What Happened to the Pawn Broker?

in Consumer Advocacy, Money, Rant

Many Pawn Brokers are branching out and take gold, but are also being overrun by PayDay Loan storefronts.

These businesses have a simple model: Send us your unused Gold, Platinum and jewelry by mail and we’ll send you what we think is a fair price for it.

Just reading that line suggests something is not right in this model, at least with a Pawnbroker I can go in and find out (to quote Bo Diddley from Trading Places), “… in Philadelphia it’s worth fifty bucks…“, and I can walk out. Yes these businesses do offer a return policy within a set period of time, but it just screams loudly Financial Pornography!

This is a business for whomever is running it. They are aiming to pay you as little as they can, without you saying, “Hey, that’s a rip off”, but typically folks who send in their gold via the mail to get money, more likely than not, don’t know how much gold is in their jewelry and what the approximate value of it might be, thus they have no basis to figure out whether this is a rip off, or a fair exchange.

Given how much advertising I am seeing for the various services like this out there, I guess this is a growing business and the money must be good, but I also wonder how does the receiving business know if the person sending this jewelry actually owns it? I assume there is a form sent which the sender must sign, saying this is their property (for the the lawyers), but what is stopping thieves from using this service? Are various legal services working with these companies to make sure stolen jewelry doesn’t get turned into cash easily? I don’t know.

If anyone has any stories about dealing with this type of service or similar ones, I’d be curious to hear them in the comments section of this post.


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