Pawn shops need insurance. There are policies for property damage, legal fees, inventory losses, and damage to contents. Rates depend on revenue, claims history, and location. They range from $400 to $700 per year.
Pawned items are not insured. Shops collect them for loans. If loans are not repaid, shops sell items.
Police require pawn shops to report serial numbers of new items. This helps track stolen goods. But most pawned items are not stolen.
Pawn shops give quick cash loans to people. People provide collateral until repayment. If no repayment, items get sold. Shops also buy items people trade in.
To pawn means leaving property for a loan. If one defaults, the shop sells it. Pawn shops have laws on reporting and operations.
Are pawn shops rip offs?
Can pawn shops lie about value?