With spring cleaning season in full gear, you might be eager to clear out some space and get rid of clothing that no longer fits your style or other gently used items around your house. If you’ve got some personal items you want to sell, read on to figure out the key differences between consignment shops and pawn shops.

There are three main differences when comparing consignment shops vs pawn shops:

  • When you give up ownership of your item
  • When the seller (you!) is paid
  • How the shop is paid

Item Ownership in Consignment Shops vs Pawn Shops

At a pawn shop, the item you use for collateral on a short-term loan is still yours all the way through the term of the loan. The pawn shop keeps and stores your item safely for you, but it still belongs to you. If you decide to sell your item outright or fail to meet the terms of the pawn loan, you give up ownership of your item to the pawn shop.

Consignment shops are designed specifically to sell your unwanted items directly to the public, which then earns you a percentage of the sale price. When you leave your items at a consignment shop, you are giving them immediate ownership of your stuff. If it sells, you receive a cut of the profits, while the shop takes the rest. If the items don’t sell within a specified time, which could be anywhere from 30 to 90 days, some shops may still try to sell them at a discounted price, or you can get the item back.

When You Get Paid

If you want to earn some extra cash for your unwanted items, but aren’t in a hurry to get it, a consignment shop may be a better option. If, however, you need that cash immediately, or you need the cash quickly but don’t necessarily want to sell your items, you’re better off going to a pawn shop.

With consignment shops, you receive money when the item sells. Depending on the store’s policies, you may be waiting 90 days or more to get your money. You also run the risk that if your item doesn’t sell, you won’t get paid at all. However, if your item doesn’t sell on consignment, you can still get your stuff back and then try to sell it another way.

With pawn shops, you get cash on the spot. When you visit the pawn shop, the employee will ask if you want to sell or pawn, so you have the option of selling your item(s) right then and there and walking away with your money. If you decide to pawn, you get the best of both worlds. You maintain ownership of your stuff and can use it as collateral for a short-term loan.

Getting a pawn loan is quick, easy, and hassle-free. Most loans can be done in minutes, require very little paperwork, are paid immediately and, unlike traditional loans, have zero effect on your credit. Once you repay the loan, usually within 30 days, you get your stuff back. You can even use it as collateral multiple times, as long as you repay each loan on time and become a trusted repeat customer. In fact, most pawn shops prefer to issue loans rather than buy or sell personal property, because it’s easier and more cost-effective.

How the Shop Is Paid

Consignment shops and their sellers get paid when items are sold. Generally, the consignment shop receives a percentage of the item’s sale price, while the seller receives the rest. Because consignment shops typically have standard store policies on how these percentages are charged, you should be aware of these terms and ask any questions you have before you give your items over for consignment.

By comparison, pawn shops get paid in two ways. First, if you pay back your pawn shop loan in full, the pawn shop earns interest on the loan. About 80% of all pawn loans in the U.S. are paid back in full. However, if you don’t pay back the loan on time, the pawn shop can then sell your item and keep the entire profit earned from that sale.

Consignment shops and pawn shops offer different advantages for people looking to make some money from their gently used goods. Hopefully these tips can help you determine which option works best for you, depending on your needs and personal situation. If you need cash quickly and have valuable items that you wouldn’t immediately miss, a short-term pawn loan could be a great option for you.

At Gene’s Jewelry & Pawn, we specialize in treating customers like family and offering you the best prices for your items. For more than 30 years, we have provided our customers with the high level of service they deserve. Visit one of our locations in North Charleston, Moncks Corner or Goose Creek, SC, today and see how we can help you. Or visit us online to see some of our outstanding items for sale or to get a free estimate for your items!