SUNDAY FEATURE: Eight tips Guyanese must consider before pawning prized jewels
Every day, many Guyanese are in need of temporary, small-dollar loans which are not available from banks or traditional lenders.
With the success of pawnshops over the years in Guyana, citizens are discovering that most modern day pawn stores are legitimate and friendly businesses that serve consumers from all walks of life.
Yet, many Guyanese are still unclear on what pawnshops do and how they actually work.
Hoping to get the true worth of your jewellery at the nearest pawn shop without a basic understanding of all the legally registered competitors and the market is too much of a big risk.
Every consumer should never lose sight of the fact that business knows no sentiments and it is your responsibility to ensure that you are equipped with enough data to make the most informed decision.
Over the years, the pawnshop has served many as a convenient means of getting a quick loan without the hassle of filling too many forms. One’s credit history does not even come into question.
But the unpredictable fluctuation in the price of gold is just another reason to ensure that you very informed so you can receive the best price for your jewels even in a financial crunch.
The pawnbrokers are not the only ones that are affected by the falling prices.
A wide cross section of the commercial industry has complained about the economic strain it has placed on some businesses to maintain its profitability while struggling to avoid huge losses.
According to an article by Julian Jessup, head of commodities research at Capital Economics in London, England, he said that he expects that the gold prices would stabilize soon.
Jessup said, “Our gut feeling is that gold probably will find a floor fairly soon. A lot of the factors that have undermined it recently are probably a bit overdone.
“But, equally, we don’t expect it to return to anywhere near the highs where it has been over the past few years because that was very much pricing in the prospect of a worst case with a global hyperinflation or the possibility of a complete breakdown of the financial system and I think those fears have passed, too.”
With those thoughts in mind, before you hurry to pawn, keep these tips in mind.
-Worth: Sadly, most people do not know what their gold is worth. In this case, it is advised that before you carry your jewels to a nearby pawnshop in a hurry; get it weighed at a reputable jewellery store to ascertain its karat and the worth. This gives you an idea of what you can take from the pawn shop of your choice.
-Hesitate to settle: If you have the time, check other pawn shops. Rarely will you find the same pawn shops offering the same price. So ensure you take some time to find the best possible offers for your jewellery.
-Interest rate and hidden fees: Even though you may have secured a good price for your valuable jewels, you must also be wary of high interest rates and hidden fees. Consumers often complain of facing this situation. In some cases, the interest rate may be low but there are hidden fees for storage so ensure you ask before falling prey to the guise of a flashy price for your jewels.
-History: Don’t be afraid to ask these businesses of how long they have been in the industry and if they have other locations. It is important to ensure you are not being swindled by a fly-by-night entity. If they suddenly close shop, it would be almost impossible to retrieve your jewels. It is advised that you pawn your prized possessions with reputable businesses that have been established for several years and have a relationship with people in the community. If possible, seek a company that has multiple locations. This is often an indication of financial stability.
-Insurance: It is important to ensure that whichever pawn shop you select, that it is insured. This protects your jewels in the case of burglary, fire or if it simply goes missing. Only a fully-insured pawn shop guarantees a patron the ability to receive payment for an item if something happens to it. A written statement of the pawn shops insurance policy should appear on the paperwork you’re given when you sign.
-Paperwork: Although pawn shop laws vary in several ways, it is almost standard for all to require some form of identification. If a shop doesn’t ask you for identification and request that you fill out the proper paperwork, it’s a red flag that the shop might not be reputable. You’re supposed to get a copy of all the documentation they required, as well as a detailed description of the items you pawned and their value.
-Maximum value: Be wary of a shop that is trying to encourage you to take out the maximum you need. If you only need $20,000, but the pawnbroker is pushing you to take out $50,000, then all they want is to collect on additional interest payments from you. If you take out more than you need, it’s easier to default. Some pawn shops are looking to bury you in debt so you can’t come back to retrieve your item. If possible, look for a pawn shop that keeps up with current gold and silver prices.
-Notifications: It is understandable that some people forget payment due dates. It happens to the best of us. So find out if your pawn shop extends the courtesy of calling to remind you of your deadline.