Bargain Hunt star opens pawn brokers

A celebrity known for helping members of the public find and sell trinkets has opened a new pawn brokers in Coventry. David Dickinson – who found fame on Bargain Hunt and has subsequently gone on to present Dickinson's Real Deal – cut the ribbon at the Rex Johnson Online store on Hertford Street in the city.

Speaking to a reporter from the Coventry Evening Telegraph, he commented it was "sad" that the post office which had previously used the space had closed. "That was a choice for the company," he commented.

Many local residents expressed their pleasure in the article that the 19th century building is being put to use. The piece, however, does go on to mention that the pawn broker's opening is "controversial" – a remark that may be understandable upon investigating exactly what one of these businesses does.

A pawnbroker could be viewed as a mix between a retailer and a financial provider. It offers loans of money to people who give them something valuable in return (the pawn) as a security. The system works something like this: once an item is handed over, a pawn-receipt is given – along with a credit agreement. Once the loan is paid back, the item can be returned. Usually, this is after around six months, but it can vary between agreements. In most cases if a person cannot pay what they owe by the deadline they have agreed – and they have borrowed £75 or less – the item is automatically retained. If it is over this amount, the pawnbroker can then sell the item to the general public to gain its money back.
The government's Consumer Direct website advises that there are many downsides and pitfalls to choosing this way of raising capital quickly. First, it asserts, the interest rates might be higher than those offered by a bank or building society (suggesting that those who choose to go down this avenue could have been refused for this service).

Another issue is with the receipt – if you have borrowed a large amount, it becomes a very important piece of paper. Lose it - and you could also lose your item to the broker as some can refuse to hand back goods without it. In some instances, an agreement can be reached where the customer pays back what they owe and signs an agreement to state the document was lost. This needs to be witnessed by a Commissioner for Oaths, Justice of the Peace or Notary Public if is for over £75. In both instances, the government recommends telling a broker of the loss as soon as it is noticed.

Discrepancies between valuations can also be an issue - an item you may think is be expensive may not be considered so by the person on the other side of the counter. Furthermore, in the situation where an item must be retailed and it gains less income than the pawning person believed it would, they become liable for the difference.

Should a major issue arise with a pawn broker, Consumer Direct advises that they can be taken to the small claims court. This does not need the services of a solicitor and is "informal and easy to use". During one of these cases, the person offering the loan will need to prove the price of the sale was "fair" and the costs "reasonable". In these cases, it is suggested that as much evidence as possible should be gathered.

The final thing to consider, according to the advice portal is this: Second hand goods, even jewellery and gold, are generally much less in monetary value than their original retail value or what they could be insured for. Interestingly, the court is much more likely to decide a price was fair if it was settled at auction.

This is something David Dickinson could probably give further advice on too.