Plus you should also consider having a marketing system in place to attract qualified customers into your pawnshop and keep them returning again and again.
Maximum finance charges, minimum holding times, unredeemed pledge disposal, and many other important business metrics are regulated by these statutes and need to be complied with.
These limitations always vary from state to state and sometimes from city to city.
As of this writing there are 13 regulations just at the federal level. Regulation within the IRS code, the US Patriot Act, the Truth in Lending Act, and many others are to be followed to the letter.
In most cases there are severe penalties for operators either knowingly or unknowingly not in compliance with these federal regulations.
Realize it’s no one’s responsibility but your own to find out what licensing your pawnshop will require, knowing all of the regulations for your area, and applying for and obtaining the required licensing before doing business.
One of your best resources for this information will be the Pawnbroker’s Association for your state.
I’ve had many entrepreneurs contact me who state they are planning to open a pawnshop and are seeking my assistance.
In talking to them I discover they are most interested in buying, selling, and trading secondhand goods.
In most pawnbroking operations, fine jewelry accounts for over 50% of items pledged for a pawn loan or offered for sale.
If at least someone in your business cannot identify a diamond from a moissanite or a solid gold ring from a heavily plated ring, you will have an extremely difficult road ahead of you.