One of your biggest challenges as the owner of a pawn shop is that you do not own your inventory. Instead, it is, in effect, loaned to you by your customer and may be taken back at any time. Fortunately, a good POS system can help to ensure that you keep track of your stock and sales trends with ease and efficiency.
Selling as a “high-risk” or specialty business.
There are several categories of companies that are automatically deemed to represent a higher-than-normal risk to banks and other financial institutions that offer payment services. Due to the nature of the clients you serve, the reputation of this sector, and the increased likelihood of chargebacks, the pawn industry falls into this designation. Therefore, you will need to apply for a high-risk merchant account to assist you with payment processing.
Consequently, you can expect to undergo additional scrutiny when applying for these services. Also, you will pay higher per-transaction fees as well as potential extra charges. There is nothing you can do to fight your high-risk status as a pawn broker; just accept it as a cost of doing business in this potentially lucrative sector.
Features to look for in your pawn shop POS.
Once you select the service provider best equipped to meet your needs, they should be able to furnish you with a bundle of hardware and software that will process your payments and assist you in streamlining many other aspects of your operation. Ask your service provider if they have equipment that contains the following features.
- Ability to separate and categorize inventory based on each unique customer.
- Ability to calculate how much a customer will be paid for their items.
- Inventory disposition or the ability to notify the original customer when an item changes hands. Additionally, the program needs to update your inventory as soon as merchandise leaves “pawn” status.
- Automatic inventory authentication, which is possible when the system is cloud-based and can connect with online data sources to check for fraud.
- Automatic contact and messaging features, which let customers know right away when their item has been sold and can also notify them when payments are due via email, robotic call, or push notifications on their mobile device.
- Tax reporting integration, which is when your system should automatically generate IRS form 8300 for tax reporting purposes. Cloud-based POS systems are even able to transmit this information electronically to Uncle Sam.
- Integration with law enforcement because, nevitably, the time will come when you will deal with stolen goods as a pawn shop owner. You need a POS that can generate location-based reports to be provided to the authorities on demand.
Your pawn shop can be a source of profits for you and function as a valuable institution in your community. With the right POS at your side, you can efficiently meet your customers’ needs while simultaneously streamlining your operations and complying with the unique law enforcement requirements inherent in your industry. Don’t accept anything less than the optimal payment services provider who can furnish you with the right equipment to take your shop to the next level.
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