In our last post I talked about how pawn shops determine what to pay or loan on general types of merchandise items like tools, electronics and computers. If you haven't taken a look at Part I you will find it here: http://www.bestdealgunandpawn.com/blog/how-do-pawn-shops-decide-what-to-loan-or-pay-for-something-part-1

PART II – Firearms

So the process used to determine the value of a firearm is more involved than what we were looking at in Part I with general types of merchandise. The first step is to verify the firearm is NOT LOADED!!!

Please check your firearm before you leave your home and make sure it is not loaded. If you don't feel comfortable doing this then place the firearm in a case or if it is a long gun and you don't have a case for it wrap it in a blanket and place it in your vehicle. KEEP YOUR FIGURE OFF OF THE TRIGGER AT ALL TIMES!!!! When you get to the pawn shop leave the firearm in the car and go in and explain the situation. If they do not offer to come out and get the firearm for you then ask them too politely. Simply explain that you no absolutely nothing about firearms or firearm safety that your not certain that the firearm is unloaded and you do not feel comfortable with handling it. If they can't or won't come out and check the gun for you outside and you don't want to risk handling it yourself then go to another store and repeat the process.

The second step is to identify what you are holding just as with anything else. The manufacture, model number, caliber and ammunition capacity.

The next step is to evaluate the condition. Is the firearm clean, does it look like it will function reliably, is there any rust or is it missing any pieces. If your gun takes a magazine you need to have it, don't leave it at home. We would then check the action. Does it cycle smoothly, if it is a revolver does it lockup tight is the timing good. Finally a general evaluation of the overall condition of the firearm and who or what type of buyer would want this gun.

NOTE: It is always a good idea to clean your gun, if it needs it, prior to bringing it into the pawn shop.

I know what you are thinking, “I don't want to sell it I just want a loan.” Again, for a Pawnbroker there really is no difference we have to evaluate everything as if we might have to sell it. Even if we are only using your firearm as collateral for a loan. Unfortunately, things happen and the loan might not be able to be repaid or extended and we may have to sell the firearm to satisfy the loan.

So after determining what we are holding and its current condition as well as what type of buyer might want it. We can now start the process of determining what the value of the firearm is. For the pawn shops purposes the value is what a ready buyer will pay for the item. Once the pawnbroker knows this they can determine what they can loan on or pay for your firearm.

So the first resource we check is one that is not usually readily available to the average person. This would be the Blue Book of Gun Values you can purchase a copy at most local book stores or on amazon. You can get your own copy here:

With this resource it is pretty simple you simply locate the firearm by looking up the manufacture and the model of the firearm. This can be quick or it can take a few minutes but once we locate your firearm in it the Blue Book will give us a retail value based on a percentage grade of the firearms condition. This resource is also very helpful with other types of information about a given firearm, like production numbers and a detailed description of the firearm. What finishes were available, what grips or stocks. What different calibers were made and which of those are the most valuable. This is our first resource for determining a firearms value but we don't want it to be our only one.

Ideally we would like to know what ready buyers are actually paying right now for the firearm in question. This brings us to our next resource and it is free or almost free. Meet GunBroker.com this is basically eBay for firearms. You can find almost anything gun related on this website. However, there are a few things you need to know. First GunBroker.com's search feature is not as forgiving as eBay's. It won't automatically correct for misspellings so be certain you are entering everything correctly. Secondly, to get the information you need you will have to be a member of the site. This requires you to register and there is a fee of $1.00. They do this so that they can confirm who you are, at least that is what they say. I am sure it also keeps the spammers out as well. You can visit them here:

http://www.gunbroker.com

If you don't want to register you can still perform searches on the site and that will allow you to look at current listings. So you can still see what people are trying to sell their firearms for and you can look at current auctions. Sadly, this won't tell you what you really need to know and that is what are firearms like yours selling for. We learn this by searching completed listings GunBroker.com does not make this real easy to find so I will do my best to walk you through it. First log into your account then at the top of the page you will find the “Search Box” next to it is the word ADVANCED click on it. This will take you to the advanced search options page. Just under the words ADVANCED SEARCH you will see two tabs the default selection is current items and the tab next to that is COMPLETED ITEMS. That is the one we want so you will need to select it. Now you can enter the information about your particular firearm and find out what they have sold for in the recent past. Don't forget to un-check the Factory New and New Old Stock boxes. This will give you irrelevant results since your firearm is not new. I believe that GunBroker.com only allows this search to go back 90-120 days or so. But that is really all you need provided you can find your firearm.
Once you have a list of guns like yours you can begin the process of reviewing them. Ideally you want to find several that are in a consistent price range. Be honest in your evaluation, I can promise you the Pawnbroker you are dealing with will be. Overstating the condition of the firearm may lead you to the conclusion you want but it won't get you the money in your hand and may set you up for real disappointment when you visit the pawn shop.

