Many people rely on pawn shops as a viable financial solution as they’re more efficient and quicker than bank loans. Further, they don’t impact your credit score!
However, there’s a major stigma around pawnshops and only 45 registered pawn loan shops in New Zealand!
The scarcity and negative perceptions highlight the importance of being more well-informed about potential pitfalls before pawning valuables.
This will help you navigate the pawning landscape much more confidently and get the best deal for your goods. So, be aware of the following mistakes and make the best out of this!
Not researching pawnshops
While pawning valuables, people are often in a hurry and settle for any pawnshop in the vicinity. However, this prevents you from getting the right value against your article. You also run a risk of coming across scammers.
So,if you are in Auckland, for example, make sure you rely only on a highly reputed Auckland pawn broker with decades of experience. A reliable company in New Zealand will have well-trained professionals who’ll gauge the value of your pawned article and offer you cash as soon as possible!
Not knowing the actual value of your item
A major beginner mistake is not checking the actual value of your item. For instance, if you’ll pawn jewellery, get in touch with a jeweller before and get an average estimate for your item. The price of jewellery depends on the metal quality, gemstones, and its overall condition.
Knowing the worth of your item will help you get the fair worth of your item. If you feel the pawn business isn’t offering you a fair price, you can confidently negotiate further.
Not negotiating at all or over-negotiating
If a pawn shop offers too less for your items, don’t accept anything on the first go. You can always insist on a better deal. Tell them if they are offering you too low against your product. Reputable pawn shops can even reconsider your request and evaluate your item all over.
Alternatively, you must also never negotiate excessively. If you push for a too-high price even after they give you their best deal, you risk getting no deal at all.
Understand that a pawn shop has to pay bills and salaries for their employees. If someone doesn’t pay them back, they’ll have to take months to recover that money. So, there’s a limit to negotiations as well.
No pawnbrokers record or pledge ticket
According to the Secondhand Dealers and Pawnbrokers Act 2004, a pawnbroker must maintain a pawnbroker’s record and give you a pledge ticket for pawned goods. The record contains
- Your full name
- Date of birth
- Mention you’re over 18 years of age
- Contact number and address
- Your signature
- The authorized identification form used to verify your identity
- Description of your goods
- Amount of money they lent you
- Interest amount charged
- The total amount you must pay by the end date
- Amount to be paid if repaid earlier
The pledge ticket shows your name, address, and a summary of your rights and pawnbroker’s obligations.
If the pawnbroker doesn’t seek this information or doesn’t give you a ticket, be cautious. All licensed pawnbrokers are bound by law to issue a pledge ticket and maintain pawnbrokers’ records with all significant information, or they’ll be fined up to $10,000!
Ignoring stamps on jewellery
Jewellery comes with a range of stamps on them. For instance, a 925 stamp on silver articles implies the item has 92.5% pure silver. Read up on these stamps to get a better deal and negotiate appropriately.
Not trusting pawn shops
The media has tainted the reputation of pawn shops by showing that they accept stolen goods, have no ethics, don’t return pawned items, or try to offer the least value of your items.
However, these are just poor assumptions and myths that have been long debunked. The industry of pawn shops follows special regulations set by the state of country. This ensures complete transparency in their process and no shady activities.
Having no idea about metal value fluctuation
The market for precious metals (gold, silver, and platinum) always fluctuates. On some days, it’s higher, while lower on other days.
If the market price is high, you’ll get a better price. However, if it is higher on the appraisal day than the day you pawn it, you won’t be able to get the same value. So, make sure you study the market price before heading to the shop!
Conclusion
Before pawning your valuables, make sure you avoid these mistakes at all times. Stay well-informed, look up insider tips, and only seek reliable pawn shops to get the best deals!
