Lowell Jewelry & Loan

Frequently Asked Questions

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Frequently Asked Questions

What is the pawn industry?
The pawn industry is one of mankind’s oldest financial institutions. Simply put, the pawn industry offers clients short term loans utilizing tangible personal property as collateral for the loan. Over 70% of pawn loans are redeemed. This means the majority of people who borrow from pawnshops return to pay off the loan and redeem their collateral. Those who do not pay off the loan forfeit their collateral, which is then sold at the pawnshop to retail customers. This website now offers the pawn community a way to list all merchandise at one consolidated location.

How long has pawn broking been around?
Pawn broking can be traced back as far as 3,000 years to ancient China, and can be traced in historic Greek and Roman financial records.

With reference to England it was in the mid-18th Century when bills were passed through Parliament regulating pawnbrokers i.e. proposing licensing and a levy of 1/5th of all interest charged going to hospitals and workhouses. At about this time three balls, either golden or blue became the sign of the pawnbroker – Blue was in fact a more fitting color than gold, since the sign probably came from the coat of arms of the Medicis, from whose territory the Lombard Goldsmiths (the first registered money lenders) originally came. Between the mid-18th and 19th Century pawnbrokers had expanded all over the country and further acts were introduced to regulate this expansion. By 1851, there were about 4500 pawn broking establishments mainly based in industrial working class areas. At the turn of the century most pawnbrokers were open until mid-night on Saturdays taking in all manner of pledges from linen to furniture, blankets and clothes. These were generally put in store rooms above the premises where people slept to protect the goods.

During and in between the two world wars, it was not exceptional for industrial pawnbrokers (assorted general household goods, tools and machinery) to take in 2000 – 3000 pledges a week, by the 1950’s the number of pledges dropped to about 300 a week – This was mainly due to the advent of social security.

Trade for the pawnbrokers in the 60’s and 70’s was very slow and to make matters worse a series of complex legal regulations made pawn broking an unattractive form of money lending. The demise of the pawnbroker altogether was a real possibility; the government changed this via pressure from the National Pawnbrokers Association and in 1974 introduced the Credit Consumer Act which simplified pawn broking into a clear and concise form of money lending.

By the late 70’s and early 80’s pawn broking had started to improve and during Prime Minister Thatcher years it boomed. People needed money to make money and during times such as major share issues the pawnbroker saw a large increase in business. ‘The boom years brought about an unprecedented need for credit. In the late 80’s the crash put a sudden stop on the ‘never ending’ credit lines and as a result borrowing money was suddenly very difficult.

From the start of the recession, people in general have found living and making money a lot harder; as credit lines have been shut down and bank charges increased dramatically. They since have turned to the pawnbroker as a quick and simple form of credit using the articles they acquired during the boom years as collateral.

Who controls the rate of interest on pawn loans?
During the middle ages, Usury laws levied by the Church prohibited the charging of interest on loans, which limited pawn broking to people who had religious beliefs outside of the Church. Later, out of economic necessity, and because of serious problems within the banking system, pawnshops began to grow in popularity. Today in the US each state regulates Usury Laws. This means each state regulates how much interest a pawnshop can charge its customers. The states have an interest in regulating fees charged by pawnshops to protect their citizens from “predatory lending” practices.

What do the 3 balls outside of pawnshops mean?
The Medici family in Italy was moneylenders during the Middle Ages and operated pawnshops throughout Europe. Legend has it that they also slew a giant for King Charlemagne using three bags of rocks. These three bags became stylized into three golden balls, which became a part of their family crest and the source of the symbol we see today.

What can be pawned?
Just about anything of value which is legal in that state can be pawned, but the decision on what is acceptable for pawn loans varies shop-by-shop. Some shops may take appliances, while other shy away from large items like refrigerators and washing machines. Each time a pawnbroker loans on an item, he knows that someday it could be on his shelf for sale, and must tailor his lending activities somewhat on his retailing experiences.

Some additional common items that are pawned include tools, electronics, computers and jewelry. However, we’ve seen pawnshops that used cars, homes, property, aircraft, timeshares and mobile homes as collateral for loans. Most larger items are redeemed. Common items are those that have value today yet will keep their value over time. Gold, diamonds and tools are good examples of items that keep their value. Conversely, laptop computers that depreciate quickly overtime will receive less on the loans.

