This study attempts to address the issues, securities and circulation of money in pawnshops. What is pawnshop? According to Caskey and Zikmund (1990), ”Pawnshops are one of many financial institutions supplying consumer credit, yet they do not compete directly with other financial institution for customers”. It provides variety services such as credit system between the creditor and debtor, mortgage and even money exchange. There are two parties in pawnshops; the lender and the borrower. According to an online site the freedictionary.com, lenders are the one who provide money temporarily on condition that the amount borrowed be returned, usually with an interest fee. While the borrower are the one who obtain or receive something on loan with
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They act as provider of money with specific interest addition to the principal being loan. The borrower or debtor is the one used to borrow money to pawnshops for their different financial needs. Everytime a debtor borrowed money, they must have something usually jewelries or appliances that will serve as their collateral. They have the responsibility to pay his obligation or else his collateral will be confiscated or forfeited. The exchanging process between lenders and borrowers in pawnshop is secured. They have an equal agreement for the benefits of both parties. There are ways on how pawnshop operated. According to an online site the pinoybisnis.com (2009), “the main activity of a pawnshop is lending money for interest based on valuable items that customers bring in. The pawnbroker assesses an item for its condition and sale ability. After which, the pawnbroker determines the amount of money to be loaned. You repay the loaned money plus the interest rate and you’ll get your collateral back. If you fail to repay the loaned money, the pawnbroker keeps the …show more content…
So that, there is a high risk to possibility that they encounter problems. As we observed, one of the major problems of each institution is the counterfeited money. Having different features of a particular currency, some are being copied and duplicated to trick people. This is why pawnshop should pay attention this kind of problem. Pawnshop must be able to detect those fake money in order for them not to be fooled. There are ways on how they can prevent themselves from duplicated money. Each money during every transaction should be examine the special features of the paper bills. Pawnshop must be familiar about those different features of currencies for them to easily detect the original money from counterfeited money. They must be knowledgeable about the physical characteristics of money. “Once you realize the money is counterfeit, you need to take certain steps to protect yourself and turn in the person who gave you the money. You may also seek legal restitution from the person who paid with counterfeit money” (Symes, 2015). This is the possible act that a pawnshop can do if they encounter receiving counterfeited money during any
They act as provider of money with specific interest addition to the principal being loan. The borrower or debtor is the one used to borrow money to pawnshops for their different financial needs. Everytime a debtor borrowed money, they must have something usually jewelries or appliances that will serve as their collateral. They have the responsibility to pay his obligation or else his collateral will be confiscated or forfeited. The exchanging process between lenders and borrowers in pawnshop is secured. They have an equal agreement for the benefits of both parties. There are ways on how pawnshop operated. According to an online site the pinoybisnis.com (2009), “the main activity of a pawnshop is lending money for interest based on valuable items that customers bring in. The pawnbroker assesses an item for its condition and sale ability. After which, the pawnbroker determines the amount of money to be loaned. You repay the loaned money plus the interest rate and you’ll get your collateral back. If you fail to repay the loaned money, the pawnbroker keeps the …show more content…
So that, there is a high risk to possibility that they encounter problems. As we observed, one of the major problems of each institution is the counterfeited money. Having different features of a particular currency, some are being copied and duplicated to trick people. This is why pawnshop should pay attention this kind of problem. Pawnshop must be able to detect those fake money in order for them not to be fooled. There are ways on how they can prevent themselves from duplicated money. Each money during every transaction should be examine the special features of the paper bills. Pawnshop must be familiar about those different features of currencies for them to easily detect the original money from counterfeited money. They must be knowledgeable about the physical characteristics of money. “Once you realize the money is counterfeit, you need to take certain steps to protect yourself and turn in the person who gave you the money. You may also seek legal restitution from the person who paid with counterfeit money” (Symes, 2015). This is the possible act that a pawnshop can do if they encounter receiving counterfeited money during any