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Pawnshops are regulated at the state level in the United States, and every state has different rules. Some of the details are absolutely fascinating! As an example, let's take a look at how a pawnshop works in the state of North Carolina.

Silence North Carolina privacy law requires that pawnshops keep all nonpublic personal information private. They also have to give each customer a "Customer Privacy Notice." What does all of this mean? Say that your television is stolen and the thief takes it to his local pawnshop and sells it. The pawnshop processes the item ticket for the police, and after the legal holding period (48 hours in NC), puts the TV out on the floor for sale. The next day, you come in, looking for stuff stolen from your home, and see your TV. You immediately tell the pawnbroker that that's your TV (you, of course, have the serial number), that it was stolen from your home and that you want to know who brought it in. By law, the pawnbroker cannot tell you who brought it in, or even when the TV was brought in and sold. He will direct you to the police, who will have the item ticket from the pawnshop and who will be able to investigate your claim further.

Pawnshops are a business just like any other. But unlike many other businesses, pawnshops have a special set of laws that keep them on the straight and narrow. Pawnshops are specially licensed, and it turns out that they have to cooperate with police on a daily basis to prevent the movement of stolen merchandise.

When you pawn an item, the pawnbroker takes your name and address, verifies it with your valid driver's license and then inspects the item carefully. Most pawnshops have the ability to test diamonds and gold for authenticity. If you are bringing in something like a TV or VCR, the pawnbroker tests it to make sure it works properly. If there is a serial number on the item, it's also recorded on the pawn ticket. In the next section we'll examine the reasons a pawnshop must complete paper work on each item.