Sunday, April 10, 2011

Why do Things Cost so Much at Pawn Shops?

Aloha everybody!

Before I get too far into this, I will admit that I have bought my fair share of pawn shop guitars, but lately I am baffled by how much pawn shops charge for their merchandise.

Historically, pawn shops have been good places to pick up used equipment cheap, but over the last 10 years or so, it seems like their pricing has become unrealistic. Keep in mind I am located near Los Angeles, which might not be the best indicator of what is happening in the real world.

For example, it is not uncommon to go into a pawn shop and see a beaten-to-death Mexican Stratocaster for $499. Well, I can buy the same guitar (brand new) from Musician’s Friend for $499, with free shipping and no tax. Or a nice used on eBay for under $300.

I run into the same issue with their tools. You can buy a pawn shop Sawzall that looks like someone butchered a cow with it for $120, or buy a new one online for $99.

And guess what, you get no warranty with these items, and pawn shops do not usually have very friendly return policies.

Maybe this is why the inventory at the pawn shops around me rarely changes.

Is there something else going on here? There must be, but I do not know exactly what it is.

I am reasonably sure that most of the money pawn shops make come from their loan business, and any items that get sold out of pawn are a bonus to them. Maybe having lots of cool stuff on the shelves and hanging on the walls draws more customers in off the street.

If you do find a guitar or amplifier you want to buy there are a few things you will want to do:

1. Find out exactly what model you are looking at, and research what they are really selling for on eBay.

2. Inspect it carefully looking for replaced parts or modifications. These never help the value of musical equipment. If you want to look inside borrow a screwdriver (pawn shops always have tools), but put it back the way you find it. If you do not know what you are doing, do not eff up their merchandise. Pawn shop guys do not have the greatest senses of humor.

3. Use it for awhile in the shop to make sure it works correctly.

If you are not able to do any of these 3 things, or if you know the sales guy is lying to you, walk away. There is a lot of other used equipment out there to buy.

If (after all this) you decide to buy it, you will have to negotiate them down to the usual market price. The only way to do this is with cash. Credit and debit cards charge the merchant extra fees, and provide an unwanted paper trail back to them for taxes that they may not be paying. Keep in mind that they can check prices on eBay too, so don’t try to bargain them down unreasonably.

Good luck!

By the way, I think the best deals in pawn shops are their used DVDs. Usually you can get good-condition DVDs for 2 or 3 bucks, and often times you can find older titles that are no longer available in stores. Check them out…



  1. Totally agree Rex. I often stop into pawn shops and am totally surprised with the price of their used items. It's not even a good starting point. I don't think they sell much stuff either.... the ones I walk by all the time in Torrance seems to have the same stuff on display as last year.

  2. Hey Eric. I always stop in that one on Sartori when we go to La Capilla, and they never have anything new.

  3. Yep that's the one. There are three in that area.... mostly all crap. ;)

  4. Another reason that people rarely find the "Pawn Shop Prizes" used to be great used finds that is that they've been supplanted by eBay and other online sales, both by companies and private person-to-person. As someone who has both sold and purchased basses online and in conversations with others on this topic, the general thoughts are "Why should we sell to a Pawn Shop or Guitar Center who will lowball on the prices as they need to make a profit on their end when we can buy/sell from Player-to-Player on various sites and get both a better deal as a buyer and a higher profit as a seller". As I've been able to upgrade my basses and other gear from "midrange" quality Ibanez, Yamaha & others to "high-end" Spector & Mike Lull by selling off the midrange for more than I'd get offline as well as finding great deals on "barely used" high-end gear from private sales. In my estimation Pawn Shops and GC used gear is now the mainly the domain of either the "Too Young/Doesn't Want To Learn To Sell Online" or the Stolen Gear/Addict Crowd, with the Legitimate Players drifting in-and-out for the rare Great Deal.

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