Pawn shops are a viable option to consider for those looking to buy gold and other precious metals. They share many of the less-than-desirable aspects of specialist coins shops when compared to online gold dealers, but don’t offer as many of the benefits. However they do have some of their own unique advantages which this article will highlight.
Advantages of Pawn Shops for Buying & Selling Gold
One of the biggest factors in the favor of pawn shops for buying and selling gold and other precious metals is their ubiquity: there are lots of pawn shops. In most areas there will be more pawn shops than specialized coin and gold dealers. This means your options will be wider and the number of places to look for a good deal will be greater.
Another feature of pawn shops that can work in your favor is that they may not be very knowledgeable in the area of buying and selling bullion. This could lead to them selling on items for prices much lower than you may find elsewhere due to them not recognizing the value of what they have.
Alternatively, in their failure to understand the value of what a customer is trying to sell, they might offer a higher price than a knowledgeable dealer would. While this is rare, it does happen from time to time.
For those wishing to sell their bullion, there is often a greater chance that a pawn shop will decide to make the purchase. This is because buying from the public is one of the key parts of the pawn shop business model. While nearly all specialist gold coin shops will buy from the public, they may have stricter requirements on what they buy such as coin type and quantity.
As well as the above advantages which are specific to pawn shops, there are also some benefits that they share with dedicated coin shops. These include customers being able to see the items in person before deciding whether to buy or not, not having to wait for delivery of the items and the ability to remain anonymous by paying in cash.
Disadvantages of Pawn Shops for Buying & Selling Gold
When it comes to buying gold at a pawn shop there are a few disadvantages that could prevent you from getting a good deal. Like other shops, pawn shops will be hard pressed to compete on price with online retailers and for that reason there is a good chance you won’t be offered the best prices.
As pawn shops sell other items apart from bullion, it is highly likely that they will have a smaller selection of precious metals than the large online stores and dedicated coin shops. A smaller inventory means less choice for consumers which can either prevent them from making a purchase or force them to buy something less appealing to them.
For those who wish to sell their gold coins and other items of bullion, pawns shops may not be the best option. Despite the high chance they will make an offer, in many cases they will not be as knowledgeable in the area of coins and therefore may unwittingly offer an unfair price. There is also a chance they might not recognize what is before them at all and decline the item due to a lack of knowledge of coins.
Pros and Cons of Pawn Shops for Gold Buyers
While in most cases it will be easier to find a pawn shop than specialist gold and coin shops, and it is likely there will be more of them, they aren’t always the best option for the personal gold investor or dealer. In summary, here are the pros and cons of using a pawn shop to buy and sell coins:
Pawn Shop Pros:
- Easier to find than specialist gold shops
- Instant transaction, no waiting for delivery
- Can inspect the goods in person before buying
- Remain anonymous by paying in cash
- Possibility of finding a bargain due to them not recognizing they have an expensive or rare item
- Chance they might pay more than the going rate due to lack of knowledge
- Higher chance they will buy as this is part of their core business
- Good chance you can buy back anything you pawn
Pawn Shop Cons:
- May lack specialist knowledge about gold and coins
- Usually less stock than specialist shops and online retailers
- Higher prices than online dealers
- Uncompetitive prices for those selling gold
When comparing pawn shops and specialized gold shops, in most cases the specialized gold shop will be a better option for those looking to source bullion. However, due to their more frequent occurrence, pawn shops can be easier to locate and for some, might be the only option. While they may not be the best option, a pawn shop that specializes in coins can be a great alternative.