Money Makers: Online Pawn

Shows like the History Channel’s “Pawn Stars” have made pawning even more popular than ever. But, going online to pawn your valuables can be tricky.  George Souri, CEO of UltraPawn.com, and principal at private equity firm The Atria Group, offers the following tips for pawning online:

1 – Jurisdiction and Physical Presence: Some online pawn shops operate outside the U.S. or on Indian Reservations, and are not, therefore, subject to U.S. law. Domestic pawn customers should confirm where a site is operating from and stay away from those sites that are not subject to U.S. law and the Truth in Lending Act. Also, consumers should be weary of online pawnbrokers that operate without an address. Having a physical location gives the customer something tangible to hang her hat on.

2 – Process: Many online pawnbrokers may not clearly inform the customer as to the company’s loan or sale processes. For example, getting a loan may be straight forward enough, but the company might fail to publish information on the redemption process. Prior to entering into a pawn loan, a customer should be sure to understand the entire process, including the payment and redemption (in the case of a loan) processes, and should only deal with pawnbrokers who clearly explain their procedures.

3 – Assurance: With respect to the retail side of the pawn business, customers should be sure that the items they purchase are guaranteed to work as stated. If a pawnbroker is selling something in “as-is” condition, this should be clearly stated by the pawnbroker.  Otherwise, the customer should ensure that the pawnbroker offers a guarantee on the item for sale. If everything the pawnbroker is selling is listed in “as-is” condition, customers should be cautious – this could be a sign of a retailer who does not stand behind their merchandise. As to the buying and loan side, sites that offer a price guarantee are preferable to those that do not. By offering a price guarantee, the pawnbroker is signaling its confidence in the offer it is giving to the customer, and the customer is assured that if they find a better a deal, it will be honored. In sum, the more willing a pawnbroker is to stand behind the products and services it offers, the better.

4-Finance Charges: Customers should fully understand the finance fees being charged by the pawnbroker. Customers should ask if there are pre-payment penalties, or any hidden fees (e.g. storing or shipping). Customers should avoid any pawnbrokers that charge hidden fees.

5- Communication: Finally, customers should test a pawnbroker’s communication and customer service before entering into a transaction. Does the pawn broker respond quickly and in a helpful manner? Is there a clear contact person for different issues? Can you communicate by phone or just email? Customers should only do business with pawn brokers who are responsive and attentive.

Ultrapawn.com, the first online pawnbroker to feature a full service retail shop, offers a safe and convenient online destination to exchange personal assets for loans at the lowest interest rates available. For more information visit Ultrapawn.com