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Frequently Asked Questions What is a pawn 5 t ? A pawn shop performs two primary functions: (1) provid�er of short-term cred�it to mee) customers" immediate cash need�s and (2) d�iscount retailer of value-priced� merchandise. Who uses, pawn s,hop s,? The typical cred�it customer is employed�, lives or works within two miles of the store, is o either gender, and occasionally need�s short term cash for an unexpected bill such as meal expense or car repairs. I The typical retail customer is a bargain hunter., either by need or desire, and comes from all walks of life., looking for great buys on jewelry., musical instruments., electronics., and other items. Savvy shoppers know that pawn shops have a steady supply of q�uality merchandise at prices often far below retail value. Most pawnshop customers are repeat customers. What differentiates, a pawn shop from a traditional retail store? Mainly price--pawn shops offer merchandise at prices typically 30% to 50% below retail. Why would someone go to a pawn shop to get a loan? Traditional lending institutions are unable to meet the customer's credit needs due to the bureaucracy., timing and cost of associated with the credit evaluation process. Pawn shops offer consumers a +wick., convenient and confidential way to borrow money., with no credit check or legal consequences if the loan is not repaid. How does, a pawn loan work? 1. A consumer offers personal property as collateral for short-term credit equal to a mutually agree-upon dollar amount and receives funds immediately. 2. Consumer repays loan and redeems item (occurs rv70% of the time). I If collateral is not red�eemed� within the allowable timeframe., merchandise is sold in an effort to recover lost principal (occurs rv30% of the time). How many pawn loan c�us,tomers, redeem their merchandise? On average., 70 percent of all loans are repaid�. Pawnbrokers offer non-recourse loans., looking only to the item being pled�ged� to recover their investment if the borrower chooses not to repay the loan. It is solely the choice of the customer whether he/she elects to repay the loan. If the customer elects not to redeem his or her collateral., there is no cred�i� conseq�uence to the borrower. Unred�eemed� items are sold in the pawn store., offering value priced q�uality merchand�ise to shoppers. What is a typicall loan? Typically, loans average between $70 and $100., although they can be as small as $20 or as high as several thousand d�ollars d�epend�ing on the value of the collateral. Contracts vary from state to state, but the average loan period is 30 d�ays plus a 30 d�ay grace period�.