Pawn shop

A pawn shop (also called a pawnshop or pawnbroker) is a shop or business that loans money to people who bring in valuable items which they leave with the pawnbroker. Common examples of items left by customers are jewelry, cameras, musical instruments, or gadgets like computers and smartphones.

The valuables that people leave are called the "collateral". The person can get their valuable item back from the pawnbroker if they pay back the money they were loaned and pay interest on the loan. Interest is a fee for getting to use someone else's money for a set time period. If the person who has borrowed money from the pawnbroker does not repay the loan and interest within an agreed-upon time limit, the pawnbroker can sell the valuable item to another customer to get back the money they loaned.

To prevent thieves from using pawnshops as a way to get money from stolen goods, many communities have laws requiring that people who bring in valuable items to the pawnshop have to show identification, such as a driver's licence.

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