Many of us have faced the need, at some point in time, for some quick cash. Pawn shops provide an easy and quick way to do just that. And there is nothing humiliating about it. A lot of the guys who work there, got the job while «pawning» their stuff, - they'll understand.

A lot of people are intimidated by Pawn Shops, and although it is true that in the past, pawnshops have been known to have a shady reputation, a modern pawn shop is a safe and a pleasant place to do business. And knowing a few tricks of the trade could make your experience even more enjoyable.

It is safe to say that most people have a general understanding of the function of such establishments. Pawn shops operate by providing short term cash loans. The collateral, an individual provides, is held as security, and is not purchased by the pawn shop. That is unless the person wishes to sell the item, and not borrow cash.

It is a well established myth, that pawn shops make most of their money from selling the items from forfeited loans. Nothing could be further from the truth. The fact is that most of the profits come from the interest on those loans. They will go out of their way, to get the customer to repay the loan and interest. There is a law, in many states, requiring a pawn shop to notify their customes of past due loans by sending a postcard, and many will go as far as calling every single past due client to request an interest payment. Pawn shops are not out to get your stuff! It may be hard to believe, but the national average of repaid pawn loans is around 80 percent.

Pawn shops, these days, work in close cooperation with law enforcement. Careful records keeping and making safe business decisions is key. Many brokers will not engage in a transaction even if slightly suspicions of foul play.

To make the process as painless as possible, here are some tips. The most convenient and desirable collateral, would be jewelry and firearms, although many other items are accepted, especially hand tool, power tools, high end electronics, and even dvd movies.

To prevent any disappointment, I must mention that retail value of many things, and especially jewelry, has little to do with a real market values. In a pawn shop, jewelry is priced on its weight in gold, depending on purity, and diamonds are valued at no more than 30-35 percent of their wholesale price. Other precious and semiprecious stones, usually hold no collateral value. This is due to the complexity, associated with the necessity for extensive gemological knowledge and equipment needs. To estimate what other specific items, like electronics and tools might be «pawned» for, it would be safe to take an ebay average sale price, and expect about half.

When estimating the value of your collateral, the pawnbroker is directed by a few different criteria. First and foremost the resale value of the item, in case you do not repay the loan. It is always a fine line for the pawnbroker. On one hand he he wants to provide a larger loan, in order to secure a larger interest payment, and on the other, be able to resell the item for a profit, in case you do not redeem it. This is when the second criteria comes in. Personal appearance and attitude. No one will ever tell you this, but a pawnbroker can generally get an idea, based on the above mentioned, whether the customer will return to repay the loan. Another thing worth mentioning, is that the pawnbroker will always loan more money to a returning client, with a good redemption record.

To be continued...