Gold ’N Pawn
Norwalk, CA 90650
Thank you for your interest in Gold ’N Pawn. We are short term collateral lenders and are here to help you! Please take a moment to browse through our site to find out more about us. For your convenience, we have put together many answers to frequently asked questions you may not know about our business. Please don't hesitate to call us if you don't see the answer. Our friendly and well-trained staff we'll be happy to provide you with any additional assistance.
We pay TOP DOLLAR on Everything
from Jewelry to Electronics!
Give Us A Call Today!
| Here's how it works: | |
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When entering a store, you are greeted by courteous, well-trained employees who are ready and willing to help. |
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You pledge us property, we lend you money. |
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When able to pay back the loan, according to the terms of our agreement, your merchandise is returned to you. |
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We are not in the business of taking possession of property, but are lenders. |
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If you elect not to redeem the collateral, there is no credit consequence to the borrower. |
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Unredeemed items are sold in the store, offering value-priced quality merchandise to shoppers. |
Q: Why would someone go to a pawnbroker to get a loan?
A: Pawnbrokers offer the consumer a quick, convenient and confidential way to borrow money. A short-term cash need can be met with no credit check or legal consequences if the loan is not repaid.
A customer receives a percentage of the value the pawnbroker believes the collateral would bring in a sale. Although the loan to collateral ratio varies over time across pawnshops, a loan of 30-50 percent of the resale of the collateral is typical. Pawnbroking imposes a discipline on the borrower that other lenders do not. Pawn loans do not cause people to overextend credit or go into bankruptcy.
When a customer pawns an item, terms of the loan are printed on a pawn ticket that is given to the customer. The ticket also has other information such as the customer's name, address, type of identification provided to the pawnbroker, a description of the item, amount borrowed, maturity date, service charge and amount that must be paid to redeem the item.
Q: What is the foreclosure procedure?
A: If a customer defaults, the collateral becomes the property of the pawnbroker after the loan is overdue.
Q: Do most pawn customers lose their merchandise?
A: On average, about 80 percent of all loans are repaid. Repeat customers make up most of the business, similar to any other lending or retail establishment. Pawnbrokers know the vast majority of their customers because they often borrow against the same items over and over again.
Pawnbrokers offer non-recourse loans, looking only to the item being pledged to recover their investment if the borrower chooses not to repay the loan. It is solely the choice of the customer whether they elect to repay the loan.
Q: How can I be sure the merchandise I purchase at a pawnshop isn't stolen?
A: Less than half of one percent of all loans are identified as stolen goods. Thieves and robbers are a pawnbroker's worst enemy. Pawnbrokers work closely with the local law enforcement to catch and prosecute these perpetrators.
A customer must provide positive identification and a complete description of the merchandise to show evidence of the transaction. This information is then regularly transmitted to the police department, decreasing the likelihood that a thief would bring stolen merchandise to a pawnshop.
Pawnbrokers are trained to look for stolen property to avoid these costly mistakes. It is not in the interest of the pawnbroker to accept potentially stolen merchandise because the police can seize the merchandise and the pawnbroker loses the collateral and the loaned money.
Q: Is pawnbroking a "bad times" industry? A: Pawnbrokers survive bad times if they make adjustments both at the retail and loan counters, but they do far better in good times. In hard times, customers move away to find employment, have less ability to repay their loans, and the value of all merchandise goes down. If goods sell for less, pawnbrokers must loan less thus earning a smaller return. In good times, customers have a greater ability to repay their loans and unredeemed merchandise sells faster because customers have more discretionary income.
Q: Are there firearms in pawnshops?
A: Some pawnbrokers are registered firearms dealers with permanent places of business.
Pawnbrokers comply with all federal (ATF) regulations as well as furnishing local law enforcement with information regarding every transaction. No other dealer does this.
Q: How does a pawnbroker's business work?
A: Pawnbrokers lend money on items of value ranging from gold and diamond jewelry to musical instruments, televisions, tools, household items, etc. Since the customer is providing collateral, there is no need to do a credit check.
A typical loan is small, averaging $75 to $100. The interest rate charged by a pawnbroker is controlled by the state and varies widely across the nation. The pawnbroker is also required to hold the merchandise for a specific period of time, giving the borrower time to repay the loan. This hold period also varies widely but is typically in the 60-90 day time frame.
Q: How are pawnbrokers regulated?
A: Most of the regulations have been initiated, sponsored and supported by the pawnbroking industry. At the state level, most pawnbrokers are licensed and regulated. At the federal level, they follow rules from the Bureau of Alcohol, Tobacco and Fire Arms (FFL license), and are regulated by the Federal Reserve Board (Truth In Lending Act, Regulation Z) in much the same way as banks. They are also required by the Patriot Act to check all customers against the Treasury Department's database of known terrorists.
A: To provide their service, all lenders must charge rates commensurate with the size and duration of the loan, collateral, risk and recourse. Pawnbroker loans are small-dollar, short-duration loans.
The item stands as the sole collateral and pawnbrokers are liable for the replacement value if something happens to the item while it is in their care. There are no hidden charges as with other lending institutions. On the other hand, a pawnbroker's cost basis is far greater. They incur costs for personnel training, appraisal, security, handling, storage, insurance and regulation not incurred by other lenders. Since 15-20 percent of a pawnbroker's customers elect not to repay their loans, they are forced to turn their "bad debt" into a retail center to recover their cost. Other lending institutions do not incur retail costs that can include additional floor space, gondolas, counters, personnel, advertising, shop lifters, retail competitive costs, and new merchandise costs to supplement the unredeemed goods.
Q: Are pawnshops' rates
excessive?
Member of the CLSDA of California
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Collateral Loan & Secondhand Dealers Association
