A Brief History of the Pawn ShopApril 12, 2017 4:54 pm Leave your thoughts
Our pawn shop in Barberton, OH is not just a small part in the local economy. Our trade arises from a long history. The idea of pawning and pawn shops has been around for thousands of years—basically for as long as people have needed to borrow money! This brief overview discusses this history and how it developed to modern times.
The Beginning of Pawn Shops
The first pawn shops started in China about three thousand years ago. It was the primary method of granting credit to peasants. There were independent moneylenders, but many also ran operations out of their own shops. It was often the only way peasants could cover their basic needs after a bad harvest year.
Pawn brokerage also existed further west, and the industry thrived in ancient Greece and Rome, too. It was the primary way merchants gained financing to open shops or expand. When the Roman Empire fell and the Dark Ages began, the Catholic Church closed pawn shops by restricting interest. This reduced credit options for anyone who was not part of upper nobility.
Commerce became a priority again in the 14th century, and with that development, interest limits on pawn brokering diminished. It took the same form you see today: short-term credit to cover temporary problems. Businesses gained capital through these loans and families secured aid when they required it.
The rise of this industry created power in moneylending families. The Lombards of England and the Medicis of Italy were known for granting loans with collateral. King Edward II financed the war against France in 1388 by pawning his jewels to the Lombards. Queen Isabella even allegedly pawned her jewelry to finance Christopher Columbus’ expeditions!
The Modern Pawn Shop
In the United States, pawn shops have experienced significant growth in the last 100 years. The Great Depression provided new opportunities for expansion, since banks failed and people struggled to make ends meet. Without jobs or any way to meet basic needs, many people pawned valued heirlooms just so they could eat.
Today, people still use pawn shops to turn valued items into cash when they need it. Unfortunately, this industry became prone to abuse. Unscrupulous shops took advantage of people in desperate situations by inflating interest and fees. In response, organizations like the National Pawnbrokers Association encouraged ethical behavior and local governments regulated them more thoroughly. There are cities that limit the number of pawn shop licenses to reduce the potential of abuse.
There are 14 federal regulations and statutes that affect pawn shops. They are a safer way to secure short-term loans, since they are better regulated than payday loan outfits. Instead of having fees continuously taken from your bank account, you have one deadline to pay off a pawn loan, and that amount will not change unless you request and receive a longer loan term. If you do not pay the loan, the matter concludes with the sale of your item.
Sydmor’s Jewelry and Pawn Shop in Barberton, OH has helped many people finance emergencies and other immediate needs. We offer excellent customer service, and you will always understand the terms of the loan. Visit us today to see what we can do for you!
Categorised in: Pawn Shop History
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