brokers are pretty adept at spotting a thief. They do not want to loan money on a stolen item and then lose their collateral. If someone walks into a pawn shop with a Fender Telecaster and can't play it, chances are he won't be pawning it either. Pawnbrokers do not work as fences for known thieves. Doing so places their license as a financial/lending institution at risk. Plus they lose their collateral on money they loaned.

Third, pawn shops help people. Let's suppose you need money. Suppose your engine just blew up in your automobile, and you do not have the money it takes to replace or repair it, and you need to get to work so you can go on living. You have no money in the bank. Your friends don't either. You either don't want to go to the bank and take out a loan for the small amount needed, or your credit sucks and you can't. You can take out high interest pay day loans, you can use a high interest credit card, or you can see a pawnbroker.

At the pawnbroker's shop, you can walk in with an item of value, whether it be a firearm, a piece of jewelry, a camera, or whatever. He will appraise it, offer a loan based on that appraisal, and if you accept his offer, you sign a few documents to make certain you understand the deal, and you walk out with cash. That's it.

Pay back the loan at any time, or on schedule with the interest contained in the deal, and you get your property back. It's that simple. On a firearm, yes, you go through NICS.

Now let's suppose you experience a downward turn of fortune, and have a problem paying the loan back. You will not have a black mark on your credit score as a result. Try that with Visa or a pay day loan place. At the pawn shop, you just lose your property if you default on the loan. That's all. You have a clean slate. If it was a family heirloom that you pawned, either you should not have pawned it, you should have paid back the loan, or if neither of those are possible, you have the option of pawning something less precious to you and buying your heirloom back before someone else buys it.

While your property is in pawn, it is kept in a place that is reasonable for it's security, and the pawnbroker is responsible for it's condition. If it's a gun or jewelry, it is kept under a double lock, same as a FFL. Most likely, that entails a walk-in safe. I was surprised to learn how many hunters pawn their favorite rifles in the off season for safe keeping. In August, they pay off the remainder of the loan, take the rifle out of pawn, and go hunting. If it is burned, damaged, or whatever, the pawnbroker's insurance covers it, not the owner's homeowner's insurance. I know construction workers and contractors that do the same with their tools in the off season.

After hurricane Katrina, the pawn shops in my area were hopping for about two years as people who evacuated......... Good people, respectable people, who had a driver's license, a credit card or two and a car full of belongings and family, went about re-establishing their lives. Would the banks loan them money for gas or a hotel room? No way. They had no address any more. Would the cash advance places loan them money for gas or a hotel room? Not without a job. They could, however, walk into a pawn shop along their way to a final destination with a driver's license and a small item of value such as a diamond ring, or a handgun, and leave in 15 minutes with money for gas and a hotel room. If they never came back with their property, and a lot of them did not, it was simply resold. Folks like myself came and purchased the collateral.

Think about this....... The next week could bring any number of us to a situation where we need cash right then. It could be an auto accident, a natural disaster, a death in the family, or even a great deal on a once in a lifetime firearm that we need cash for. Cash right then. You could use the Visa or go to a pay day loan place. Or you could take something to into a pawn shop and learn a new tactic of survival in a declining economy. Your choice.

To decide for yourself whether pawnbrokers are unscrupulous thieves, go here. To read my pawn shopping secrets, go here. To hear the rumours about unscrupulous pawn shops, just go to your local gun store and ask. Then follow the old guy behind the counter, you know, the one with the nice gun collection....... to his favorite pawn shop and watch him check the latest wares on his way home.