Pawn Shops Doing Brisk Business in Sluggish Economy

At least one business sector is booming during this current economic downturn: pawn shops. According to a report on The Today Show, more and more people are turning to pawn shops as a source of quick cash to make it from payday to payday.

Unfortunately, pawn shops always have the upper hand during pawn transactions. They know that the people seeking a loan or looking to sell their goods are desperate for cash. At best, you'll get about 25 cents on the dollar for items you are trying to pawn.

If you're simply looking for a loan, and not necessarily wanting to sell an item, pawn shops are certainly a better option than payday or check loans, which can charge interest rates of more than 400 percent. Still, there are better options than pawn shops if you are looking to make some quick cash by selling your stuff.

1. Craig's List. Craig's List tops my list for one good reason: it's free. It doesn't charge you to list your items. I recently sold a painting on Craig's List to someone in another state. We handled the transaction by email, and I was paid promptly. I and the buyer were both satisfied, there was no auction involved and I got the price I wanted for my painting. Simple.

2. eBay. You can make more money through an auction on eBay. Or less. It depends upon the market for the item you are selling on eBay. Of course, you can always sell an item without an auction with the "Buy it Now" feature on eBay. Also, you will be charged a listing fee.

3. Garage sales. I have made decent cash at garage sales before, and I have had garage sales which have completely tanked. According to the Today Show report, you can expect to get about 10 cents on the dollar for the items you sell at a garage sale, which is even worse than what you would get at a pawn shop.

I am a big believer in downsizing, but typically you are better off doing so when the economy is OK, not when it is sputtering and the marketplace is flooded with people trying to sell their used items, which usually turns it into a buyers market. You're more apt to make more money on the items you are selling when people have the money to buy the things you are trying to sell.