Pawning vs Selling
We all know about selling as we have ourselves sold one or more of our items, whether or not we are into retailing or wholesale. This is because all our life we are buying items from the market or the malls and know very well what selling entails. There is another arrangement similar to selling known as pawning that many people are not fully aware of, despite there being pawn shops in most parts of the world. Let us find out the major differences between pawning and selling for the benefit of the readers.
When you sell something, you lose your ownership rights over it as soon as you receive its payment from the party that purchases it. You may have to buy again the object from the person to whom you sold it, and in most instances, this is not practical or possible. However, when you pawn, you retain the chance to redeem the item that you have kept as a pawn after you pay back the interest and the loan, which you got in lieu of the item. But once you have sold an item, it becomes the property of the purchaser; he is the owner now, and the only way to reclaim ownership of the item is to buy it back at his asking price.
There was a time when people made heavy use of pawn shop(s) in their areas to get a loan for their purpose by pawning valuable items in their possession, which they did not want to sell forever. However, with the advent of banks and credit card companies, money is easily available to people without having to pawn their valuables, which is one reason why pawn shops world over are losing sheen these days. However, in remote areas and among people belonging to lower income groups, pawn shops are still an attractive option to pawn their valuables to get a loan. It is easier for them as there are very little formalities and paperwork involved in pawning as against obtaining a loan from a bank.
In pawning, a customer gets time to reclaim his item, normally ranging from 30 to 90 days. He has to repay loan amount along with interest within this time period to get back his item that is kept as a collateral against the loan. The amount of loan is decided by the pawn shop owner, and it is in his sole discretion.
What is the difference between Pawning and Selling?
· Sell and forget, pawn and remember to reclaim it.
· When you sell and item, you get full price of the item and ownership of the item is transferred immediately.
· When you pawn an item, you get a loan against it and a time period within which you have to repay the loan amount along with interest to get back your item.
· Pawning has declined a lot because of the availability of banks and credit card companies that are ready with a loan easily.