If you've ever been in dire financial straits, you might have taken your jewelry to the pawnshop in hopes of getting a payday that would pull you out of the frying pan. The reality is much more grim. Pawnshops will underpay for the metals, and won't pay anything at all for diamonds. Why don't pawn shops buy diamonds? It doesn't make much sense as a buyer, but from a seller's viewpoint, it couldn't make more sense.
So let's go over why pawnshops don't buy diamonds and how they work to make themselves a profit. There are also a few warnings that you will need to keep yourself safe when selling your jewelry. Let's also check out some slightly better alternatives that you can use to sell your jewelry for a bit more cash. That should about cover things, so let's kick it off with a brief history of the pawnshop.
History of Pawnshops
Pawnshops have been around for 3000 years. Prominent Roman, Chinese, and Greek businessmen discovered that they could turn a relatively easy profit by lending money to members of the lower class that were in need of a short-term loan. Peasants weren't the only ones who were ready to hand over some valuables for a quick payday. Even kings and queens would pawn jewelry to finance important wars and expeditions. England's King Edward III and Queen Isabella of Spain are notable examples.
When the Great Depression hit America the business of pawn shops was absolutely booming. Pawnshops served as an easy way to turn objects into much-needed money. That's always been the reason for pawn shops, it's a simple place that will provide quick and easy cash. You'll never get the best price from a pawn shop, but walking away with cash in hand is an extremely alluring prospect for a lot of people. Pawnshops have become an installation across the world for good reason. Many people are willing to take a loss to have a problem solved instantly.
Caring For Your Jewelry
Pawn shops might actually give better prices for a piece of jewelry that looks great. One trip through our ultrasonic jewelry cleaner will have it shining like new! For more of a quick fix, our shine stick diamond cleaner is sure to please. There are certainly diamond out there that nobody should buy, pawn shops included. Check out what exactly are blood diamonds? for more information.
Why Don't Pawnshops Buy Diamonds?
If you are selling jewelry to a pawn shop you will generally only get a scrap price for the metal, and when it comes to the diamonds you won't get paid at all. This is because diamonds actually aren't that rare in the grand scheme of things. The new diamond market is a monopoly, so buying a brand new diamond for that significant other or special person in your life will cost you a pretty penny but you can guarantee that you won't see that money back again should you decide to resell. Especially if you're reselling to a pawn shop.
So why won't pawnshops buy diamonds? Because diamonds are fairly common and there simply isn't much money in a used diamond. There is an upside to this however. You will be allowed to pull the diamond out and do with it as you please. You can set it into another ring or necklace. You might even be able to resell it off-market which we will get to in another section here shortly. There are certain gems that might be paid for, but they have gigantic price tags and you'll only get a fraction of that price when selling.
How Much Do Pawn Shops Pay?
As stated, pawn shops can be a source of quick cash. If you've done your homework and figured out how much a piece of jewelry might be worth, you can expect that you won't be getting anywhere near that much at a pawn shop. Take the average number that you've gathered from retail shops and hack off 40%-70%. That's right, most pawn shops will only pay 30%-60% of an item's actual value. Needless to say, it's generally closer to the 30% end of things. It definitely isn't ideal, but if you're truly in need? It can be a lifesaver. If you have a bit more time, you might be able to get a bit more so let's explore how to do so.
Alternatives to Pawn Shops
Alright, so we've established that pawn shops will pay you literal pennies on the dollar in the vast majority of scenarios. How can you get a bit more bang for your buck? Well, it requires a bit more legwork that plenty of people won't be willing to do. Online pawn shops are an option, though they aren't usually that much better than their brick and mortar counterparts you can sometimes squeeze a bit more cash out of your jewelry due to the lack of overhead that online storefronts are forced to deal with. Less money spent on rent could mean more money in your pocket!
Websites are a great place to sell. Sites such as amazon, etsy, or eBay can be a great way to sell some quality jewelry pieces. The main issue with these is that it can take a solid chunk of time before the item actually sells, so it isn't ideal for immediate emergencies. The online world isn't the only place to sell. You might try selling jewelry back to a jewelry store or even selling it on consignment. What is consignment? Consignment is basically when you let a shop sell an item for you and they take a percentage of the final sales price (usually around 35%).
If you're really desperate you can turn to sites like craigslist for selling, but people here are generally looking for rock-bottom prices so they aren't much better than pawn shops most of the time. You can easily be robbed, so follow the basic safety rules that you would whenever meeting someone online. Never meet strangers alone, don't give out your address, meet in a safe and public place, and only accept cash. You should also be on the lookout for counterfeit bills.
Watch Out When Pawning
You need to be aware of hidden charges and ensure all fees are clearly stated when dealing with pawnshops.
There will be fine print containing annual interest rates that you will absolutely want to commit to memory.
Only deal with pawn shops that check every customer's ID to ensure that they aren't the unscrupulous sort.
Be prepared to bargain with the shop owner a bit. This is a bit of a good thing, since expert hagglers can talk owners up.
Shop around and visit a few different pawn shops to see if you can get a better price on something. Some pawn shops will pay better for some items than others.
Finally, read reviews for the pawn shop you're considering. The perspective of others can let you know what to expect or if it's even worth a visit.