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Old 21 October 2009, 09:39 PM   #18
limbo
"TRF" Member
 
Join Date: Jul 2007
Location: Sydney
Posts: 4,624
Not all pawnshops or secondhand dealers are the same. There are many who will take advantage of other people's miseries and will pay whatever minimum they can get away with so they can make a quick buck selling the items.

I do know of one pawnbroker who has a different strategy. He will offer the usual minimum, and will have the item on display, but will have a label indicating the item is on hold.

In reality, there is no buyer. This pawnbroker knows that the person who pawned the item is aware that the item is worth far more than what he pawned it for, so he hopes to be able to redeem the item one day.

The poor man will just extend the "loan" by paying the monthly interest of between 10% to 15%. The pawnbroker told me that if he sold the item like most pawnbrokers, he would have a short term profit, but will have to wait for someone else to pawn another item. Pawnbrokers are just like any other bsuiness, they constantly require stock.

With his strategy he is virtually assured of regular stock and income. His regular clientele (pawnees) keeps coming back to him because they know he won't sell their valuables, hoping they will be able to redeem the item one day.

Some do in fact managed to redeem their items eventually, only to pawn it again a few months later and the cycle starts again. The interest earned is usually greater than any profit the pawnbroker would have made had he sold the item.
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