The Story of Three Spheres
The iconic pawnbroker's symbol is three spheres suspended from a bar. Many pawnshops have this symbol incorporated into their logos or hanging over their door.
The symbol dates back to the Middle Ages and Renaissance Period when many people could not read or write. Symbols became a way to identify shops in the villages. The three-sphere symbol is attributed to the Medici family of Florence, Italy, that ruled Florence and, later, Tuscany during most of the period from 1434 to 1737, with the expectation of two brief periods. During this period, the Italian province of Lombardy is where pawn shop banking originated under Lombard banking.The Medici Family
The Medici family may not have been the original users of the symbol; there is a legend about how the three-ball symbol made its way onto their coat of arms. The legend claims that a Medici hired Charlemagne to slay a giant using three bags of rocks, resulting in the Medici crest using the three balls. The golden spheres may have been represented by byzants or a gold or silver coin used during the Mediaeval times in Europe. The gold coins used at the time and later changed to spheres to help attract more attention.The House of Lombard
Other families adopted the use of the three balls because of the financial success of the Medici family. The gold balls were used throughout the Middle Ages on crests as a symbol of success, and the medieval Lombard merchants used the three golden spheres as their symbols, signifying success. In Europe, a pawn shop was called the Lombard, and in London, England, a banking family was called The House of Lombard.Jolly 'Ole St. Nichols
Another story is the legend of St Nichols, the patron saint of pawnbrokers. The three balls were said to symbolize the story of Saint Nicholas giving a bag of gold to each of a poor man’s three daughters, which allowed the daughters to get married.
Pawn Evolution - An Industry Over Time
Quite impressive that over 3000 years ago, in Ancient China, pawnshops operated as an independent business, grated short-term credit to peasants. Pawn shops were established to get loans in return for something called collateral. Collateral is anything of value that can be traded for cash, and then if the collateral loan is repaid, the item is returned. These types of loans are also called secure loans.
Pawn shops were a part of Ancient Greece, and Room and citizens during this time would use pawn shops to get start-up income for businesses. Loans were paid off once the companies started making money and were able to turn a profit. During the Middle Ages, the Catholic Church set limits on interest rates and what could be charged by pawn shops, which halted the growth of pawn shops. Over time, pawn shops proved to the Church the value of short-term credit for starting up a business and other endeavors and how pawn shops gave aid to the poor. The Catholic Church relaxed the restrictions causing the pawn industry to grow again.
In 1388, England’s King Edward III pawned the royal jewels to finance the war against France.
Pawn shops also made a place in history when Christopher Columbus financed expeditions by pawning Queen Isabella of Spain's jewelry. Pawn shops were used by the wealthy and the poor in the 19th century. People pawned clothes on Monday to get their paycheck on Friday and repurchase them. Today pawn shops don't take clothes as a business practice as these items are not in-demand items. In 1872 England established The Pawnbrokers Act, which protected pawnbrokers who inadvertently sold stolen items. This act also stipulated the amount of interest charged on pawned items and set out general guidelines for the industry, establishing a regulation pattern that exists even today. Today, the federal laws that regulate the pawn industry are the Patriot Act, Truth and Lending Act, and Equal Credit Opportunity Act. Other regulations like the Data Privacy and Safeguard of consumer information are a part of the Federal Trade Commission.
Pawn Shops In the USA
Pawnbroking dates back in history and has evolved to what they are today. Money was chronically in short supply, so it was common for Americans living in small communities where everyone knew each other to reach out to one another and act like informal lenders.
Informal Lenders of Money
Neighbors who needed money would offer up an animal or piece of equipment as collateral for money to pay for taxes and other expenses. Innkeepers and taverns would act as informal pawnbrokers because they came into contact with people on the move traveling from town to town. They would accept goods in exchange for a night's stay or a meal. When settlers came to America in the 18th Century, a pawn evolution began in the United States. Pawnbrokers were the primary source of consumer credit. Financial institutions such as financial corporations, savings and loan associations, and credit unions began to pop up and extend money in loans to consumers.
The oldest pawn shop in the United States was established in 1890 in Lynchburg, VA, by Jacob and Lena Oppleman, who opened the pawn shop and operated it until 1920. Their son, Ike Oppleman, took over the business in the 1920s and loved it. When he passed, Aaron acquired the L. Oppleman and continued the legacy.
The Great Depression was a severe worldwide economic depression mainly during the 1930s, beginning in the United States and lasting until 1933. It started when the stock market crashed in October 1929, and millions of investors lost their money and assets due to the panic the crash caused. People stopped spending money, and investments dropped, which caused a steep decline in industrial output. Because industries weren't producing as much as before, employment declined, and workers were laid off. Pawn shops were the only place in America offering money because banks failed and people needed money. People took common and in-demand items to a pawn shop for quick cash to help pay taxes and bills. Pawn shops had a variety of items to sell, and most pawn shops offer products that people needed and wanted, and they could offer them at a discount. As people grappled with economic hardship, pawn shops bridged the gap between not having money to pay bills and get necessities and having money to meet daily needs. Pawnbrokers today are a profession and engage in centuries-old practice by providing needed items and money to people, whether rich or poor.Towns of all sizes, small and large, have pawn shops that help provide money to those in need or offer retail products at an affordable discount.
