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�x Frequently Asked Questions What is a pawn shop? A pawn shop performs two primary functions: (1) provider of short-term credit to meet customers' immediate cash needs and (2) discount retailer of value-priced merchandise. Who uses pawn shops? The typical credit customer is employed, lives or works within two miles of the store, is of either gender, and occasionally needs short term cash for an unexpected bill such as a medical expense or car repairs. 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 quality 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 quick, 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 �70% of the time). 3. If collaterai is not redeemed within the allowable timeframe, merchandise is sold in an effort to recover lost principal (occurs �30% of the time). How many pawn loan customers redeem their merchandise? On average, 70 percent of all loans are repaid. Pawnbrokers offer non-recourse loans, looking only to the item being pledged 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 credit consequence to the borrower. Unredeemed items are sold in the pawn store, offering value priced quality merchandise to shoppers. What is a typical loan? Typicaily, loans average between $70 and $100, although they can be as small as $20 or as high as several thousand dollars depending on the value of the collateral. Contracts vary from state to state, but the average loan period is 30 days plus a 30 day grace period. .� `