If you’re considering pawning some of your gold jewellery for cash, you’ll need a basic understanding of how pawning works. Here are some few tips from Gold Buyers in Melbourne.
All About Pawning
A pawn broker is a business or person that offers loans in exchange for your personal property. When you pawn an item for a loan there is a certain contractual period during which the pawn broker may redeem the piece for the total amount of the loan plus interest. The rate of interest as well as the period of time is either governed by the pawn shop’s policies or the law, say Gold Buyers in Melbourne.
If you fail to pay the loan or extend it within an agreed amount of time, the pawned item is put up for sale by the broker. The defaulted loan won’t be reported on your credit report.
A pawn broker can also buy items that have been sold outright to them.
The pawning process will begin when you take an item into the pawn shop. Some of the most common items include electronics, jewellery, tools, collectibles and musical instruments. Gold, silver and platinum items are extremely popular and even if the piece is broken and of little value, chances are the pawn broker will take a chance on the item since metal is easy to sell in bulk to bullion dealers. Jewellery has genuine gemstones, even in broken or pieces are missing, also carry a decent value.
While the pawn holder assumes the risk should an item be stolen, there are laws that protect both the broker and community from unknowingly handling such items. It’s up to the pawn broker to establish the seller’s identification via photo ID.
When you take your item into the pawn broker, it will be assessed for its condition as well as its marketability by testing it and carefully examining it for scratches, flaws and any other damage. Something else that affects the item’s marketability is the supply and demand for such a piece. For example, in some markets there is a flooding of car stereos and speakers and in that case the pawn shops will only accept higher-quality brand names.
On the other hand you may have something that’s difficult to sell like a surfboard when you’re inland or snowshoes in a tropical region. Such items will typically be turned down or offered a fairly low price. While some items never really date, like tools, others like electronics quickly become obsolete and impossible to sell. Pawn shops owners need to know about the different makes and models of software, computers and various other electronic equipment so that they can accurately value the items, suggests Gold Buyers Melbourne.
Typically, pawn brokers use different guidebooks, or “blue books” to assess the value of items. They will also make use of Internet search engines, catalogues and their experience. Some pawn brokers even have training in the identification of gems or prefer to employ a jewellery specialist.
One of the biggest risks of dealing with used goods is that the item could well be counterfeit. If that is the case, such as a fake watch for example, the item will only have a fraction of the value of the real deal. Once the pawn broker has determined that the piece is genuine and marketable, he or she will offer the customer a monetary amount for it. The customer can choose to sell the item straight away if the pawn broker is a licensed second hand goods dealer, or the item can be offered as collateral on a loan, advises Gold Buyers in Melbourne.