Pawnbrokers have provided money in return for jewelry and precious items for years. In fact, history tells us that lending money for portable goods is one of the oldest professions in the world. In the old days, these shops may not have shared the limelight of the History Channel's “Pawn Stars” but they were an integral part of society and business.

Today, shops in this category provide much the same services. The short term loans are used by individuals and families to bridge the financial gap and meet many immediate needs including paying utility, rent and hospital bills as well as buying food and gas. On some occasions, they have even helped small business owners meet their payroll expenses.

The National Pawnbrokers Association (NPA) in Texas, which advocates for the rights of its members before government, says these loans “provide a safety-net to over 30 million unbanked or under-banked Americans”.

The advantages of short-term loans:

• They provide cash when there is now else to turn
• You do not require a credit check
• They never negatively affect a customer's credit
• You can redeem your gold and silver in the stipulated time and reuse them for future loans

Not many are aware that pawnbrokers have a code of ethics which requires them to serve customers with honesty, integrity and professionalism. They must also obey laws empowered by the local, state and federal governments. Below are some points of interest shared by the NPA.

Interesting facts:

• According to the 2010 US Economic Census, there were approximately 8,600 pawn establishments
• 81% of these stores are independently owned small businesses or small regional chains
• Pawnbrokers and their transactions are governed by more than 13 federal statutes and regulations, including consumer protection
• Other aspects of transactions, including the interest rate, loan duration and grace period, redemption method, record-keeping, etc. are governed by state and local laws

They are more than just trade-in shops

Some shops go beyond lending money for your jewelry and coins. They also buy and sell precious metals, collectibles and other items of value, including your electronics. If you have unused jewelry or old coins sitting in your drawer, get them valued at an established broker in your area. You could be sitting on a small fortune and not know it. Some stores even provide jewelry repair services and could restore your broken items to look like new again, after which you could sell them for a fair price.

Finding the right pawn shop

Given the number of establishments, how do you decide which shop to go to? It's not that hard. Find out how long they have been around and what their customers say about them. Established brokers are more likely to provide a fair price and quality service. They want their customers to keep coming back to them. NPA membership might be another way to determine how they conduct their business as it reflects their commitment to ethical standards.