Before you hock an item to a pawn shop

Pawn shops are popping up across the country. In the U.S. alone, there are more than 10,000 pawn shops. As people struggle to make ends meet, many turn to pawn shops.

Pawn shops offer collateral-based loans, which means you bring an item in you own and if the pawn broker chooses, he or she will offer you a loan. The pawn broker will keep your item until you repay the loan. (The loan amount will likely be a small fraction of the item’s actual value.) If the loan is not paid within the set time period, the pawned item will be offered for sale by the pawn shop. According to the National Pawnbrokers Association, a typical pawn loan is less than $150 for 30 days. Pawn shops also sell items that have been sold outright to them by customers.

In 2015, your BBB recorded more than 750 inquiries locally about pawnbrokers. Nationally, there were almost 65,700 inquiries filed and more than 300 complaints with your BBB about this industry.

If you’re thinking of doing business with a pawn shop, your BBB suggests these tips:

• Do your research. Check online to see what others are saying about the pawn shops you’re considering.

• Know the value of items. If you don’t know the value, shop around and/or consider getting an appraisal.

• Negotiate. Before setting foot in the shop, know what price you’re comfortable with.

• Compare interest rates. Interest rates and fees on loans are capped or limited in most states. You could pay up to 25 percent interest for a loan depending on maximum rate set by the state you’re in.

• Inquire about loan extensions. If a loan can’t be paid back in time, ask what the fees are for an extended payment plan.

• Make sure your have proper identification. Most pawn shops require some form of identification and or paperwork to fill out. If a shop doesn’t require you to do so, it’s a red flag.

• Use a credit card when making a purchase. A purchase with a credit card is protected under the Fair Credit Billing Act.

• Check the return policy before buying an item.

• Read the fine print. Keep your receipts to verify payment and product.

If you’re doing business online with a pawn shop, make sure the website is secure. The URL should start with https://. Also, look for a small padlock icon usually located at the corner of the URL bar. These symbols tell shoppers a website is secure.

Remember, you can always contact your BBB for lists of BBB Accredited pawn shops and Business Reviews on ones you’re planning to use. Visit or call (937) 222-5825 or (800) 776-5301.

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John North is president of the Dayton Better Business Bureau.