Reconsider Selling Your Jewelry at a Pawn Shop

Although it may have been watered down with American consumerism, jewelry had always been a means of wealth preservation. The high intrinsic value of a band of gold and a pristine diamond is just concentrated wealth that can cross borders and hold it’s value in even the worst of economic disasters.

Since I treat my jewelry stash as an investment (besides my wedding ring), if I were to sell my diamond ring online, I wouldn’t want to give it away at a loss. If you are desperate enough to go to a pawn shop, you are doing just that.

Why Are Pawn Shops Prevalent?

Many old civilizations had some form of pawn shop, even if it wasn’t necessarily called that. There would be general stores or individuals in ancient China or the Roman Empire that would be goods from cash-strapped individuals and sell them at a higher price. A lot of this activity was under the table, even up until recent years in developed countries.

Britain was likely where the modern idea pawnshops had formed as they would buy and sell pretty much anything on the market. Even today, it is seen as a seedy front for goods, although regulations are in place.

Today, pawn shops in the United States and elsewhere are licensed and regulated establishments, although the practice remains quite the same. With set interest rates, people wanting to pawn at least have some form of protection.

When bills come piling up, working-class folk would rather sell at a low price to a pawn shop than take out a payday loan or end up in the hands of a loan shark. This is why pawn shops are so prevalent around the world.

Getting Your Jewelry Appraised

Pawnshops can take advantage of people that don’t know the value of their jewelry, whether it’s the market value or just the intrinsic value. The intrinsic value refers to the cost of gold jewelry when it is scrapped for its gold and gems without considering labor added to create it.

Unless you have a unique vintage piece or something from a jewelry chain, a lot of pawnshops will be more interested in the intrinsic value of the gold. Diamonds are not something that is easily reshaped and reused, so you can expect to be low-balled on the gem it has.

To get an idea of what your gold is worth, you may put it on the kitchen scale to get a precise reading of its weight. You may then refer to the purity stamp on the ring (such as 24K) to refer to its purity. In the end, you would be better off taking it to a jeweler to accurately appraise your ring to get an idea of the market value, both intrinsic and otherwise.

Final Thoughts

Pawnshops take jewelry at a low-ball price due to convenience and desperation, so don’t sell anything unless it is an immediate emergency. You are better off selling it online, through a broker or to a reputable jewelry establishment instead doing it in a rush.