Pawning Vs. Selling: What is the Real Difference?

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Many people mistakenly think that if they decide to use the services of a pawn shop they are selling their personal belongings. This is inaccurate. Pawning is defined as: Something given as security for a loan; a pledge or guaranty. So what really is the difference between selling and pawning?

First, when someone decides to sell an item, they find a buyer and the two parties come to terms on a price. A transaction is made and ownership of the item is transferred to the purchasing individual. Pawning, on the other hand, works differently. When someone decides to pawn an item, they take their belonging and use it to obtain a loan. The item becomes collateral for that loan. The ultimate sale of that item only happens if the owner cannot repay the loan.

When looking at pawning and selling, there is another large difference. Usually, a pawn shop will pay more for an item than a straight out buyer will. This is because pawn shops have accompanying fees and interest. So, when you add in the money that the pawn shop will be making there, the difference is not highly significant. However, it is something to be considered.

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Another difference in pawning and selling is the ease at which a transaction occurs. Though pawn shops have the right to choose whatever items they wish, they are usually easier to enter into a transaction with then simply attempting to sell an item on your own.

Lastly, pawn shop transactions are regulated by the government. This can be beneficial to an individual that is pawning their items because they know that there are laws that protect them. It is also good for the pawn shop for the exact same reason. When someone puts an item up for sale personally, they can find themselves in some sticky situations. Everything from faulty goods, Scary Craigslist transactions to disputes in price can occur and it can become a case of he said, she said.

Ultimately, a person needs to decide what avenue is best for them when it comes to selling verses pawning. Some people feel that it is better to just outright sell their belongings and avoid any fees or interest associated with pawn shops. For others, who maybe are not ready to part with an item, a pawn shop is the way to go. In the end, it is up to you to decide!

Check out this link to the National Pawn Broker Assoociation for a list of Federal Laws that regulate the Pawn industry

 

As Always Garden City Exchange will make the Highest and Best Cash offer we possibly can on each and every item that comes into our store. Don’t Hesitate to call or Text us anytime if you have something to sell or Pawn!
Call:  734-525-0777   |   Text: 313-215-6986

 

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