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Pawn Shop Information
Auxiliary operations[edit]While the main business activities of a pawnshop are lending money for interest based on valuable items that customers bring in, some pawnshops also undertake other business activities, such as selling brand-new retail items that are in demand in the neighborhood of the store. Depending on where a pawnshop is located, these other retail items may range from musical instruments to firearms. Some pawnbrokers also sell brand-new self-defense items such as pepper spray or stun guns. Many pawnshops will also trade used items, as long as the transaction turns a profit for pawn shop. In cases where the pawnshop buys items outright, the money is not a loan; it is a straight payment for the item. Some pawnshops may keep a few unusual, high value items on display to capture the interests of passersby, such as a vintage Harley Davidson motorcycle; the owner is not typically expecting to sell these items. Other activities carried out by pawnshops are financial services including fee-based check cashing, payday loans, vehicle title or house title loans, and currency exchange services.
Internet pawnshops[edit]In 2009 Todd Hills innovated the move of pawnshops online, launching Pawngo, an Internet pawn company. Estimates are given online with a description of an item, and items are shipped to the pawnshop via post before the money is deposited in a client's account. Other internet based pawnshops include: iPawn.com, Pawntique.com, and PawnUp.com. Sarah Max of Time Magazine wrote of Internet pawnshops that, "Loans are typically made for 80% of an item’s current market value, and interest rates range from 4% to 8% per month depending on the item. That works out to a whopping 48% to 96% per year, which is high even compared to credit cards."[1]
The National Pawnbrokers Association does not allow membership for purely online pawn brokerages, only allowing membership for online pawn brokers with brick and mortar headquarters that are open to the public, and which only provide loans to individuals in states where the brick and mortar business is located. This is done in order to discourage online pawn brokerages from using offshore accounts or laxer state lending laws in one state to circumvent the laws of another.[2]
Upscale pawnshops[edit]Upscale pawnshops began to appear in the early 20th century, often referred to as "loan offices", since the term “pawn shop” had a very negative historical reputation at this point.[3]Some of these so-called loan offices are even located in the upper floors of office buildings. The modern euphemism for the upscale pawn shop is the "high-end collateral lender",[4]lending to upper-class often white-collar individuals, including doctors, lawyers and bankers, as well as more colorful individuals like high-rolling gamblers.[5] They are also interchangeably called "upscale pawnshops" and "high-end pawnshops" due to their acceptance of higher value merchandise in exchange for short-term loans. These objects can include wine collections, jewelry, large diamonds, fine art, cars, and unique memorabilia. Examples of upscale pawnshops include Beverly Loan Company, Borro,[6][7] iPawn.com,[8]Boomerang Lending,[9] and Biltmore Loan and Jewelry. Loans are often sought to deal with business revenue shortfalls and other expensive fiscal issues.[10] Upscale pawnshops have also been featured in reality television. The Discovery Channel television show Final Offer has been cohosted by upscale pawnshop owner Jordan Tabach-Bank of Beverly Loan Company since 2012.[11]
Internet pawnshops[edit]In 2009 Todd Hills innovated the move of pawnshops online, launching Pawngo, an Internet pawn company. Estimates are given online with a description of an item, and items are shipped to the pawnshop via post before the money is deposited in a client's account. Other internet based pawnshops include: iPawn.com, Pawntique.com, and PawnUp.com. Sarah Max of Time Magazine wrote of Internet pawnshops that, "Loans are typically made for 80% of an item’s current market value, and interest rates range from 4% to 8% per month depending on the item. That works out to a whopping 48% to 96% per year, which is high even compared to credit cards."[1]
The National Pawnbrokers Association does not allow membership for purely online pawn brokerages, only allowing membership for online pawn brokers with brick and mortar headquarters that are open to the public, and which only provide loans to individuals in states where the brick and mortar business is located. This is done in order to discourage online pawn brokerages from using offshore accounts or laxer state lending laws in one state to circumvent the laws of another.[2]
Upscale pawnshops[edit]Upscale pawnshops began to appear in the early 20th century, often referred to as "loan offices", since the term “pawn shop” had a very negative historical reputation at this point.[3]Some of these so-called loan offices are even located in the upper floors of office buildings. The modern euphemism for the upscale pawn shop is the "high-end collateral lender",[4]lending to upper-class often white-collar individuals, including doctors, lawyers and bankers, as well as more colorful individuals like high-rolling gamblers.[5] They are also interchangeably called "upscale pawnshops" and "high-end pawnshops" due to their acceptance of higher value merchandise in exchange for short-term loans. These objects can include wine collections, jewelry, large diamonds, fine art, cars, and unique memorabilia. Examples of upscale pawnshops include Beverly Loan Company, Borro,[6][7] iPawn.com,[8]Boomerang Lending,[9] and Biltmore Loan and Jewelry. Loans are often sought to deal with business revenue shortfalls and other expensive fiscal issues.[10] Upscale pawnshops have also been featured in reality television. The Discovery Channel television show Final Offer has been cohosted by upscale pawnshop owner Jordan Tabach-Bank of Beverly Loan Company since 2012.[11]
Pawn Key West
In the west, pawnbroking existed in the Ancient Greek and Roman Empires. Most contemporary Western law on the subject is derived from the Roman jurisprudence. As the empire spread its culture, pawnbroking went with it. Likewise, in the East, the business model existed in China 3000 years ago[12] no different than today, through the ages strictly regulated by Imperial or other authorities.
