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Pawn Stars and Its Affect on the Perception of Dealers

First off, for any reader who doesn’t know, Pawn Stars is a 100% scripted show.  The “sellers” often have connections to the experts who Rick brings in to appraise the items.  It is my understanding that no money ever changes hands.  The “deals” are all just for show.  And most viewers (like me) are completely fine with that.  Pawns Stars is a great show because you can watch the show and get entertained and educated at the same time.  However, Pawns Stars has created two very painful misconceptions that hurt anyone in the buy low sell high industry like antiques, collectibles, coins, and currency.

No Honest Dealer Makes 200% Profit Margins

There are dozens of shows on TV that suggest that the average dealer pays $100 and sells for $300.  The reality is that deals like that are few and far between.  When someone does make a score like that it is usually a result of being at the right place at the right time.  I would say that 50% of sellers who have something realistically worth $300 probably want $400 for it.  The other 50% of people are willing to let someone else make a 10-20% profit, but no one is letting things go for a third of what they are worth.  The consequence is that when an honest dealer makes a fair offer of $250 for the $300 item that the seller then assumes it has to be worth $500 to $1,000 because of watching Pawn Stars.

You Can’t Walk Into A Shop And Find An Expert

Over the past four years we have seen thousands of new gold shops and pawn shops open.  There are lots of honest shops out there.  However, a lot of these newly opened places are out there to rip off people who are walking in off the street.  Maybe they can proficiently value gold or a pistol.  However, you definitely aren’t going to walk in with a rare bank note and walk out with a fair offer.  Now the shop owners will happily represent themselves  as being experts, but they just aren’t.  You can literally find an expert for anything, but one person definitely won’t be an expert on everything.

One great thing about Pawn Stars is that it got people curious about things.  Pawn Stars has turned many curious people into collectors.  And some of the curious people went from holders to sellers because of Pawn Stars.  New collectors and new sellers are great for any hobby.  That creates new demand and new supply.  That combination can be great for prices.