If you’re in the market for some jewelry, and you don’t want to spend a fortune, a pawn shop might be a good place to consider. However fun that may sound, it is important to be aware of the risks involved in buying jewelry from a pawn shop.
Many people get ripped off every year because they don’t know what to look for or how to verify it.
When we think of buying a “used” piece of jewelry, we often think of going to a pawn shop because, well, why not?
If used (or pre-loved) is what we are after, they have a ton of it there.
Pawn shops, it would seem, will be much cheaper than a jewelry store, even if the jewelry store has a section offering “estate” jewelry among the new.
In this article, we’ll expose the ins and outs of buying jewelry at a pawn shop and provide some tips on how to find good deals at a pawn shop.
We’ll also explain some of the common things that can go wrong. So read on, and while heading out the door to shop, grab your loupe and don’t get ripped off!
Table of Contents
Is Pawn Shop Jewelry A Good Deal?
Pawn shops can, theoretically, be a great place to find deals on jewelry.
You are going there specifically to find good deals and don’t mind the fact that those items were previously owned, right?
After all, they hardly pay anything for the melt value when you go to sell, so you would think they would be selling at a discount. Well, that is not always the case.
In fact, most of the time it is quite the opposite when it comes to jewelry.
However, there are instances where a pawnbroker does not properly value the pieces they put out for sale and end up making a mistake.
Example: Someone we know went into a pawn shop to buy a heavy gold chain that she wanted for a pendant that we had sold to her.
Our chains were all new and so the cost did not match her budget. So she headed to a pawn shop and came back to show us an antique filigree ring instead.
Say what??
Well, turns out that gram for gram, the 14k gold chain that she found used, cost the same as one of our new ones. However, to her delight, she found a ring that was priced rather low simply because the pawn shop owner thought it was “funky looking” and was only charging double the weight of gold value.
After cleaning and polishing the ring for her, she was thrilled because she ended up with a ring that would have cost her fourfold what she paid, because it was an Art Deco Era ring that was quite lovely.
Can Pawn Shops Tell If Jewelry Is Real?
Oh yes, they had better be able to!
If they don’t have a keen understanding for what is real, then they won’t be in business very long unless they stick to tools, bikes and guitars.
Pawn shops usually have someone on staff who is well trained in identifying precious metals and gemstones and knows how to test for them also.
They cannot afford to loan money on bogus items and they cannot afford to be fooled by bogus certificates.
If someone were to bring in a diamond ring with a certificate, and it has had the diamond replaced with a CZ, then the pawn shop would soon be in trouble given that this sort of thing is not uncommon at all.
How Much Cheaper Is Pawn Shop Jewelry?
Many people assume that jewelry at a pawn shop will be cheaper than at a jewelry store, and while that may be true in some cases, it is not always the case.
In reality, it depends on what the items are.
Let’s look at a few:
- Gold…real gold. Pawn shops will lend at far below spot price, that is, the market price that pure gold is worth on the day that someone brings their item in. They will then turn around after the pawn ticket expires and sell it far above the spot price to make profit. Gold markets change and go up and down, so a pawn shop will try for as high a price as possible depending on if they bought when the market was high or low. You may be walking in to buy when they are trying to peddle items that were bought too high and the price they want for them will reflect that.
- Ask About Their Rates. They also know that people “think” that they will be far cheaper, therefore they take advantage of ignorance and their prices reflect that. If you ask them to weigh a chain, and ask what they are charging for the gram weight, you may find them sputtering some nonsense to justify the prices and might get them to drop their price by about 10%, but that is all.
- Knowledge. Pawn shops, because they do have someone on staff that knows gemstones, will also know if the gemstones are popular or not, or if they are as valuable or rare than others. Pricing will reflect this. If you look at the price for a peridot ring, or a pearl ring, it will be much lower than for even a bad ruby ring. This is because those stones have fallen out of favor, whereas people still want rubies and cannot tell a good one from a bad one.
- Dirty Gemstones. Pawn shops will do well to CLEAN their jewelry before the put them out for sale. But because some are lazy or don’t have enough personnel, they sometimes don’t. You may be able to get nicer quality diamonds if they are dirty. Yep. Actually, the same goes for colored stones too.
- Sterling Silver. Pawn shops will not typically take in sterling silver jewelry that is light weight because they don’t usually loan on such items. If you do find items that are sterling silver in a pawn shop however, it will more likely be sterling silverware, serving pieces or fancy sterling candlesticks holders. You can even find silver coins. Sterling silver jewelry would have to be attractive, very heavy weight and this would make it chunky. If you find sterling silverware, a pawn shop employee will go on eBay to search the going prices for the pattern or style to see what it is worth. They may compete with that price or even ask for more. Do your homework before purchasing.
Common Problems With Pawn Shop Jewelry
So you are going to shop for jewelry at a pawn shop and come prepared, bringing your loupe and gram scale to make sure you are getting a good deal.
Good for you.
Ignoring the stigma of buying from a pawn shop can work quite well for you, but here are a couple things to watch out for.
Check For Damaged Gemstones
Jewelry that has tiny flea bite chips on the girdle of precious gemstones. These can be hidden under a prong or under the folds of a bezel setting. Bring your loupe!
Broken/Defective Clasps
Unless you try out the clasps and notice that they are broken, then you must know the price of a new clasp as well as the labor to change it. Your savings can end up costing you more than you realize. Clasps are very expensive and pawn shops do not do repairs on jewelry when they take them in.
Dirty Gemstones
While a pawn shop may clean a gemstone because they suspect that it is high quality simply because an Appraisal accompanied it when they took it in, they may also leave some diamonds and gemstones uncleaned and a bit grimey in an attempt to hide their bad quality.