Now that the pawnbroker has a retail value for your gun they can tell you what they can loan you or pay you. If you want a loan just tell them how much you need. They will either do it or they won't and they should be able to explain their offer to you. Generally the biggest reason they can't loan you what you want is something customers almost never consider but a Pawnbroker has to and that is interest charges. If you aren't able to satisfy the loan or make the interest payments then after 60 days, in the state of Florida, the item can be forfeited and sold to satisfy the loan. Since interest is due every 30 days that would be two periods of unpaid interest and this would increase the “cost” of your firearm to the Pawnbroker. You get $100.00 loan and never reclaim your firearm. After 60 days the Pawnbroker can sell it to satisfy the loan. But it isn't just $100 loaned to you, they are also out the 2 months interest that wasn't paid which in Florida would equal another $50. Therefore, the real cost of your firearm to the Pawnbroker is $150 and not the $100 they handed you.

If you are selling then generally you can expect to be offered $100-$125.00 under what your firearm is selling for on GunBroker.com or is valued at in the Blue Book. GunBroker.com takes precedence, if the Blue Book says the firearm in 60% condition is worth $400.00 dollars. But firearms like the one we are holding are selling for $300.00 on GunBroker.com then I am going with the latter. Using this example, a Pawnbroker would offer the owner $200.00 for the firearm.

Please keep in mind that there are other considerations as well that the Pawnbroker must weigh. Does this firearm sell well online, is it in high demand, do they have the right type of customers coming in to buy his type of firearm. These considerations will also effect the price they offer you if you are selling your firearm.

We should mention that there are other gun selling and auction sites on the internet. They can also be a resource if you can't find the information you need on GunBroker.com. However, none of those other websites, as far as we know, allow you to search completed listings to see what specific firearms actually SOLD for.

Just a reminder, if the pawnbroker you are dealing with does not make you an offer you are okay with then simply decline the offer and move on to another store. I can promise you it is not personal. The pawn shop is loaning or buying the item only. This is not a personal rejection of you or even your item per say they just may not be really interested in that type of merchandise. Either way you can simply move on to another pawn shop.

Part III will be about……. Jewelry!! Yeah, Jewelry!

We are constantly asked how do pawn shops determine what to pay for stuff or how much to loan on an item. Before we can determine what to pay for something or loan on it we first have to determine what the item is worth. The truth is that there are several sources to determine the true market value for an item. The source or sources we use depends upon what type of merchandise we are dealing with. Jewelry, firearms or electronics each of these very different items require the use of a different source of information. We thought we might put a post together giving some information on how we go about it. We will divide this up over a series of posts at least two and possibly three.

Part I

Back in the day if you were going to be a successful Pawnbroker you had to have a well rounded knowledge about many different types of items. Things are much different today because like every other industry in the world the internet has changed everything. Now there is no need to be an expert on the value of everything. You can find whatever information you want on the internet. You just have to know where to look.

Electronics, Tools and General Merchandise

Well no real shock here, the best source for the value of one of these types items is eBay. Many people walk into our shop and say well this item I need a loan on is selling for $400.00 on eBay and I need to get a $200.00 loan. Well on the surface that probably seems reasonable, but is it?

Most people go to eBay and enter in the name of their item or a description and check out the items that come up look at the prices and think wow look what they are selling for. I should be able to get what I need no problem. This is the first of several mistakes. The prices that come up on eBay when you do a search is not what people are paying. These prices are what people are asking or what a current auction is at that moment in time. What we need to look at is not what these items are selling for but what people are actually paying for them.

Fortunately, eBay makes this very easy for us. Over on the left hand side of your browser window is a whole series of check boxes. These are there to “refine” your search the one we are looking for says sold items. You want to check that box to see what this particular item actually sold for. If you are using an app on a smart phone or tablet you may have to do some digging to find the option to look at sold items, it is in there somewhere, usually under the search refinement options.

Once you are looking at sold items you can then begin to look at other factors. Condition is always important, do you have the original box and/or paperwork? If it's a TV or DVD player do you have the original remote? If it is a notebook or tablet computer do you have the charger? How clean is the item? All of these factors effect the final value of the item.

The general idea is to find something as close to what you have as possible. This will give you an indication of what the item is really worth. You also want multiple examples, that way you can see what the item constantly brings. If you find five examples and one sold for $350.00 and the others all sold around 150.00 you can't really expect to get a $200.00 loan.

This is just one example of how pawn shops determining the value of certain types of merchandise. So the next time you are heading to the pawn shop to sell something or get a loan, before you go, do some research yourself. This way your will have an idea of what the item you're bring in is really worth.  While this won't tell you what the pawn shop might pay or lend you, it will let them know that you've done your homework and know the value of your merchandise.

Typically, the pawn shop is going to offer about 1/3 to 1/2 of the average selling price you might find on eBay. There are a number of reasons for this and the person behind the counter should be willing and able to explain in detail why they are making you the offer that they are. If what you're hearing from them doesn't go along with the research you've done or make sense to you then be polite and move on to another store.

Our next post will be about firearms and how you can determine market value for them.