Pawnbroker
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Basic Information

A pawnbroker is a money lender who makes (typically low value) loans against moveable property. Many pawn shops also directly buy used goods for resale, but the best profits come from the interest on loans, rather than retail sales, so that is usually the primary focus of the business. Selling items to a pawnbroker, or using them as collateral to get a loan from one, is usually called pawning or hocking, and items so pawned can be said to be in hock.

Process

In a nutshell, if you pawn something you're likely to be paid anywhere between 1% and 20% of the retail value of an equivalent new item. You then typically have a month to pay back about 120% of that loan if you want to redeem the item. A more detailed account of the process follows:

The borrower pledges an item to the pawnbroker who then lends them a sum of money equal to a given proportion of its value (as he assesses it). The borrower also receives a pledge ticket - typically numbered - as a token of the loan agreement.

The amount paid, regardless of whether the shop loans you money or buys your items outright, is typically a small fraction of the original retail price when the item was new. An item that sells for $1,000 new might resell from the pawnbroker to his customers for $100 to $600, depending on it's condition. Electronics and other that might potentially have hidden defects and turn out to be "lemons" will usually end up at the mid to low end of that scale, things like gold jewelry might be closer to the high end. This is the price the pawnshop will sell it at. Since they look to make a profit, they'll offer significantly less to purchase or as a loan, so anywhere between $10 and $200 for an item that retails for $1,000 new.

Rather than accumulate inventory, most pawnshops prefer to turn a profit on interest via items that are later returned paid for and reclaimed by their original owners. Which means that if the pawnbroker believes you're likely to return for the item you pawned, he'll offer you a larger loan. If you're selling him an item you'll never want again, he'll offer you next to nothing for it. If instead you're pawning a family heirloom that you'd hate to permanently part with, a much larger offer may be made.

When the borrower wishes to redeem the item, they repay the money borrowed, plus some sort of interest fee, and match the ticket against the item in question. If the loan is not repaid within an agreed period, the title to the goods devolves to the pawnbroker who then attempts to sell them to others. Most pawnbrokers will extend the terms (length) of the loan in return for a further fee.

History and Social Status

Given that the Mosaic law contains restrictions on pawnbroking, this may be one of the earliest forms of secured credit on the planet. Pawnbrokers existed in Ancient Rome and spread throughout the Empire. When the Catholics came to power, the business model was suppressed for some time, but was back in full swing by the Protestant Reformation. In the intervening years, Jews were not allowed to charge interest to other Jews, nor Christians to other Christians, so loans and banking often crossed religious lines.

The pawnbroker traditionally (or at least in Europe) operates under a sign of three "golden" balls arranged in a triangle. Depending on who you ask, this may be based on the arms of the Medici family - who were famous Italian bankers in the Middle Ages.

The pawnbroking business is generally bottom tier credit and deals with the poorest people in any given society, and is frequently characterised as exploitative (albiet usually on a level above that of the loan shark). Destitute characters may often be found pawning their furniture, cooking utensils and suchlike - although this is usually something of a dead horse trope in the modern era when such things have negligible resale value. In earlier eras, when such items were frequently hand-crafted (and Guild law sometimes complicated the ability of the common man to sell his belongings), this was somewhat more viable.

There are always exceptions - there are also pawnbrokers who specialize in luxury cars and suchlike, providing "invisible credit" for the very rich or for land-poor old money. Also, several British (and probably other) universities operated internal pawnbroking services known as hutches for the benefit of the students and staff.

Criminality

One morally dubious activity common to pawnbrokers is fencing. Since they traditionally ask very few questions, they have become traditional places for criminals to dispose of their loot, hocking it for whatever they can get and then failing to redeem it so that it is effectively sold to the pawnbroker for the loan price. Even an honest and above-board pawnbroker will occasionally find himself the unwitting participant in such an act. Historically the mechanism by which pawnbrokers acquire these goods has helped them avoid charges of receiving stolen goods as the goods were not willingly purchased (they were used as collateral on a loan and subsequently abandoned).

Pawnshops can also be a sort of "dead drop" trading system if correctly used, with or without the willing participation of the pawnbroker. For example, in places where trading firearms is legally complicated, a seller can pawn the weapon instead (usually with any associated permit) and then sell or trade the ticket to his customer, who later redeems the ticket and receives the goods without any visible trade taking place.

Modern credit regulations have cut back on these sort of things in most cities, but not completely eliminated it. In many jurisdictions, pawnbrokers are legally required to report to the police. This may be all transactions, or just certain types of items. They are often required to check IDs and serial numbers and keep records of who pawned what. In some jurisdictions they may only resell items after a reasonable delay period (90 days is not uncommon) to allow for potential victims to report robberies and burglaries to the authorities.

Sources

Game and Story Use

  • Obvious use: PCs looking for quick, invisible credit can hock their equipment.
    • Likewise a pawnbroker can act as a buyer for treasure in a modern or early modern campaign. Even more so for characters who happen to belong to a Thieve's Guild.
    • Note that if you're striving for a high degree of realism, the amount of compensation for such loot is going to be far below retail value of equivalent new gear. Anywhere between 1% and 20% of retail value for most items.
    • More scrupulous pawnbrokers are unlikely to take in "used and slightly bloody loot", and may very well notify the authorities about the PCs.
  • Given their need to dispose of a variety of items, pawnbrokers can also be a good source of (relatively) cheap second hand goods.
  • PCs looking for something stolen from them might do well to check local pawnbrokers. Subtle streetwise PCs may explain they are looking for "a family heirloom pawned by a distressed relative" rather than implying that the proprietor is a fence to his face.
  • Finding that the macguffin has been pawned in a distant city should be quite irritating. Especially if the ticket expires before they can get there…
  • A murder victim (either one the PCs create for themselves, or one they find) is in possession of a pawnbroker's ticket. Is it for the macguffin or merely for a silver teapot he stole a few nights ago?
  • Likewise they may find, steal be sold or given a pawn ticket and need to decide if it's worth redeeming.
  • Depending on the setting, a pawnshop might serve as a front for organized crime. If the PCs are new in town and looking to make a connection with the underworld, this is a possible place to make an introduction.
  • A "pawnshop of the damned" full of cursed items and "things man was not meant to hock" could make for interesting campaign premise or recurring location.
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