A pawn shop is a great place to pick up some fast money or find something you need at a lower price than in the store. If you know how to negotiate at a pawn shop, you can get even better deals on what you sell, pawn, or buy. Some pawn shops actually expect you to negotiate prices. Others have strict guidelines that they expect their employees to follow. The bottom line is that it never hurts to try! You don’t risk losing anything and you just might get more in the transaction than you thought. The key to success is to be reasonable in the price you offer or ask.
Pawn shops are businesses and they work to make money like any other kind of business. The difference is that they set their own prices for the items they sell. They also do their own evaluations to determine how much they will give a customer for an item. The wiggle room for your negotiation is in the method they use to arrive at their prices.
Once the pawn shop determines the value of an item, they offer a percentage of that value in the form of payment or a loan to the customer. The range is anywhere from 25% to 80%, depending on whether it is a loan or sale and the unique practices of the specific pawn shop. Also, more desirable items that will move out of the store faster will fetch a higher price.
Negotiate at a Pawn Shop
Selling an Item
Most people who take something to sell at a pawn shop need money for something specific. You may need to pay your credit card bill before they add late charges. Maybe you need to get a repair on your car or have a tooth filled. Whatever the reason, you know how much you need. Before you go into the pawn shop and demand the amount of cash you need, there are a few steps you need to take before you leave home.
- Know What It’s Worth – For starters, even if you bought the item new and it is still in the box, you aren’t going to get the full price you paid. Why? Because that price includes a 100% or more markup from the store you bought it from. You can find almost anything listed on Ebay. Just search for items exactly like those that have already sold on Ebay and compare the price. Never assume that a ‘similar’ product in a different brand or model will be the same. It needs to be identical to the one you want to sell. Look for the sold box on the left side of the page. The “Sold” price isn’t the same as the asking price. It tells you what someone is willing to pay, not what another seller is asking.
- Don’t Expect the Full Value – This goes back to the percentage of the value that the pawn shop pays. Most of the time, the price offered is in the mid-range between 40% and 60% of the Ebay price. It isn’t until after you get an offer that you know if you should negotiate at a pawn shop for a bigger payout. For example, if you find the item sold on Ebay for $100, the pawn shop will probably offer you between $40 and $60. That’s so they can sell it for $100 and still make a good profit. If they offer you between $40 and $50, you know you still have some room to negotiate a reasonable offer. If the pawn shop won’t go all the way to the high end of the range, you can still get more than your original offer.
- Consider the Item’s Condition – Look your item over and see if it is in working order. Don’t assume because it worked when you put it on the top shelf of the closet five years ago that it still is in good condition. Try it out, look over any electrical cords or connections. Make sure all the pieces are there. The pawn shop can’t make money off damaged, outdated, or incomplete items. Neither can you.
- Don’t Try to Get More Than It’s Worth – If you need $200 and take an item worth half that price to the pawn shop, you aren’t going to negotiate a deal. No matter how good your negotiation skills are, it won’t work. At the end of the day, the pawn shop is still a business and they need to make a profit. It’s a long way from going up to the higher end of the value range from paying you a profit that they can never get back. If your item isn’t worth enough to get the money you need, consider taking something else.
- Don’t Expect to Get More for Gold – Some pawn shops purchase gold at scrap prices regardless of whether it is coins, jewelry, or a filling out of someone’s teeth! Others base their prices on the overall value of the item. For example, gold jewelry with diamonds can get you a high price if the diamond is large and good quality. Although gold is one of the most popular items to sell to pawn shops, they aren’t as likely to haggle over the price. Most have firm buying and selling prices that gives you little if any room to negotiate.
Pawning an Item
The pawning process is very similar to the selling one as far as determining the price. Although pawning differs from selling in that your item serves as collateral for a loan, the pawn shop still looks at it as something they might end up selling. If you fail to repay your loan and pick the item up, they will sell it to recoup their money.
Some pawn shops offer more money on the items they buy while others give better prices on pawn loans. Most of the time, they will be at or nearly the same price. It’s really more about the pawn shop and its policies than about the type of transaction you negotiate.
