Case breakdown: Movie The Gambler
The scene that you just saw shows how Jim Bennet (Played by Mark Wahlberg) is trying to sell an Omega watch to a Pawn shop owner. He is frustrated with him as he quotes the price of his watch as $3,500. To this, the seller replies $1,000. This makes Jim extremely angry and he walks out of the shop. Learning Perspectives will explore how pawn shops make money in this blog.
How do Pawn shops make money?
Pawn shops provide loans, resell retail items and ancillary services. It is a way to earn easy and fast cash. Pawn shops earns from making loans and through interest payments. Pawnshops, generally offer small loans using collaterals. These collaterals are not the ones that banks use.
These are typically jewellery, watches, televisions, electronics, furniture etc.
Value of the product is determined by the price that is apprised by the pawn broker. This is generally done by ascertaining the condition of the item. If it is a jewelry item, then the value of the gemstone is determined. For example, it could be a gold or a silver jewel.
Similar to the scene that we saw, Jim says that the watch is an Omega and was worth $6,000 brand new. He quotes $3,500, almost 50% of the original price.
