Hoping to get the true worth of your jewellery at the nearest pawnshop, without a basic understanding of all the legally registered competitors and the market, is too much of a big risk.
Every consumer should never lose sight of the fact that business knows no sentiment. It is your responsibility to ensure that you are equipped with enough data to make the most informed decision.
Over the years, pawnshops have served many as a convenient means of getting a quick loan without the hassle of filling too many forms. One’s credit history does not even come into question.
But the unpredictable fluctuation in the price of gold is just another reason to ensure that you are very informed so that you can receive the best price for your jewelry, even in a financial crunch.
The pawnbrokers are not the only ones that are affected by the falling prices. A wide cross-section of the commercial industry has complained about the economic strain falling gold prices have placed on some businesses to maintain its profitability, while they struggle to avoid huge losses.
Julian Jessup, head of commodities research at Capital Economics in London, England said that he expects that gold prices would stabilize soon. Jessup said, “Our gut feeling is that gold probably will find a floor fairly soon. A lot of the factors that have undermined it recently are probably a bit overdone. But, equally, we don’t expect it to return to anywhere near the highs where it has been over the past few years because that was very much pricing in the prospect of a worst case with a global hyperinflation or the possibility of a complete breakdown of the financial system and I think those fears have passed, too.”
With those thoughts in mind, before you hurry to pawn, here are a few things you should ponder.
Worth: Sadly, most people do not know what their gold is worth. In this case, it is advised that before you carry your jewelry to a nearby pawnshop in a hurry, get it weighed at a reputable jewelry store to ascertain its karat and the value. This gives you an idea of what you can take from the pawnshop of your choice.
Hesitate to settle: If you have the time, check with other pawnshops. Rarely will you find pawnshops offering the same price. So ensure you take some time to find the best possible offers for your jewelry.
Interest rate and hidden fees: Even though you may have secured a good price for your valuable jewelry, you must also be wary of high interest rates and hidden fees. Consumers often complain of facing this situation. In some cases, the interest rate might be low, but there are hidden fees for storage. So ensure you ask before falling prey to the guise of a flashy price for your jewelry.
History: Don’t be afraid to ask these businesses how long they have been in the industry and if they have other locations. It is important to ensure you are not being swindled by a fly-by-night entity. If they suddenly close shop, it would be almost impossible to retrieve your jewelry. It is advised that you pawn your prized possessions with reputable businesses that have been established for several years and have a relationship with people in the community. If possible, seek a company that has multiple locations as this is often an indication of financial stability.
Insurance: It is important to ensure that whichever pawnshop you select is insured. This protects your jewelry in the case of burglary, fire, or if it simply goes missing. Only a fully-insured pawnshop guarantees a patron the ability to receive payment for an item if something happens to it. A written statement of the pawnshop’s insurance policy should appear on the paperwork you’re given when you sign.
Paperwork: Although pawnshop laws vary in several ways, it is almost standard for all to require some form of identification. If a shop doesn’t ask you for identification or request that you fill out the proper paperwork, these are red flags that the shop might not be reputable. You’re supposed to get a copy of all the documentation they require, as well as a detailed description of the items you pawned and their value.
Maximum value: Be wary of a shop that is trying to encourage you to take out the maximum you need. If you only need $20,000, but the pawnbroker is pushing you to take out $50,000, then all he/she wants is to collect additional interest payments from you. If you take out more than you need, it’s easier to default. Some pawnshops are looking to bury you in debt so you can’t come back to retrieve your item. If possible, look for a pawnshop that keeps up with current gold and silver prices.
Notifications: It is understandable that some people forget payment due dates. It happens to the best of us. So find out if your pawnshop extends the courtesy of calling to remind you of your deadline.