A pawnbroker is a moneylender who offers loans which are secured by personal possessions. When someone borrows money from a pawnbroker, he or she has the right to reclaim personal items used as collateral within a set period of time by repaying the loan and interest. Working as a pawnbroker can be dangerous, because pawn shops are often targeted by thieves who wish to steal movable goods or cash.
Pawnbrokers are members of an ancient profession. Numerous records from several ancient cultures indicate that pawnbrokers were operating in the Middle East, China, Greece, and Rome in much the same way that they do today. In fact, pawnbrokers are specifically addressed in the Bible, in a discussion of moneylending and usury.
When a client approaches a pawnbroker for a loan, the pawnbroker inspects the item the client is bringing in, to determine how valuable and salable it is. Any number of things can be offered to a pawnbroker as collateral for a loan, including furs, jewelry, electronics, clothing, and furnishings. Certain items such as firearms may be restricted by law, and pawnbrokers must be familiar with the laws which govern the items they can and cannot accept. The pawnbroker must be skilled at assessing value and determining the current demands of the market, coming up with a valuable which will be reasonable and offering the client a loan based on the value of the item.
If the client accepts the loan and the terms, which usually include high interest, the pawnbroker retains the item for a set period of time, giving the borrower a chance to repay the loan and claim it. If the borrower fails to return or cannot repay the loan, the pawnbroker sells the item. Pawnbrokers can sell items to other customers, or strike deals with other business owners; musical instruments might, for example, be sold in bulk to a store which sells music instruments.
Pawnbrokers need to keep careful records, and may be mandated to submit these records to the police. Items which come through a pawnbroker's doors can be of questionable provenance, making it important to take steps to reduce taking in stolen goods. Pawnbrokers may be required to examine personal identification to verify the owners of the items they sell, and borrowers may need to fill out a disclosure form. Pawnbrokers also record descriptions and serial numbers of the items they sell, and in the event that an item in the store is stolen or involved in a police investigation, police can use the records to track down the borrower.