Pawn shops pay cash for just about anything, but it comes at a price.
The potential drawback is how much pawn shops pay you.
I recently sold several items to my local pawn shop, and wanted to share what percentage the pawn shop paid, and when to consider other options.
How much do pawn shops pay?
In my experience, pawn shops pay approximately 7-35% of the original retail price. For example, if you bought a power drill for $300, a pawn shop would typically offer between $21-$105 for the item.
Biggest reasons for low offers from pawn shops:
- pawn shops need to buy low enough to still have room for profit when they resell it
- there’s a chance they don’t resell the item they bought from you, so they hedge their bet by offering a low amount
My Recent Pawn Shop Experience
A few months ago, I decided to pawn my guitar, vintage radio, and KitchenAid mixer. The retail prices for these items totaled about $1,000, and the pawn shop originally offered me $125 for everything.
If you know how to sell to pawn shops, you’ll know that their first offer is never the best offer. Instead it’s just a starting point in the negotiation.
After going back and forth a few times, we settled on $325 for everything or ~32% of the original retail price.
Fortunately we were able to agree on a pretty good price. My biggest tip to increase your payout from pawn shops is stand your ground, and be okay with walking away if the price isn’t right.
How does a pawn shop determine value?
Pawn shops determine value by analyzing prices of similar items that recently sold online, current precious metal prices (if you’re selling jewelry), and how quickly similar items sell in their store.
Using Sold Listings
Most pawn shops also sell their inventory online. So they usually check sold listings on websites like eBay to know what items are selling for online.
This is a simple process that anyone can do, you don’t even need an eBay account. See below for the process.
If you want to sell on eBay, this is something you’ll do all the time to figure out current market prices.
Current Precious Metal Values
Rings, watches, and coins are usually made with precious metals like gold, platinum, and silver. The value of these items are not only based on their intrinsic item value, but also current “spot prices” of precious metals.
Spot price refers to the current price a commodity (in this case, a precious metal) is being sold/purchased.
So, if you’re selling a gold wedding ring, usually the current “melt value” plays a big role in the offer, and will be near the lowest amount offered.
The ‘melt value’ is an easy number to determine beforehand, by weighing your item and checking the current precious metal price index. If you own something with precious metals in it, these are usually items you can pawn for $500 or more.
Pawn Shop Inventory
If you were pawning a game console, and that item sells well at one pawn shop and poorly at another, the second pawn shop will offer less because the item isn’t a great seller in their store.
For this reason, some pawn shops might offer a little more or a little less than the next pawn shop down the street.
Not to mention, some pawn shops pay fairer prices than others. To determine which pawn shops pay better rates than others, check Google Reviews of stores in your area.
Most of the time reviews will mention whether shops offer fair prices or lowball.
Do you get more if you sell or pawn?
You’ll usually get more for selling rather than pawning, because pawn shops sometimes have to sell the item after providing the loan if the item’s owner defaults on it.
As with all loans, lenders want to receive interest on their money, so the pawn shop will offer a little less to account for loan interest.
Oftentimes though, people repay the loan and simply need gap funding for a life emergency. Luckily there are numerous ways to get cash quickly, so always remember you have options.
However, if there’s a good chance you won’t repay the loan, you should consider selling the item rather than pawning since you’d receive a slightly higher amount.
Places that Might Pay More than Pawn Shops
In some situations, pawn shops won’t offer you the highest payout. Fortunately there are countless places to sell, both locally and online.
I’ve experimented with each of these methods, and will share a few reasons why they’re worth considering.
This is a highly underrated way to get quick cash for clothes, shoes, and accessories. I recently did a massive closet cleanout, and brought a huge basket of clothes to Plato’s Closet.
I was shocked how much they paid for my clothes.
Plus, most people don’t realize Plato’s Closet accepts a wide assortment of items including: belts, handbags, bracelets, hats, necklaces, sunglasses, boots, and sandals.
Hosting a garage sale is great strategy when you have a lot to liquidate. One nice thing about selling at garage sales is you probably won’t be dealing with skilled negotiators like at pawn shops, which can be stressful.
If you don’t have a bunch of things to sell but still like this idea, many people do ‘multi-family’ yard sales, where you team up with someone else doing a yard sale.
Online & Local Marketplaces
There are tons of great marketplaces to sell stuff like: eBay, Facebook Marketplace, Mercari, Poshmark, and Craigslist.
If you want to sell something that’s collectable or very popular (ex: graded trading cards, rare watches, Jordans, etc), you can sell it at a higher price online rather than at a pawn shop.
For example, selling on StockX was designed for collectable and rare items, most of which are shoes.
In terms of drawbacks, the selling process takes longer and requires more work, but you’ll earn more money as a result.
If you’re looking for the easiest marketplace, I recommend selling on Mercari. I’ve sold a bunch of stuff on the platform and love its features, such as shipping things locally using Uber.
Whether you want to sell your Apple Watch or a family heirloom, online marketplaces help you reach the right buyers.
So, how much do pawn shops pay? Now you know they usually pay 70-93% below the retail price.
If you are not pleased with their offer, remember there are many other ways to sell things today.
John-Paul Cody has been an avid online seller for years, across platforms including eBay, Mercari, Craigslist, and more. He has a Bachelor's Degree in Economics from UNC Chapel Hill, and works in data analytics and marketing.