The most important thing to keep in mind when you negotiate at a pawn shop when pawning an item is the payback amount. About 90% to 95% of people pay back their pawn loans. You should decide whether it will make things easier for you now to have cash in hand or if it will be harder to pay back your loan later on.
Buying an Item
Now that you know more about the selling and buying process, you can understand what goes into the pricing of items you can buy. That also means you know how to negotiate an offer that is fair. You wouldn’t want the pawn shop to cheat you. Don’t expect them to give in to your demands and take a loss.
An increasing number of people shop for certain items at pawn shops because they can get like-new items much cheaper than in the stores. Things like laptops and computers, musical instruments, and jewelry are some of the most popular. Sometimes it’s a good way to upgrade to a better model or brand without paying more.
The point is that pawn shops don’t typically sell items that they don’t think will have a big demand in the first place. They know what people want and they make it available to them to boost sales. That doesn’t mean that you should assume you will have to pay top dollar. There is still some room to negotiate at a pawn shop if you go about it in the right way.
- Inspect the Item Carefully – Make sure it is in good shape with no breaks or missing parts. If you find any problems, point them out to the pawn shop clerk. Don’t over-do it by accusing them of selling poor quality items or trying to sound like an expert. Just ask them if they would consider discounting the price due to the damage or missing part. If they offer to knock off $5, ask them if they will make it $10. It’s only five bucks more but it’s also double the discount they already offered.
- Decide If the Price Is Already Fair – Pawn shops try to price items to sell them quickly while still making a profit so the prices are usually already fair. This will give you a good starting place to negotiate. If you believe there is some room to negotiate, offer to pay about 80% of the asking price. If the pawn shop accepts your offer, you get a really good discount. If not, there is a good chance they will give you a counteroffer that is somewhere between your offer and the asking price. If not, just ask them the lowest price they will go to sell it. Sometimes the best way to negotiate at a pawn shop is to get right to the point!
Some people are natural-born hagglers. They love to haggle over prices whether it’s in the local mall or at a yard sale. Others would rather pay more than go through the process. Fortunately, anyone can negotiate at a pawn shop even if they lack natural haggling skills. More people who come into the pawn shop to sell, pawn, or buy items negotiate a better deal. It’s easy because it’s expected and you don’t have anything to lose by trying.
Although you don’t have to be an expert to negotiate, it does help if you keep your temper in check. There is only a certain amount of room to work with on any item before the pawn shop loses money. Don’t get angry when they don’t accept your offer. They would rather make a smaller profit than no profit at all. Negotiation isn’t a game of wits. It’s about getting to the price that is fair for both sides.
Find the Right Pawn Shop
Although your skills as a negotiator don’t matter, finding the right pawn shop does. Some pawn shops sell anything and everything while others specialize in certain types of items. Trying to sell your old saxophone to a pawn shop that primarily deals in jewelry is not the best way to get a good deal. The people who shop with them know the types of items they will find in their store. The store can’t give you top dollar because they have little chance of making the profit they need for their business.
Different pawn shops also have different loan terms, fees, and price scales. Look for a pawn store that gives you more time to pay your pawn loan. This decreases your risk of losing your item and gives you more flexibility in paying the loan when you have the money. You also want a store that charges low fees so you don’t end up getting less than you expected from the deal.
Most importantly, look for a pawn shop that has a good reputation. People tend to do business with the same shops rather than going randomly to different ones. Find out how others feel about their experience and whether they think they got a fair deal.
A lot of information is available online, both on the pawn shop’s website and on independent review sites. Learning the pawn shop’s rates and process on pawns, sales, and purchases before you visit the store will help you know what you have to work with. A pawn shop that offers lower-than-average prices all the time is more likely to offer the best deal than one you have to negotiate with and who expects you to haggle.
Monte De Piedad Mega Pawn & Jewelry has built a reputation for excellent customer service, low prices, and flexible terms. Customers voted Monte De Piedad the “Best Pawn Shop in San Diego” for two years in a row! They already offer the highest loan amounts, longer loan extensions, and easy payment options with no negotiations required. With thirteen stores across San Diego, there is one close to your location. Contact us today to learn more about the MPD Advantage and how it sets Monte De Piedad apart from the competition.