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.
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.