Selling or pawning an item at a pawn shop is one of the best ways to get cash fast. However, many people are unsure of whether they should sell or pawn an item, and if one is better than the other.

Both are good options, but have pros and cons you should be aware of depending on your needs and circumstances. In this article, we’ll look at the differences between selling and pawning an item so you can make an informed decision on which option is better for YOU.

For more information on the valuation of items, check out our article, “How Pawn Shops Determine the Value of Your Items.”

What Items Can You Sell or Pawn?

Before you approach a pawn shop, make sure they accept the type of item you wish to sell or pawn. Pawn shops typically don’t accept just anything a client wants to sell or pawn.

At Maxferd, we accept the following items:

• Jewelry (including broken jewelry)
• Fine watches
• Precious metals and coins
• Loose diamonds and precious gemstones
• High-end DSLR cameras and equipment
• Apple products
• Laptops and computers
• Musical instruments
• Certain collectables
• Luxury handbags
• Art

Once you know a pawn shop should be interested in what you have to offer, it’s time to decide if you want to sell or pawn the item.

Sell vs Pawn

When Should You Sell an Item?

If you no longer need or want an item, it makes sense to sell it and put the money to better use.

People will typically sell an item for one of the following two reasons:

• They NEED the cash – They have to pay for something and are short of money.

Or

• They WANT the cash – They want to buy something else for the money that would give them more enjoyment. They may also decide to invest the money or pay off some debt with it.

The pros and cons of selling your item to a pawn shop include:

Pros of Selling to a Pawn Shop

• Get cash fast – You can literally walk into a pawn shop and walk out with cash in your pocket.
• Save time and money – Selling your item on a platform like eBay or advertising it costs money. And you may not find a buyer for it straight away. You also have no guarantee that you’ll get a better price for it, at least not over the short-term.

Cons of Selling to a Pawn Shop

• You may not always get the price you want – Pawn shops also need to make money. They have to resell items that often stay on their shelves for months before they find a buyer. 

When Should You Pawn an Item?

If you don’t want to lose ownership of your valuables, using them as collateral to get a pawn loan is the way to go.

People will typically pawn their valuables for two reasons:

1. They need the cash – They have to pay for something and are short of money.
2. They expect to be able to pay back the loan – As soon as the loan is paid off they can pick up any valuables they used as collateral for the loan.

The pros and cons of pawning your valuables to a pawn shop include:

Pros of Pawning an Item

• Quick and easy way to get a loan – Getting a collateral loan from a pawn shop isn’t hard or time consuming. In most cases, it can be finalized within a matter of minutes.
• No credit check required – Whether you have a good credit score or a bad one doesn’t matter. Pawn shops don’t approve a loan based on your income or credit history but on the value of the item you’re offering as collateral.
• Won’t reflect negatively on your credit score if you don’t pay the loan back – Pawn shops don’t report non-payment or late payments to the credit bureaus. And even if you have failed to pay back a loan, you can always get another collateral loan in the future.
• Very flexible compared to getting a collateral loan from a bank – A bank will normally not be willing to give you a collateral loan against anything other than your house or car. A pawn shop on the other hand will accept valuables such as jewelry, laptops and luxury handbags as collateral.

Millions of people are “unbanked” or “underbanked”. They either don’t have a bank account, or have a bank account but also use financial services outside of the banking system. Pawn shops help them to effectively manage their short-term cash needs.

Cons of Pawning an Item

• You may lose the item if you don’t pay back your loan – Pawn shops may sell items left as collateral if the owner fails to pay their account. (This isn’t really limited to pawn shops as banks and other financial institutions will act in the same way)

Note: A common myth is that pawn shops try to keep your items. At Maxferd, we prefer that an item is redeemed. We want our customers to have a positive experience and build a long-term relationship with them. We know that if we earn their respect, we’ll have a customer for life.

According to the NPA (National Pawnbrokers Association), about 85% of people redeem their loans and pick-up their item from the pawn shop once they’ve repaid the loan.

Collateral loans are short-term loans. However, nothing prevents you from getting a new collateral loan once your loan has been paid off.

Conclusion

Some people think it’s better to sell an item as they believe you’ll get more money for it than if you pawn it. Others believe exactly the opposite. The simple truth is there’s no general rule that you’ll get more money for either selling or pawning your valuables.

As mentioned in this article, the decision on whether you should sell or pawn an item depends on your needs and circumstances.

If you no longer need or want an item, it makes sense to sell it and put the money to better use.

If you don’t want to lose ownership of your valuables, using them as collateral to get a pawn loan is the way to go.

Whether you want to sell or pawn your valuables, Maxferd is the place to go.

We offer a 4-month loan on all items, which can be renewed or extended at any time.

For Jewelry Loans under $2,500, we offer you the option to roll over the loan at the end of the 4 months without paying any interest or principal payments for an additional 4 months, giving you up to 8 months with no payments.

Call us at (866) 805-5975 or visit one of our five locations in San Francisco and Los Angeles to find out how we can assist you.

You can also browse some of our shop’s highlights in Maxferd Pawn Shop Finds #1: Unique Items in Our Stores.