Pawn shop operations are often more nuanced and challenging than other businesses. Other retail stores purchase their inventory from vendors, have a consistent lineup of products, and sell their stock to customers, but this is not the case for pawn shops.
Pawn shop owners get the bulk of their inventory by lending money to borrowers and holding their personal items as collateral. They accept payments up to an agreed-upon date, and if the borrower defaults, the owner eventually keeps the collateral and puts it up for sale.
This system creates difficulty in managing loans, including keeping track of the pawn shop payments, recording inventory, and managing and moving hard-to-sell personal items. However, there are some things you can do to streamline your pawn shop’s daily operations. 
Point-of-sale (POS) software.
An excellent way of managing inventory is through an effective POS system. As products come in, they are entered into the system as inventory and are removed when sold. This way, you can track what you have in stock and have all the customer information for each item at your fingertips. So, if a buyer comes in and a particular product catches their eye, you can quickly check if it’s available for sale or if a borrower may still redeem it.
Or if someone asks if you have a specific product, you can quickly look it up in your POS. Humboldt’s processing services connect directly to your POS, seamlessly giving you access to real-time transaction reports so you can ensure payments clear before removing an item from your inventory and returning it to your customer. We provide services for both retail and internet-based pawn shops.
Get a merchant account for pawn shops.
Start accepting credit card payments by getting a high-risk merchant account. Sometimes, pawn shop owners don’t mind if a borrower defaults on their loan since they can sell the collateral, usually at a profit. However, the proprietor often prefers the product gets redeemed, so they don’t have to deal with selling it, and the borrower can get their personal item back.
But what happens if a borrower doesn’t have the funds necessary to redeem the collateral? For such instances, offering the option of repaying by credit card might make all the difference. The right high-risk merchant provider can make this possible by setting you up to accept credit card payments.
Sell online.
Borrowers drop off all types of collateral. Although you wouldn’t lend them money unless these products have value, some might be obscure and hard to move. Instead of just offering some of your hard-to-sell items locally, create a website that accepts secure payments and offers your products to the world.
Humboldt Merchant Services can connect your pawn shop with a high-risk payment processor so you can collect credit card payments online and in your store. Contact us to discuss your options, and you’ll be on your way to streamlining your pawn shop operations.
