The word “pawn” is derived from the Latin word “pignus,” whose literal definition means “to pledge.” Knowing this, what exactly is a pawn shop? The easiest way to describe it would be to bring up an example. When somebody has a product that they know has considerable value and would like to receive a monetary loan in place of it by trading it in, they take it to a broker who will accept this product and give out the money in return. This is exactly what a pawn shop does – it takes products that it knows has value and on which it can profit by reselling, and in place offers money to those who trade the products in.
Pawn shops have arguably been in existence since the beginning of man and can undoubtedly be considered one of mankind’s oldest financial institutions. In the Far East, where pawn-broking most likely first originated in its most primitive form, its history can be traced back as far as 3,000 years.
Currently, the laws that pawnbrokers follow were first set in place during the years of the Roman Empire and have evolved accordingly since then. Although in those times, the Church restricted monks from serving as pawnbrokers also, they still did so in efforts to aid the poor. Soon after, the tradition transitioned from borrowers paying interest to the Church to giving outright donations.
Further West, in England, pawn shops were first established right after the conquest of William the Conqueror. It was at this time when the House of Lombard was decried a banking family and pawnbroker in the country of England. The Lombard family was the one who aided King Edward III finance his war against France by accepting the King’s jewelry as a pawn for giving him the necessary funds he needed for the war.
Pawnbrokering also has an ancient symbol that represents it. This infamous symbol is comprised of three floating spheres that is traced back to the Lombard family and their pawnbrokering practices. In yet another significant historical instance, it is claimed that Queen Isabella, who funded Christopher Columbus’ famed voyage in which he discovered America, did so by pawning her personal jewelry.
In modern times, pawn shops are everywhere imaginable. Each of these pawn shops around the world have varying interest rates and accept different sorts of products. Certain areas of the world have region-specific rules they follow that have become a part of their pawnbrokering routines. For instance, in certain parts of Asia, pawnbrokers are allowed to go to peoples’ homes and give them offers for merchandise they find appealing. In other parts, the counters in the pawn shop are built high off the ground to protect the pawn broker after the customer reaches up to offer his belongings. Being one of the oldest forms of business that is still in existence, pawn shops have proven that they will be around as long as man is.
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