Since Lowell Jewelry & Loan has a diverse customer base, you never really know what you will find. One thing is certain; there are some amazing deals and opportunities.

Are pawn shops safe to buy from?
Most pawn shops are established businesses looking at long-term business profits. The pawnbroker is not here today and gone tomorrow like the flea market, auction sale, garage sale, or the guy selling out of his van on the side of the road. Today’s pawnbroker knows his business and is only as good as his reputation. He must be fair, but at the same time ensure profits to remain in business. It’s as simple as that. Lowell Jewelry & Loan is an accredited pawnshop with a track record of serving our communities.

How does a pawn work?
Every state has very specific laws on regulations on fees. This is an example of a pawn situation.
Jimmy has to make a truck payment this Friday or he’s in danger of having his vehicle taken away by the bank. His next paycheck is two weeks away. Traditional banks wouldn’t consider loaning him the two hundred dollars he needs to make his truck payment, which happens to be necessary for him to make his living. Jimmy opens an old box that has been sitting in storage for years. Inside he removes his high school ring, two chains and a single diamond earring he once wore as a kid and takes them to Lowell Jewelry & Loan. After weighing the rings, chains and inspecting the diamond the pawnshop owner tells Jimmy he’ll give him $190.00 in pawn. Jimmy asks if the pawnshop owner can give him $200.00, since this is the amount he needs to make the truck payment. After a short negotiation, Jimmy fills out all the necessary paperwork and receives two one-hundred dollar bills. In the state of Massachusetts, this loan would cost Jimmy $20.00 each month.

Jimmy then has three options:
1. He can pay interest on his items each month to keep the pawn active; or
2. He can pay off the loan including interest and regain his goods (this happens more than 70% of the time); or
3. He can decide to forfeit the goods and never pay back the loan. The pawnshop now owns the items outright.

Can I sell items directly to a pawnshop?
Anything of value which is legal can be sold directly to a pawnshop, so the job is to decide on which pawnbroker will give you the best price. The question is: if you can sell it for so much more on eBay, why would someone need to sell the item to a pawnshop at a much lower price? The answer is easy: CASH NOW. If you really need the money now, the pawnshop represents instant gratification.

What are the classifications of inventory at a pawnshop?
There are three simple classifications at a pawnshop.
1. Items for sale. Just like a showroom at any retail location, items on shelves in public are tagged for customers to purchase.
2. Items on layaway. Many pawnbrokers offer a layaway plan allowing customers to pay for merchandise over time. While merchandise is being paid for, it sits on a shelf in the back room of the pawnshop awaiting redemption.
3. Items in pawn. These items are waiting for an interest payment, redemption or the item to fall into what is called a “pull” cycle. If the item is forfeited, the pawnshop will “pull” the item and place it onto the general sales floor to be sold .

How much money can you get for pawned items?
There is an elaborate dance played out daily in pawnshops across America. If a pawnbroker offers too little money for merchandise, attempting to maximize profits on the retail side of the business, customers will go elsewhere to pawn their goods. If a pawnbroker offers too much money in an attempt to maximize interest charged on loans, then more customers will default on their pawns and the pawnbroker will be left with a lot of merchandise he paid too much for and can’t sell for a profit. The balance is somewhere in the middle: paying enough to entice customers to utilize his services, but not paying so much that the shop owner ends up with too much inventory that he can’t move. Now, the truth of the matter is you are only likely to receive about 15-35% of the estimated amount the item might sell for in the pawnshop.

Who can pawn an item?
A pawn loan is a binding contract and, as such, may only be entered into by a person who has attained the age of maturity, 18 in most states.

How do I know the item is real?
In today’s society, we are becoming more and more aware of fraud. All pawnshops can test gold using acid assay tests. Most pawnshops have devices which test either the thermal conductivity or the hardness of gemstones to determine their content. Some pawnshops have an EIG Gemologist who can appraise or evaluate diamonds.

Who regulates the pawn industry?
The pawn industry is one of the most regulated industries in the country; it is regulated by both the city of Lowell and Massachusetts state laws and ordinances. Each jurisdiction has its own set of guideline which must be adhered to.