Today ordinary people bring goods into pawn shops to either pawn or sell their goods outright. Pawn shops accept designer handbags, camping gear, sports equipment, video game consoles, yard equipment, name brand power tools, scrap gold, gold and silver jewelry, diamonds, musical instruments, Rolex, and luxury watches, hoping to get money fast. The items are different today when compared historically. Still, the end goal is extra money. Pawn shops don't typically take things like children's items, board games, car seats, car batteries, or scrap metal as collateral to pawn for quick cash. The process of obtaining a pawn loan is simple. The customer brings in an item and asks for a collateral loan (pawn loan). If the thing is one of the high-demand pawn items like gold, gold jewelry, silver, silver jewelry, and other precious metals, the offer may bring top dollar. The pawn shop appraises the item by using specialized equipment for testing or by doing some research to determine the article's market value. The pawn broker will authenticate the item as well. Authentication can be a bit tricky, but pawn brokers are experts and often have specialized equipment like a precious metals ex-ray device to determine the purity of the substance. Pawn shops base the item's value on the current appraised value, its current condition, and the ability to sell the item should the loan fall into default. Pawn shops may compare what the item would sell for on eBay or another online source. Pawnbrokers have research tools to determine the value of each thing they take in to get you the most money. Once the value is determined, the pawn broker will make an offer and decide what amount of money can be lent. The pawn shop holds the item that secures the loan until the loan is repaid. The loan has to be repaid along with interest in the specified amount of time agreed on with the pawn broker to get the collateral back. Some pawn shops will work with customers to have them pay the interest in full to extend the length of their loan so they don't lose their items. If the loan and interest aren't paid for within the allotted time, the collateral is forfeited to the pawn broker, who is then free to sell it to recoup the loan amount. The loan must be repaid-with interest at the interest rate negotiated when the loan was obtained to redeem the collateral. According to the National Pawnbrokers Association, the average pawnshop loan is about $150.0 and is repaid in 30 days.Like most things in life, a pawn loan has pros and cons.
A pawn shop loan is not a personal loan. It is a collateral loan based on the value of the collectible coins, power tools, yard equipment, gold and silver jewelry, precious metals, scrap gold, golf clubs, riding lawn mower, video game consoles, loose diamonds, high-end sporting equipment, musical instruments, gold coins, and other commonly pawned items brought in by the customer hoping for quick cash.
Pros
Pawn shop loans are an advantage if you can't take out a traditional loan from a bank or formal financial institution. If you don't have a bank account, a cosigner, or bad credit, a pawn loan may be the quickest way to get money quickly. If you can't pay the pawn loan term, the pawn shop that agreed to loan against your valuable item will take the thing and resell it to cover the cost of the loan, and thus your credit score is not affected.Cons
Pawn shops may have higher interest rates because the loan is considered short term and the pawn shop needs to make money to cover their costs and turn a profit. Unfortunately, because the loan from a pawn shop is secured, if you don't pay back the terms of your loan, the pawn shop can take your item and use it to reimburse the cost of the loan.
A Pawn Revolution
The pawn evolution has created changes in the financial institution over time. Starting 3000 years ago in China to today, pawn shops have evolved into a noteworthy profession and worldwide industry.
Best Things to Pawn Around the House
From offering up animals in the past as collateral to offering up X-Box gaming systems today, the pawn loan process is still the same. Pawn shops today have a list of things to pawn. Most pawn shops buy and loan on yard equipment, a diamond ring, gold jewelry, silver jewelry, high-end sports equipment, broken jewelry that is gold or silver, workout equipment, loose diamonds, a used or new engagement ring, high-value items like designer handbags or a high-end watch, golf clubs, camping gear, musical instruments, gold coins, a riding lawn mower, gold broken jewelry, scrap gold, gaming systems, old video games, collectible coins, nail guns and name brand tools, and collectibles. Pawnbrokers who were once informal lenders are now professionals with a wealth of information and are always looking to get their customers extra cash. They are willing to get jewelry appraised at their shops to offer quick money, and they are a financial resource when someone needs money fast. Today, many people depend on pawnbrokers to help them meet daily financial needs not offered by other institutions. Banks, savings and loans, and other financial institutions won't lend small amounts for a short period. It just isn't worth their time and expense to do so. Some people have poor credit, sporadic work histories, and have default judgments listed on their financial history, making it impossible to get a loan from a bank. But if you have something that has a high resale value, then a pawn shop is an option. Pawnbrokers provide a financial solution for consumers that other financial resources are not willing to provide. Pawn customers represent the working families of America who periodically experience an unexpected need for short-term funds. Pawn loans keep the electricity on, the rent paid, food in the fridge, and cars running with full gas tanks. In today's pawn industry, pawn shops are family-operated, neat, clean, and attractive, with excellent customer service and online services. Today's pawn shops comply with all federal, state, and local regulations and laws and work with local authorities to reduce theft. Pawn shops of today are not only evolving; they are rapidly changing to meet the growing needs of Americans.
"It's a Pawn Revolution," says Sam Reading, owner of Idaho Pawn and Gold
"I am dedicated to helping the revolution!" Sam recently said in an interview. He said that his local pawn shop in Meridian, Idaho, is vested in getting people more money for the same items other pawn shops considered.
Getting into the pawn industry seven years ago, Sam described having no experience and overall not having a clue about what he was doing or had gotten himself into. He explained he found Yigal Adato's podcast, which led him into a fantastic pawn community, not realizing that everyone had already started a revolution of their own and a New Age of Pawn.