Bellevue 425-454-1283 · Lynnwood 425-672-2646 · Issaquah 425-392-0450 · Tacoma 253-328-4014
Selling gold? The choice of where you sell can impact your payouts by 10-30% or more. Don’t get short changed! Knowing the difference between pawn shops vs. coin shops can help you get the most cash for your gold, and avoid hassles along the way.
This quick post will compare pawn shop vs. coin shop when it comes to expected payouts for gold, silver, jewelry and other valuables.
Put simply, coin shops will almost always offer higher payouts compared to pawn shops.
This is primarily because coin shops operate a different business model than pawn shops. Coin shops buy and sell gold, silver, and coins at a high volume, with relatively lower profit margins. On the flip side, pawn shops essentially operate as emergency lenders, helping people make ends meet through short-term loans.
When you pawn gold, you’re not technically selling it. Instead, you’re taking out a short-term loan, using your gold as collateral for the loan.
The pawn shop will hold onto your gold while you repay the loan. If you fail to repay it (or choose not to), they keep the gold and sell it for a profit.
If you pay off the loan (with interest), you get your gold back.
Because the pawn shop is taking on some risk loaning you money, they will generally offer substantially less than the actual melt value of the gold. For instance, if you have a gold chain with a melt value of around $500, the pawn shop may loan you $200-$300 against the value of that chain.
Then, you’ll be expected to pay back that loan, usually within 30-90 days.
Selling gold to a coin shop is more straightforward. You show up, get your items evaluated, and sell them immediately for cash. There’s no loan process, it’s simply a cash-for-gold transaction.
The coin shop isn’t taking on any risk, so they are simply purchasing it and reselling the items for slightly more. Coin shop margins are much slimmer than pawn shops, so you can generally expect to get a better value for your items compared to pawn shops.
Pawning might make sense when you need cash but want to keep the item long-term, and when you have a plan for paying off the loan.
Remember, pawning involves a short-term loan where you get your items back when you repay the debt. So, if you have an item with sentimental value, you could use it to secure a short-term loan and then pay it off in the next few months.
Make sure you have a reliable way to pay off the pawn loan, however – otherwise, the pawn shop will sell your items on the market.
Keep in mind that pawn shops charge very high interest rates, often of 100% or more. If you have access to other forms of credit, like a credit card or personal loan, that is usually a more cost-effective option.
You may have seen a “We Buy Gold” shop near you. These businesses set up shop specifically to buy gold and silver from the public and resell it for a profit.
Usually these businesses are direct buyers, not pawn brokers like a pawn shop. This means you can directly sell your items and walk out with cash same-day, with no repayment obligations.
However, We Buy Gold businesses usually offer lower payouts than coin shops. They must turn a higher profit per transaction compared to a coin shop, simply because they have such a limited business model. While a coin shop can make profit from buying and selling gold, coins, jewelry and more, We Buy Gold shops are limited to buying and then wholesaling valuables. Because of this, they usually offer lower payouts to ensure profitability.
If you’re comparing pawn shop vs. coin shop in the greater Seattle area, coin shops like Bellevue Rare Coins offer a great option. We have locations in Bellevue, Issaquah, Lynnwood and Tacoma – and we make it easy to sell gold in Seattle. Stop by today (drop-ins always welcome), or schedule an appointment online to get started.
