Pawn vs Sell: What’s the Difference? Explained

Strapped for cash? Looking to declutter and make some money in the process? If you have an item in demand at a pawn shop near you, you may be in luck! In this article, we explain the difference between pawning your items at a pawn shop and selling your items to a pawn shop. Wondering which option will make you more money? Keep reading to find out how each option works and which one might be best for you.

The Difference Between Pawn and Sell

When looking to get rid of your stuff in exchange for some cash at a pawn shop, you have two different options: selling or pawning.

Selling Your Items

Selling your items to a pawn shop is a simple process. Just bring your item in to show the pawnbroker; if they are interested in your item you can move on to deciding on a price. The two of you will have to come to an agreement on your payment but keep in mind, the pawnbroker has more pull. Once the price is set, the pawnbroker will pay you in cash and you will leave your item at the pawn shop. The transaction is then complete!

Pawning Your Items

Pawning your items is more like taking out a loan with a pawnshop, using your item as collateral. Start the process by bringing your item into the pawn shop; if the pawnbroker believes they can resell your item for a profit, they will take your item and give you cash. Again, this is isn’t a simple payment but rather a loan. The pawn shop will keep your item in storage for a set amount of time, generally a few months. This is the amount of time you have to come back and get your item. In order to get your item back, you’ll have to pay back the loan in full plus interest. Interest rates vary from store to store, but 10% per month is a common rate. If you don’t pay off the loan and interest before time is up, the pawn shop can then sell your item. Once your item is sold, you no longer have to pay back the loan.

Pawn vs. Sell: Which Makes More?

Selling and pawning work pretty differently and while selling your items is more simple, it might not be the best option for you. Keep reading to learn the pros and cons of both options and which will make you more money in the long run.

Selling

If you have an item that you can easily part with, selling may be your best option for quick cash because it is so simple. You can walk into the pawn shop with an item you don’t want and walk out with your cash — no strings attached. If a pawn shop is struggling, it may give you more money for selling. This is because it will be able to sell your item right away and make a profit sooner than if it had to hold it for several months during a loan period.

There aren’t many cons to selling your item. That said, if you have a sentimental attachment to it, selling shouldn’t be your first option as you don’t have the option of getting it back. Also, you might make slightly less if you sell your item rather than pawning it. This is because the seller has to consider whether or not they will be able to sell the item and make a profit.

Pawning

Pawning may be the best option if you need money immediately but can’t simply part with your item because of its sentimental value. If you believe you will be able to pay off your pawn loan before your item sells, all is well! On the other hand, if you can’t pay back the loan, your credit score won’t suffer, which is obviously not the case with a traditional loan. Oftentimes, pawning your items will get you more money upfront than selling your items (of course, once you pay it back, you’ll be back to zero, or less). The National Pawnbrokers Association reports that 85% of loans are repaid. That said, pawnbrokers are fairly confident they will get their cash back within a few months plus interest and therefore will not be as concerned with reselling the item.

The obvious consequence to pawning your item is that you may not get it back. Also, even if you are able to pay back your loan and get your item back, you will lose money because you have to pay interest on the loan. Because of interest charges, you’ll usually end up making less money if you pawn, rather than sell, your item.

Which Makes More?

Sources including Best Collateral, a San Francisco Pawn shop, report you will get more money from selling your items to a pawn shop because it allows the pawn shop to sell the item right away, thus making a profit quicker.

On the other hand, others report that you will get more money from pawning your items because the pawnbroker will not be as concerned with selling the item. Most people pay back their loans plus interest so the pawnbroker will likely get their money back and then some with little effort made.

That said, which option will make you more money will depend on what pawn shop you choose, what position they’re in financially, and what your item is. Some pawn shops specialize in certain items, and you’ll be best off going to them if you have what they specialize in — other pawn shops might not even give you an offer. To get the best price, try going to a few different shops to ask for quotes for selling and pawning your item.

How Much Money You Can Get For Your Items

You can expect pawn shops to offer 40 to 60% of the retail value of your item on average, but specific offers vary widely. You may be able to get a good idea of what your item is worth by looking at similar items on Craigslist or eBay; this is how many pawnbrokers determine the value of an item they are unfamiliar with. Keep in mind, if an item is considered unique or rare, that will boost the resell value. To find out what items sell well at pawn shops and how much you may be able to get for them, check out our article, What Do Pawn Shops Buy? The List + the Price Range You Can Expect.

In Summary

When looking to exchange an item for some cash at a pawn shop, you have two different options; pawn vs sell. Selling is simple and a straightforward option if you don’t need to get your item back at any point. All you have to do is bring your item to a pawn shop, make a deal with the pawnbroker, and walk out with your cash. Pawning is a more complex process. Essentially, pawning your items is more like taking out a loan with a pawnshop, using your item as collateral. You bring your item into the pawn shop; if the pawnbroker believes they can resell it for a profit, they will take your item and give you cash. The shop will then keep your item in storage for a set amount of time. To get your item back you’ll need to pay back the loan in full plus interest in that timeframe. If you don’t pay off the loan before time is up, the pawn shop can then sell your item.

Reports on which option makes more money are conflicting. Basically, it will all depend on which pawn shop you choose. We recommend getting quotes from a few different shops to get the best price.

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