Best Practices for Pawnshop Owners

The collateral lending industry faces some unique challenges. Chiefly among them is the less-than-stellar reputation of pawnshops. Modern pawnshops aren’t the seedy, shady places that Hollywood makes them out to be, but it’s difficult to dissuade the surrounding community of these misperceptions. Faithfully adhering to industry best practices—such as by staying fully compliant with the law—is an effective way to grow your own business and improve the image of the industry.

Stay current with industry changes.

Collateral lending professionals work within a dynamic, evolving industry. The federal and state laws are always subject to change, which is why retaining the services of a law firm is so crucial. Industry practices also change, such as the new electronic uploads of transaction data to the state agency, compared to the previous practice of paper reporting. All pawnshop owners should stay on top of the latest changes to remain compliant.

Maintain professional integrity at all times.

It goes without saying that professional integrity is essential for individuals in all industries. Arguably, it’s more important for pawnshop owners because they are already at a disadvantage, given the unfavorable reputation of the business. Pawnshop owners who are fully informed of all transactional issues are better equipped to better educate their customers.

Keep necessary licenses current.

In California, while the Department of Justice does the initial license processing, including a criminal background check, and conducts backgrounds for renewal applicants, local law enforcement is tasked with actually issuing the license and enforcing the provisions of the Financial and Bus & Prof. Codes. Establishing a solid relationship with local law enforcement goes a long way to maintaining a good reputation. Verifying that your software properly uploads to the new California Pawnbroker and SecondhandDealer System (CAPSS) is critical.

Invest in your team.

The employees you hire do much more than just conduct transactions and interact with customers. They reflect the values and trustworthiness of your business. Do your due diligence to hire the right employees who are committed to furthering their professional competence.

Collateral lending and secondhand dealer businesses throughout California can rely on The Law Offices of Jon Webster for sound legal guidance and representation. Since 2003, Jon Webster has represented the both the California Pawnbrokers Association (formerly known as the California Collateral Loan and Secondhand Dealers Association) and numerous pawn and secondhand dealers. You can reach us at (925) 609-7600.

Categories: Collateral Lending

Comments

No Comments Posted