When you’re strapped for cash, pawning your diamond jewelry may seem like a way to get quick cash. Here’s why you should avoid pawn stores!
What do people bring to pawn stores when they’re low on cash? About 30% of the time, they sell their electronics. 5% of the time, they sell their jewelry.
This dip in numbers doesn’t mean people aren’t selling their jewelry. It simply means that they’re taking their precious gemstones, diamonds included, somewhere else.
If you’re looking for a place to sell your diamonds, we always recommend that you go to a diamond buyer rather than a pawn store.
Read on to find out more about why the pawn store isn’t going to give you the money you deserve.
How Does Pawning Work?
We all know that pawn stores allow you to exchange your valuables for immediate cash. However, it’s not as simple as that.
There are two ways that pawn stores will give you cash. The first and most common way is to provide the client with a loan. The second is to buy the item or items outright.
Either way, you may not get as much money as your items are worth. Read on to find out why.
Pawn stores are regulated by federal and state law which, in theory, protects you, the client. The idea is that you bring in an item of value and the pawn dealer determines how much it is worth.
They then provide you with a short-term loan that typically ranges between 25% and 60% of the sale value they’ve assigned the item.
The loan you receive from a pawn store often has a higher interest rate than a loan you would receive from a bank. Pawn dealers rely on the fact that most people who take out loans from pawn stores would not qualify for a bank loan. In other words, they can charge exorbitant interest because the client has no other option.
If you pay off your loan, you get your item of value back. If you don’t, the pawn store keeps the item and sells it to make up for the money they’ve lost to you.
Some pawn stores do sell items outright. In other words, the cash they give you is yours to keep in exchange for your item.
Bear in mind, however, that you still won’t get as much as the item is worth. The pawn store wants to turn a decent profit. They lure customers in with low-priced items of high value, which means that they will pay you a fraction of a percentage of that item’s worth.
For example, let’s say your diamond ring is worth \$1,000. The pawn store wants to sell it for $600 which means that they’ll give you anywhere between $150 and $360 for a ring worth four figures.
Why Are Diamond Buyers Better Options Than Pawn Stores?
If you shouldn’t sell your diamond ring to a pawn store, where should you take it?
Both pawn stores and diamond buyers have evaluation systems to determine the worth of the client’s items. However, pawn stores deal in all sorts of goods. They often know a little bit about a lot of things, which could put a damper on your deal.
Diamond buyers work with expert jewelers who work carefully to evaluate each piece of fine jewelry they see.
They take into consideration any paperwork the client may be able to provide. They also understand the significance of the cut of the stone, the material of the band, and the provenance of the piece.
In other words, a diamond buyer may not be able to give you a rough estimate of your television’s worth but they can give you a near-exact estimate of your fine jewelry’s worth.
Well-Priced Direct Sales
Diamond buyers don’t provide loans because their goal is to give clients as much money for their jewelry as possible. Plus, because they focus on fine jewelry, they do not seek to sell your items at an incredibly reduced price. For those reasons, diamond buyers will always offer you a better price for your diamond ring than a pawn store will.
Diamond buyers may also allow room for negotiation. If you’re not sold on the offered price, you may be able to get a bit more. Either way, the deal is not done unless and until you sign a contract saying that you are happy with the offer on the table.
Diamond buyers understand that selling fine jewelry is often a sentimental process. Jewelry often has more than just monetary value. There is personal significance to each piece we see in our shop.
Many of our clients are recent recipients of an inheritance or recently divorced. Our goal is to help you close one door to open a new one and we’re always happy to go at the pace you’re most comfortable with.
Get the Price You Deserve For Your Jewelry
When it comes time to sell our valuables, we often think of pawn stores. This is because they’ve been around for as long as we can remember and they’re all over the place.
If you’re selling diamonds or other fine jewelry, however, it is in your best interest to skip the pawn store and go straight to a diamond buyer.
In Chicago, Chicago Diamond Buyer has spent almost two decades perfecting the art of jewelry appraisal and customer service. Take a look at our testimonials and fill out the contact sheet at the top of the page to get started on your free diamond evaluation.