How do pawnshops make money?

Question

How do pawnshops make money?

Answer 1

It's actually pretty easy...

when somebody "pawns" something that has a value of, for example, $100.00

the pawn shop will hold that property, and give you a claim ticket and $70.

that claim ticket that you have now is only good for a set amount of time for you to come back and buy the item back... not just for the $70 that you got... but with applied interest...

so... in order for you to get your item back, you'll probably pay around $130-150.

if you don't come back to re-claim your property, the pawn shop will sell the item to somebody else for close to the same amount of money.

Answer 2

There are two ways that pawnshops make money,. 1) they loan money based on real collateral ( property) and charge a usurious interest rate. 2) If the property is abandoned they sell it at an immense profit.

Answer 3

They are legal "Ah Long" lo.