And where would we be without the Feds.  We also have several Federal rules to follow in order to operate this business.

Who uses the pawn industry?
A wide variety of people use pawnshops. For loans it may range from white collar to blue collar to no collar. The pawn industry serves them all. With the advent of everyone with an internet connection can now visit us. One consolidated location for some of the best values around.

How fast can you get a loan?
Unlike a traditional bank loan, at a pawnshop there’s is no need for a credit check because you are giving them your credit in the form of a hard asset. The paperwork process is fairly quick, usually less than five minutes. INSTANT CASH!

Can you pawn firearms?
You can pawn virtually anything in a pawnshop. Federal laws, however, limit the number of shops that might deal in firearms by virtue of the licensing requirements. Massachusetts laws forbid us from firearms.

Can you purchase things on layaway from a pawnshop?
It really depends on the pawn shop and the management. We do allow layaways, however we limit the time you have to purchase them in. We tend to keep it to a term of less than 90 days.

How do people get their pawned goods back?
Remember, when you pawn something they have your item, be it a watch or a ring, as collateral to make sure you pay them back. In all cases, the item used in the pawn does not become the property of the pawnshop until after it forfeits. It remains the property of the customer. When the customer pays off the loan and the interest, the pawnshop has to give back the customer their collateral.

What happens to items once they are “in pawn”?
Pawnshops store all pawned merchandise behind closed doors in a secured storage facility. Once an item is pawned, it is usually logged into a computer database and tagged. Next, the item is placed in organized holding units ranging from bins, drawers, shelves or larger areas and they basically just sit there for as long as the pawn is active. Once the pawn is paid off, the item is pulled from its location and given back to the customer. In the pawn trade this is called doing “PULLS”. A pull happens when a pawn is paid off or when a customer fails to make payment and the item is ready to go to the showroom floor.

Here is an interesting pawn fable on storage: a man once pawned his $100,000 car in New York City and prepaid the interest of $200 for two months. The man asked for the minimal loan the pawnshop would accept for his car. Not quite sure if the man was sane, the pawnbroker gave him the small loan in cash for the car and the man went off carless. Two months later the man returned and paid off the small loan receiving his car back. The pawnbroker asked the man if he was a little crazy for pawning the car. The man replied “I just parked my car in New York City in a bonded holding space for two months while I was out of the country for only $200. You tell me if you think I’m crazy.”

How long does a pawnshop have to hold an item before it can sell it?
A pawn shop has to hold your item as long as the pawn is active, which means as long as the interest on the pawn is current. The actual term of the pawn contract is dependent upon the jurisdiction governing the transaction in Massachusetts is for four (4) months.

What trade associations are in the pawn industry?
Lowell Jewelry & Loan is a member of the National Pawnbrokers Associations. The association is the industries leading method of passing information to its community and leaders. Our CEO is also part of the National Society of Professional Engineers.  In addition, we are proud members of the Lowell Chamber of Commerce.  In today’s diverse society, many people depend on pawnshops to help them meet their daily financial needs not met by other financial institutions. Our customers represent the working families of America who have an unexpected need for a short term loan. Pawn loans keep the electricity on, rents paid and cars working.

Bargain hunters and pawnshops go hand in hand. A wide variety of pre-owned and new merchandise ranging from musical instruments and appliances to electronics, jewelry and power tools can be found at the neighborhood pawnshop. Today’s pawnbroker may be an entrepreneur operating a single location or a larger company with multiple locations around a city or a state. This growing competitive industry is working hard to upgrade the image of pawnshops and to offer needed services to the public.

When visiting a pawnshop you’re likely to find bright, sophisticated lighting and modern merchandising programs to rival the major discount stores. Pawnshop employees are trained in the latest customer service skills and sales contests take place like any other retail store.

The National Pawnbrokers Association encourages giving back to the community and offers guidance to pawnbrokers on how to get involved. Pawnbrokers are also realizing the benefits of becoming active in city government. Educating city and state officials about the industry and the customers served continues to be a worthwhile but challenging endeavor.

Working with law enforcement has always been an important part of operating a pawnshop. Pawnshops comply with all federal, state and local regulations.


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