Subdividing your pawn loan

The other day, a customer came in with a problem that could have easily been avoided with a little forethought.

She had four pawn loans outstanding, each one a mixture of gold jewelry (chains, earrings, rings etc.). Each loan was for over a thousand dollar. That made her a big customer, since the average pawn loan – both at Kamaaina Loan and nationwide – is under $100. (Sometimes way under. While the woman was working out her problem, a man came in and took out a pawn loan for $3.)

Her loans were not only a miscellany of objects. She had mixed items of sentimental value – “things I treasure,” she described them – with common jewelry of no special significance.

As sometimes happens, the customer did not have enough money to redeem all her pawns, or even to redeem one and extend the other three (which would have required less money now). She was faced with losing at least one bag of jewelry.

She could have stood that, she said, if she could have let the common stuff go and kept the treasures. Her problem was, the treasures were mixed in with the ordinary.

If she had had some extra cash, a resolution would have been simple: She could have redeemed one, taken out the treasure, then pawned the rest back for cash to repeat the sequence with the next.

She wanted to go into each bag and pull out the treasures, compensating us for that value. Unfortunately, the pawn contract doesn’t allow that.

It has to be closed out and returned to the customer, who can then re-pawn if she wants.

The simple precaution, if you are presenting both treasures and common goods, is to have the treasures written up as separate pawns. Then, if your expectations of being able to redeem don’t quite pan out, you can redeem the treasures and let the rest go.