Pawning your jewelry may seem like a good idea in theory, but it can be a risky practice that is not usually worth it.

How Does Pawning Jewelry Work?

Pawn shops are small businesses that loan money to people who leave their valuables at the shop in exchange for a long. Known as “collateral,” the valuable items serve as gold chain jewelry inspected by hand with magnifying glasssecurity for the cash provided by the pawnbroker. You can get your possessions back once you repay the borrowed money within the agreed time. If you cannot do that, the pawnbroker can sell your valuables.

In the following, we outline some of the top reasons why you should avoid pawning your jewelry:

Pawn Shops Loan Small Amounts

Pawn shops typically give away small loans, regardless of how pricey your jewelry is. So if you’re pawning a necklace worth $900, securing the same amount of loan is highly unlikely. Chances are that you’ll only get a fraction of your jewelry item’s market value. This is how they profit. When you default.

According to the National Pawnbrokers Association, $150 is the average loan one can receive from a pawn shop. As such, pawning valuable jewelry for a small amount isn’t wise, especially if you’re unsure whether you can return the money on time.

Pawn Shops Charge Interest

Experts recommend against pawning expensive gold and diamond jewelry because the unpromising cost-to-benefit ratio doesn’t make financial sense. To get your jewelry back from the pawn shop, you must return the borrowed money and interest fee before the deadline. Although pawnshop interest fees vary from state to state, they are usually pretty steep in comparison to traditional loans.

Furthermore, the interest fee increases with the time you take to return the borrowed money- that is, if the agreed-upon time has passed. Additionally, the interest fee increases depending on the loan term. The longer it is, the more you have to pay. In many cases, borrowers end up paying more than the value of the pawned jewelry item.

You Could Lose Your Jewelry

According to estimates by the National Pawnbrokers Association, only 20% of pawn loans aren’t returned. So, most people eventually get back their jewelry and other belongings. However, taking such a risk with expensive jewelry items isn’t a good idea.

In addition, the pickup rate for pawned items is extremely low in many places around the US. So, many people pawning this jewelry for fast cash end up losing it. While pawning other items may be fine, jewelry isn’t something you’d want to risk unless you have no other way to get a loan. It’s a bad idea if you’re considering pawning family heirlooms for a small amount of money.

You Might Not Get the Cash You’d Expect

Unfortunately, pawning your jewelry will give you the lowest amount of money you could get for your valuable items. While the pawn shop business model definitely helps in tough times, it has more benefits for the pawnbroker than the borrower. Typically, you shouldn’t expect more than 50% of your jewelry item’s market value.

While pawn shops offers some benefits, it can be risky, so it is not always a good idea to pawn your jewelry for a small amount of cash. Cash for Gold USA offers a risk-free and convenient way to sell gold and jewelry for a good price.

Best Pawn Shop Alternative: Selling Jewelry Online to Cash for Gold USA

With Cash for Gold USA, you can avoid settling for a risky action like pawning your jewelry and instead work with our trusted and experienced team. Here are just a few reasons why we are the best alternative:


With thousands of customers, Cash for Gold USA is convenient for sellers like you. We have one of the biggest customer networks, with many people trusting and relying on the services. We provide special attention to each customer, guiding them to make the right decision regardless of what they are selling. Additionally, we deal in all kinds of jewelry, including rings, necklaces, bracelets, diamonds and more, even broken jewelry. (Pawn shops may not be interested in broken gold jewelry that can not be resold.)


Cash for Gold USA has GIA-certified appraisers, so we provide accurate assessments and fair payments for your valuable gold, diamond, or silver jewelry. Our assays promise the most value for your possessions after examination and appraisal. As a customer, you can compare our process with other gold and jewelry buyers before making a final decision.


When you feel the need to pawn your valuable and sentimental possessions, eliminating the haggling and stress of pawn shops is often the wisest option. You can rest assured that you’re getting the best price and the most benefit from your valuable gold, silver, and diamond jewelry. The best part about selling your jewelry to Gold for Cash USA is that it’s risk-free. If you’re dissatisfied with our offer, you can get your valuables back — no questions asked.

About Cash For Gold USA

Cash for Gold USA is a prominent online buyer of goldsilverdiamonds, platinum, and palladium in the United States. Since 2005, we have paid millions to thousands of customers for their unwanted or broken precious metal jewelry. We offer a quick and straightforward selling process, ensuring customers receive prompt and competitive offers for their items. Learn more about us and what our customers say about Cash for Gold USA, or request your free Appraisal Kit now: