Pawning vs Selling: Which is Better? (2023 Guide)

by Erin Schollaert


When people need money, they often struggle with the decision of pawning vs. selling. 

On the one hand, you can put up your goods for a short while and possibly buy them back: but on the other hand, you get more money and control if you sell your items yourself.

If you’re unsure whether to pawn or sell and need funds soon: these are the top things for you to consider. 

What’s the difference between pawning and selling?

Although generally, pawning and selling to a pawn shop are treated as the same term, they’re different. 

Pawning is when you leave an item with a pawnbroker or pawnshop as security for the money they’ll lend you. 

They hold these items for at least a month, up to a year, depending on your initial agreement, and then return them when you pay back the loan plus whatever interest.

If you’re unable to pay the loan back, they’ll then sell the item along with the other goods within their shop to gain back the money they had lent you, and you forfeit rights to it. 

You can also sell items to a pawn shop directly, which allows a quick turnaround of funds. 

Selling is far more straightforward. If you’re asking yourself, ‘is pawning worth it,’ it’s often because you’re unsure if selling is better. 

Selling allows you to connect with a buyer and exchange your item for money without it being seen as a loan. You can generally gain more funds this way, although it can take longer to do.

Tactic for Success

If you have time and need a specific amount of money: selling is your best option. If, instead, you’re desperate for quick cash that you might be able to pay back soon: pawning could be a good choice.

What are the pros and cons of selling?

Selling can seem like the perfect idea if you want to get as much money as possible for your items! 

Unfortunately, it’s also a mixed bag. These are the pros and cons of selling your items.


The Pros of Selling

Selling allows you to sell your item and create a business for yourself that ensures you can eventually gain a steady form of income through this shop. 

Find out how much pawn shops offer, including for these items you can pawn for $500, to help you get a head start on your business.

You may even choose a specialty such as selling used appliances or selling silver.

Selling gives you the chance to pick your own prices, build community with buyers, and able to have predictable incomes instead of dealing with the unpredictability of pawnshops.

Selling is also looked upon more positively in society, giving you something to brag about instead of avoiding mentioning. 

The Cons of Selling

Selling isn’t perfect either! For instance, if you need money quickly, you have no control over how soon a buyer may be interested. 

Beyond this, you’ll have to pay for fees on most sites you use and possibly could have to add it to your taxes, depending on how much you made.

Selling can also be problematic if you’re selling to people who aren’t in your area.

If you’re shipping the item, you’ll have to invest time and money into getting the shipping materials, getting it to the delivery service you want to use, and any advertising you need to do.

With selling, the items are gone for good, and there’s no option of getting a loan to get your items back at the end of this.

Tactic for Success

If you plan to repeatedly sell goods, it’s vital that you build a brand for yourself and let people know your business can be trusted. Customers don’t want to buy from an unknown.

What are the pros and cons of pawning?

Pawning items for quick money peaks at the end of the month and in the later months of the year, more than any other time. 

Although it has a rough reputation, it’s generally a safe way to get a loan or to quickly sell something if you don’t have time to wait and find a seller.

These are its pros and cons.

The Pros of Pawning

Pawning has a quick turnaround, allowing you to sell items within minutes of walking into the store. 

They also take a large range of items, ranging from jewelry to electronics, instruments, appliances, and so much more. 

This allows them to be a one-stop shop if you need funds and are desperate.

The Cons of Pawning

Unfortunately, there are plenty of downsides to this system. 

If you need a lot of money, you’ll be disappointed to find out that pawn shops pay far less than the value of a product, averaging at least 30% lower than you could make selling it on your own: possibly, even more, depending on the shop. 

Their loans also aren’t free, with interest rates ranging from 12% to 240%, depending on the limits set by your state.

There’s also the issue that if you want your item back and you’re unable to make the funds in time, you’ll lose it. This leaves anything you pawn for a loan at high risk.

Trend on the Rise

Between seventy and eighty percent of items that are pawned are eventually reclaimed by their initial owners. If you need a short-term loan for a small amount, this is a fantastic option for most people.

How do you find a good pawn shop?

The best way to find a good pawn shop is to look at reviews. Pay attention to reviews specifically from those who have received a loan from the pawn shop and what they say about the shop.

Although you should try to stay as local as possible to save money on gas, if you can find one that’s worth it, it might be worth driving up to twenty miles to find a good one.

These are some of the signs you can trust a pawn shop.


Signs You Can Trust a Pawn Shop:

  • Could Offer a Loan – if a pawn shop is high quality and well insured, they can handle holding your items on loan until you pay them back.
  • Understand the Value of Goods – a good pawn shop understands the value of your items and is honest about it instead of undercutting you.
  • Have a License – most pawn shops fall under the category of ‘payday lenders,’ which requires a license to operate.
  • Quality Security – does this pawn shop have security cameras, a security guard, and other steps to protect your items if you get a loan?
  • Well Liked and Reviewed – when you go online, does this shop have a longstanding good history with customers?

Trend on the Rise

Pawn shops have declined by 2% over the last year, with many getting desperate for items to buy that they can sell for high value. This is a great time to get in on selling goods you’d struggle with otherwise. 

Where can you sell items?

Selling items can be a great way to make some major money as long as you do it intelligently. 

Finding the right method to sell your items is as important as picking the items you sell.

If you’re unsure about where to sell and are looking for options: these are the top sites to consider:

Top Places to Sell Items Online:

  • Selling on eBaythe most popular site for selling directly to buyers; eBay is an awesome site to sell items via auction or flat price based on your needs.
  • Selling on Amazon – although this is a massive market that’s hard to get into because of the importance of reviews on it: Amazon is a great place to build a business for yourself.
  • Selling on Etsy – if you want to build a name for yourself and don’t mind fees when you start out, Etsy is a great way to build a creative or retro brand.
  • Selling on Bonanza – similar to eBay and Amazon, this site charges fees based on how much money your item sells for and allows you to advertise all over the web.
  • Selling on Ruby Lane – this site is best for anyone who’s not looking to start a business and just has a few spare things to get rid of.
  • Selling on Poshmark – the king of reselling sites, Poshmark is fantastic for selling used clothing and antique goods.

When is one better than the other?

Whether you’re contemplating selling or pawning, the one thing on your mind is getting paid. 

If you decide to sell, you’re generally going to get more money, although you’re giving up your goods once and for all, and you’ll have to deal with waiting for customers. 

If you decide to pawn, you’ll get to receive money quickly but have to deal with getting far less: but you might get your item back if you decide to pay off your loan.

Whichever you pick depends on your situation, but there is a right answer for every situation. 

Wrapping Up

When you need money, it’s important that you make the right choice for what items you sell and how much you receive. 

Pawning and selling each has their own perks, pick which one will help you most.

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Erin is a business teacher and mother of three. When she’s not in the classroom or fulfilling her obligations as an A+ hockey and lacrosse mom, she’s working on her latest article.

About the Author

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Erin is a business teacher and mother of three. When she’s not in the classroom or fulfilling her obligations as an A+ hockey and lacrosse mom, she’s working on her latest article.