I have been in the Pawn Business for 6 years of my life. I started working for Sonny’s Pawn Shop in Sheffield, Alabama in the early 90s. The owner, Sonny Murphy had been in business for many years. I learned a lot from him. So much that I based our business model around Sonny’s ideas and structure from back in the 90s. Sadly, Sonny passed away years ago, but Larry McNutt continues the Sonny’s Pawn Shop business in Sheffield.
So what exactly is a pawn shop?
From Wikipedia:
A pawnbroker is an individual or business (pawnshop or pawn shop) that offers secured loans to people, with items of personal property used as collateral. The items having been pawned to the broker are themselves called pledges or pawns, or simply the collateral. While many items can be pawned, pawnshops typically accept jewelry, musical instruments, home audio equipment, computers, video game systems, televisions, cameras, power tools and other relatively valuable items as collateral.
If an item is pawned for a loan (colloquially, “hocked”), within a certain contractual period of time the pawner may redeem it for the amount of the loan plus some agreed-upon amount for interest. The amount of time, and rate of interest, is governed by law or by the pawnbroker’s policies. If the loan is not paid (or extended, if applicable) within the time period, the pawned item will be offered for sale to other customers by the pawnbroker. Unlike other lenders, the pawnbroker does not report the defaulted loan on the customer’s credit report, since the pawnbroker has physical possession of the item and may recoup the loan value through outright sale of the item. The pawnbroker also sells items that have been sold outright to them by customers. Some pawnshops are willing to trade items in their shop for items brought to them by customers.
Many people believe that pawn shops are shady places where stolen items are taken. TV and movies back in the 60s and 70s portrayed that. I am here to tell you that is not true. The Pawn Business is very regulated, by the State of Alabama as well as the Federal Government, if firearms are taken in or sold at the business.
To make it real simple, a pawn shop is a bank. If you got to a bank to get a loan, you have to have collateral, even if it is just your signature. Most banks won’t do loans for less than $500.00. The pawn shop is the same way. We will make you a loan, usually less than $500.00, but you have to have collateral for the loan, just like a bank. The comparison is very true considering that pawn shops are governed by the State banking Department of Alabama.
Of course pawn shops charge more interest than banks but a loan from a pawn shop is a short term loan. The State of Alabama does not allow any Pawn Shop to charge more than 25% per month or 300% annually.
What are pawn shops good for? Pawn shops are ideally meant to be used for a sudden Bill that has come up or to get enough cash for the person to make it to payday. I have seen signs in pawn shops outside this area that say “Pawn Responsibly.” This is an idea that should be considered before you might pawn something.
Some say that pawning is the oldest profession in the world. Others say that “Another Business” is the oldest profession. I guess that is a debate for historians. Another use of pawn shops is individuals can find bargain on pre-owned items. Pawn shops take in a variety of items such as firearms, tools, computers, stereos, comic books, jewelry, as well as other electronics. So you may find that Go Pro that you have been looking for at a discounted price at a local pawn shop.
So, in closing, don’t be afraid to visit your local pawn shop. You might find a great bargain on something you have been looking for. Pawn shop have to turn a list of items pawned, traded or purchased into the local police departments each month so the items can be checked to see if they have been stolen. Most pawn shops carry new and used firearms.
Hopefully this article has given you an insight in the pawn world.
Bobby Inman is retired from Law Enforcement after 21 years of Service. He is the Store Manager for Southern Heritage Gun & Pawn, located in Tuscumbia, Alabama. He has articles published in Law & Order Magazine, Police Marksman Magazine, Guns & Weapons for Law Enforcement Magazine as well as several published ebooks on Amazon, Kobo Writing, as well as Nook (Barnes & Noble). He is owner of Poopiedog, an Animal Rescue Dachshund, who is his constant companion. He is a Senior Investigative Reporter for the Quad Cities Daily.
