Recently, a Philadelphia pawn shop has become similar to the corner retailer, helping people in need with cash for things like food, the gas bill or whatever else they may need when their paycheck doesn’t go as far as it used to.

A pawn shop is similar to a bank in that they accept collateral for cash.  Cash for Gold is the most common transaction seen at pawn shops.  A person in need of quick cash will bring in their gold jewelry or other valuables such as musical instruments; electronics including large screen televisions, computers and laptops, video/camcorders and digital cameras; video game systems; cell phones including iPhones; DVDs and CDs and some small appliances.

A pawn shop is not like a bank in that they do not need a credit check in order to hand over cash for a person’s collateral.  People who pawn their items usually have between 30 and 60 days – depending on which state they live in – to retrieve their valuables and pay approximately 3% interest on the money they have borrowed.  Roughly 80% of the people who pawn items will reclaim their items and pay back the money.  The 20% that do not retrieve their valuables keep the money and the pawn shop goes on to sell the items in the store to people who are bargain-hunting for slightly used goods at discounted rates.

With all the shenanigans that have plagued financial institutions in the current financial crisis, many organizations, such as the National Pawnbrokers Association, are taking a closer look at such institutions that provides financial services to make sure predatory lending is not taking place.

Pawn shops have had a reputation for being a haven for stolen merchandise.  This has changed in recent years as many pawn shops send daily transaction sheets of everything pawned that day to law enforcement officials.

Numerous pawn shops across the country operate fairly and openly and do not seek to make a profit by taking advantage of cash-strapped citizens.  The majority of pawn shops are honest businesses run by good people who want to help others in this downturned economy by allowing them to participate in selling gold jewelry for the money they need.