No Refunds
You bought it, it is yours. End of story. Pawn shops usually do not give refunds or exchanges on any items, no matter what the reason. You may be able to negotiate a lower price if you find something wrong with it before the sale, but that will be at the discretion of the pawnbroker. Basically, unless a pawn shop gives you a written guarantee that they will refund, they won’t.
What To Look For When Buying Jewelry From A Pawn Shop
First thing that you want to look for is reputation.
Are they overpricing?
Will they work with you a bit if you find chips or problems with an item that you buy from them?
Ask them if they will, and get the name of the person who confirms this to you if they say they will. You may not get your money back, but you may end up with a store credit instead.
To be fair, you are not going to want to discriminate against a pawn shop’s clientele. This is because the quality of clientele really has nothing to do with the items inside that are for sale.
If you see tweakers bringing items in, ignore that. There could be a severe economic downturn in an area, or people fall on hard times or even lose their jobs for many many reasons.
It could even be you at some point.
Pawn shops have very strict laws which govern their business to protect themselves, the public and the bearers of items being brought in to sell from fraud.
Here’s what to look for instead:
Understand The Jewelry Markings
You are going to want to be sure the metal content that you are buying is real.
Given that there is not likely going to be costume jewelry, you still want to be sure that there is some way to identify the gold content, like a hallmark.
Before you set out to shop, go online and look at the many different ways that gold, silver and platinum can be hallmarked and know where to find the marks on various items.
How To Spot Fake Diamonds
It is unlikely that jewelry that is for sale in a pawn shop has fake diamonds in them.
Realize that a pawn shop is in the money loaning business and will only loan money and take in the collateral on items that they are good at being stuck having to sell should a person default on the loan.
Fake just doesn’t cut it and they will simply not pay for it.
They will have diamond testers at the ready, so if you want double verification, either bring your own tester, or ask them to test in front of you using theirs.
If a piece of jewelry has moissanite diamond in it, then this will be quickly identified also and it will be disclosed and clearly noted.
Pawn shops have reputations to guard too.
Rarely, a piece of antique jewelry may have real gold or platinum but will have synthetic colored gemstones in them too. These were used all the way from the late 1800 to make jewelry more affordable.
It is up to you to ask the pawn shop if you suspect that this is the case with an antique piece of jewelry, or you will need to learn to identify these on your own.
Bringing in your own loupe will also quickly dispel a fake diamond simply by the inclusions that you find in them.
If you do find antique jewelry that has real gold or platinum but also has fake stones, then the value is still likely far higher than a modern piece with fake stones would be.
Bring A Magnet
Because people can make mistakes, it does not hurt to bring a magnet along with your loupe to be certain that an item is authentic.
It is rare, but you will want to be prepared for mistakes because you won’t be getting a refund when you buy from pawn shops.
A strong earth magnet makes a good tester for gold, silver and platinum because those metals are not magnetic. The exception is that clasps on bracelets and necklaces contain springs made of steel and will be attracted to a magnet.
Place the magnet on top of the piece in question, and if it is attracted to the magnet, then it is not real. If you do this test and the result is positive for attraction, then ask to see a different piece and know that they have at least one fake item in their inventory.
Tips For Buying Jewelry At The Pawn Shop
Aside from things to look out for, did you know that there are actually better times of the month to look for jewelry at a pawn shop than others? There is also the opportunity to negotiate and get a better deal on an item if you are patient and know how to do it. Here are some tips:
Best Time To Buy Jewelry From A Pawn Shop
When is the best time of day/day of week to visit your local pawn brokers in order to find the best deals on jewels and other goods? 1st of the month, because rent is due, and mortgages are due by the 15th.
New jewelry comes in a few days before these dates.
- During economic downturns in your area. Hard times due to mass layoffs, wildfires, weather patterns that stop or hinder shopping, or business closures mean that more people will need to let go of their nicer jewelry and may not have the means or a way to sell themselves.
If you ask the pawn shop when they typically put out more jewelry items, that may tell you when these times usually occur because they are in business to sell items that were defaulted on.
There is an algorithm for when people bring in and default on their items, and pawn shops have first hand knowledge about when they are most likely to set those items out for sale.
Ugly Jewelry
Pawned jewelry may also be found to be cheaper if an item is unattractive and generally not typically what people want. These will sit collecting dust out for sale until they are finally discounted. You can ask if and when a shop marks down items that are for sale too.
Can You Negotiate With Pawn Shops?
Pawn shops have a profit margin just like all other businesses do, and their margin is probably not as narrow as a grocery store or a gas station, so there is room to negotiate.
While you would never think to negotiate with Wendys for their newest BBQ Bacon Cheeseburger, you can always try out your negotiation skills with Pawn Shops and even with Jewelry stores.
They also have slow seasons and those would be the best time to do negotiations along with just before the 1st of the month when bills need to be paid.
Final Thoughts
Pawn shops can be a great place to buy jewelry if you know what to look for, what questions to ask, and how to negotiate. By following these simple tips, you can avoid getting ripped off and find some amazing deals on beautiful jewelry.
Be extra creative when going for “used” jewelry.
If you find a ring that you like the mounting, but hate the center stone, then you can have the stone changed.
While you shop, keep in mind that jewelry can be altered.
The same goes for chains.
If you find a chain that is too long, you can have it shortened and the extra gold will likely pay for the labor to do so.
If you find a bracelet that is too long or too short for your wrist, you can take that to a jewelry store and they can make a pair of earrings from the extra links or can add a few heavy jump rings to make it long enough.
Happy shopping!