There is a common myth that people believe in about pawn shops: that they are shady places selling mostly stolen goods. This is not entirely true. You may wonder how pawnbrokers are able to tell whether the items being handed over to them are stolen or not. The logical thing is to ask for receipts as proof of purchase but most people don’t keep their receipts because they do not buy gold jewellery with the intention of selling it somewhere down the line. Sometimes, the gold might have been gifted in which case there won’t be a receipt for it. So, bottom line: pawnbrokers will not ask you for receipts but they will ask you for a copy of your identity document. This is a legal requirement in the pawn industry. However, more recently pawnbrokers have been using the worldwide web to check databases of gold jewellery that has been reported as stolen. Brand name jewellers also put security features on their pieces like serial numbers, people who get valuables with such serial numbers stolen from them can then report it. For example: luxury brand watch manufacturers like Rolex put unique serial numbers on their watches. They have a database where they list watches that have been reported stolen by owners. So when pawnbrokers are presented with a Rolex, they can check whether or not the watch at hand is not on the list.
Why is it important to validate that an item has not been stolen?
Reputation is important to pawnbrokers running legitimate businesses and customers, pawning, selling or buying goods from pawn shop. Pawn shops provide an important service to their communities and to be successful, they need to build trust. However, remember that they aren’t obligated to make any offers on items whether they are listed as stolen or not.
Not everything that is valuable and pawnable is accepted. Pawnbrokers take items they know they can sell quickly like jewellery. Unfortunately, most of these items are things that are commonly easy to steal.
Pawnbrokers rely on repeat customers. It is common for people to pawn and redeem the same item over and over again. A pawn shop business relies a lot on referrals, world-of-mouth from friend, family and colleagues and most people are going to promote a business with questionable ethics. This is why pawnbrokers will make every effort to keep stolen goods out of their shops. They will gladly work with law enforcement to ensure that thieves stay away from their businesses.
Before the emergence of computers and the evolution of the world wide web, pawnbrokers could only judge a customer by his appearance and relied on their gut feeling. There were no other resources to help verify that they were dealing with honest, legit customers, not thieves. Things began to change in the 90’s with email being used by law enforcement to disseminate lists of stolen goods and descriptions of suspected criminals that pawnbrokers could use to check if they were being sold stolen items. Today, the system is much better especially with jewellery brands keeping serial numbers of their products as well as personal records of buyers. A Pawnbroker are now able to keep better records of customers that come through their shops.
There are items that will not have serial numbers that pawnbrokers can verify, in such cases, they have to rely on good old common sense and they have to ask some questions like:
Is the person pawning the items acting suspiciously?
Do they know much about the item or at lest have a story of how they came into possession of said item?
Is there a sign that they may have tampered of tried to tamper with the serial number?
Are they reluctant to provide ID?