Modern pawnbroker storefront.
In spite of early Roman Catholic Church prohibitions against charging interest on loans, there is some evidence that the Franciscanswere permitted to begin the practice as an aid to the poor.[citation needed] Pawnbrokerage arrived in England with William the Conqueror. In 1338, Edward III pawned his jewels to raise money for his war with France. King Henry V did much the same in 1415. The Lombards were not a popular class, and Henry VII harried them a good deal. In 1603 an Act against Brokers was passed and remained on the statute-book until 1872. It was aimed at the many counterfeit brokers in London. This type of broker was evidently regarded as a fence.Queen Isabella of Spain pawned her jewelry to finance Christopher Columbus's first voyage to the New World.[citation needed]
Provident Loan Society of New York, a charitable pawnbroker
Crusaders, predominantly in France, brokered their land holdings to monasteries and diocese for funds to supply, outfit, and transport their armies to the Holy Land. Instead of outright repayment the Church reaped a certain amount of crop returns for a certain amount of seasons, which could additionally be re-exchanged in a type of equity.
A pawnbroker can also be a charity. In 1450, Barnaba Manassei, a Franciscan monk, began the Monte di Pietà movement in Perugia, Italy. It provided financial assistance in the form of no-interest loans secured with pawned items. Instead of interest, the Monte di Pietà urged borrowers to make donations to the Church. It spread through Italy, then to other parts of Europe. The first Monte de Piedad organization in Spain was founded in Madrid, and from there the idea was transferred to New Spain by Pedro Romero de Terreros, the Count of Santa Maria de Regla[13] and Knight of Calatrava.[14] The Nacional Monte de Piedad is a charitable institution and pawn shop whose main office is located just off the Zocalo, or main plaza of Mexico City. It was established between 1774 and 1777 by Pedro Romero de Terreros as part of a movement to provide interest-free or low-interest loans to the poor. It was recognized as a national charity in 1927 by the Mexican government.[14] Today it is a fast-growing institution with over 152 branches all over Mexico and with plans to open a branch in every Mexican city.[15] The economic downturn of 2008 saw the advent of the online pawnbrokers.[16]
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Modern pawnbroker storefront.
In spite of early Roman Catholic Church prohibitions against charging interest on loans, there is some evidence that the Franciscanswere permitted to begin the practice as an aid to the poor.[citation needed] Pawnbrokerage arrived in England with William the Conqueror. In 1338, Edward III pawned his jewels to raise money for his war with France. King Henry V did much the same in 1415. The Lombards were not a popular class, and Henry VII harried them a good deal. In 1603 an Act against Brokers was passed and remained on the statute-book until 1872. It was aimed at the many counterfeit brokers in London. This type of broker was evidently regarded as a fence.Queen Isabella of Spain pawned her jewelry to finance Christopher Columbus's first voyage to the New World.[citation needed]
Provident Loan Society of New York, a charitable pawnbroker
Crusaders, predominantly in France, brokered their land holdings to monasteries and diocese for funds to supply, outfit, and transport their armies to the Holy Land. Instead of outright repayment the Church reaped a certain amount of crop returns for a certain amount of seasons, which could additionally be re-exchanged in a type of equity.
A pawnbroker can also be a charity. In 1450, Barnaba Manassei, a Franciscan monk, began the Monte di Pietà movement in Perugia, Italy. It provided financial assistance in the form of no-interest loans secured with pawned items. Instead of interest, the Monte di Pietà urged borrowers to make donations to the Church. It spread through Italy, then to other parts of Europe. The first Monte de Piedad organization in Spain was founded in Madrid, and from there the idea was transferred to New Spain by Pedro Romero de Terreros, the Count of Santa Maria de Regla[13] and Knight of Calatrava.[14] The Nacional Monte de Piedad is a charitable institution and pawn shop whose main office is located just off the Zocalo, or main plaza of Mexico City. It was established between 1774 and 1777 by Pedro Romero de Terreros as part of a movement to provide interest-free or low-interest loans to the poor. It was recognized as a national charity in 1927 by the Mexican government.[14] Today it is a fast-growing institution with over 152 branches all over Mexico and with plans to open a branch in every Mexican city.[15] The economic downturn of 2008 saw the advent of the online pawnbrokers.[16]
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