How Do Pawn Shops Determine Value? (2024)

Pawn shops see a wide variety of used items, and pawn brokers need to consider a wider range of factors when determining value. The appraisal takes into account the condition of the item, and sometimes even the circ*mstances of the seller. Although in-house and third-party experts are frequently consulted, pawnbrokers typically depend upon online resources and "blue book" databases for a general idea of current market value for most items. Knowing what is worth pawning using sites like UsedPrice.com can help you determine which of your personal possessions are valuable if you're cash strapped or in need of a short-term loan.

General Merchandise

Non-specialized pawn shops regularly deal in a vast range of items, including consumer electronics, antiques, specialized tools, jewelry, watches, musical instruments, sporting goods and media such as DVDs or video game discs. Each type of merchandise has unique considerations, but all items have a current market value. To this base amount, the pawn broker will fine-tune his assessment based on the condition of the item, including details such as included packaging and accessories.

According to Alexander's Jewelry & Loan, online websites like Amazon are researched to get an idea of pricing. Pawn brokers also consider ongoing economic trends and future projections when deciding how much a pawnship gives you. Items that are valuable but unpopular may not interest a pawn broker sitting on a large inventory.

Value Databases

In the pre-Internet era, the pawn shop owner relied heavily on regularly published volumes of "blue books," which provide baseline resale values for nearly any item. In the 21st Century, databases such as the Orion Blue Book are more efficiently updated and accessed online. However, pawn brokers today are no longer limited to widely used blue book prices, and they often look elsewhere to verify market value.

Some of the major pawn shop chains have developed their own internal databases to assist employees in providing assessments. Hammon Super Pawn, for example, has an internal proprietary pricing system that provides guidelines on how to judge the condition of the items and set consistent prices. Pawn shops are also likely to consult related auctions on eBay or local Craigslist ads to get an idea of current market value for used items.

Gold and Jewelry

Pawn shops do considerable business in jewelry and precious metals, and are likely to have an owner or employee with specific expertise. How much a pawnshop gives you depends on the cut and clarity of diamonds, as well as the carat weight of gems and gold. They will be aware of the "melt price" of gold and silver (the base value of the metal apart from its current form), frequently staying abreast of the changes from day to day, or even throughout the day. Although pawn shops do not generally establish a fixed minimum value on any item, they'll often use a percentage as a baseline for determining the value of gold. GoldCalc.com suggests that pawn shops generally pay a melt value of 70 to 85 percent of current precious metal prices.

Markup and Profits

The anticipated markup of an item is an important factor in determining how much the pawnshop is willing to pay. Popular items in short supply that sell quickly can have a higher markup. Like all businesses, pawnshops need to turn a profit. According to the Hustle, the profit margin target for large pawnshop chains is about 38 percent, while small businesses sometimes charge around 50 perecent.

Specialities and Experts

Although most pawn shop owners need to have some familiarity with the value of a wide range of items, some shops focus on certain kinds of merchandise. Gold and jewelry is by far the most common specialization, but pawn shops that buy and sell firearms tend to require more focused expertise (as well as rigorous compliance with stringent local, state and federal laws). Pawn brokers will also sometimes call in an expert in a specific field, such as classic cars, antiques or collectibles. These third-party appraisers may be more qualified to assess the item, or at least to offer an informed opinion to influence the pawn shop's assessment.

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