Pawn shop facts for kids
A pawn shop (also called a pawnshop or pawnbroker) is a shop or business who loans money to people who bring in valuable items which they leave with the pawnbroker. Examples of items that a person may leave are jewellery, gold, watches, cameras, musical instruments, televisions or computers.
The valuables that people leave are called the "collateral". The person can get their valuable item back from the pawnbroker if they pay back the money they were loaned and pay interest on the loan. Interest is like a fee for getting to use someone else's money for a set time period. If the person who has borrowed money from the pawnbroker does not repay the loan and interest within an agreed-upon time limit, the pawnbroker can sell the valuable item to another customer to get back the money they loaned.
To prevent thieves from using pawnshops as a way to get money from stolen goods, many communities have laws requiring that people who bring in valuable items to the pawnshop have to show identification, such as a driver's licence.
Images for kids
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A pawnshop business in Germany in 2014.
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A London shop displays the traditional pawnbroker's sign.
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Provident Loan Society of New York, a charitable pawnbroker
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Pawnbroker in Reseda, CA
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Pawnbroker's sign in Edinburgh Scotland
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Pawn shop in Changlun, Malaysia
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Pawn shop in Hong Kong
