Pawn Shop Markdown Schedules: Aging Forfeited Inventory Without Losing Margin

A pawn shop's sales floor is fed largely by forfeited collateral: items whose owners didn't repay their loans. That inventory arrives in unpredictable waves, in every category from tools to jewelry. Without a plan, slow movers pile up, tie up cash and crowd the floor. A simple aging and markdown system fixes most of that.

How inventory reaches the floor

According to the National Pawnbrokers Association's industry facts, there are about 10,000 pawn stores in the U.S., the average pawn loan is around $150, and about 85% of borrowers repay and reclaim their items. The NPA also notes that roughly two-thirds of a typical store's space is used to hold customer collateral.

The roughly 15% of loans that aren't repaid become retail inventory once the state-mandated holding period ends. Because the timing depends on borrowers, the flow is uneven, and the shop has to sell what arrives, not what it chose to buy.

Track the age of every item

The foundation is simple: record the date each item hits the sales floor. With that date, you can see at a glance what's fresh and what's stale.

Adjust the windows to your categories. Tools and electronics may need faster schedules than musical instruments or collectibles.

Treat gold and silver differently

Precious metal jewelry doesn't follow the same rules. A plain 14K chain has a floor value set by its gold content, so it rarely makes sense to mark it below melt. Instead:

• Price metal-heavy pieces from the market. Their value follows the gold or silver price, up and down.
• Mark down only the premium. If a piece isn't selling, reduce the markup above metal value, not the metal value itself.
• Set a scrap threshold. If a piece hasn't sold after a set time, refining it may be better than holding it.

Our gold melt value chart shows how to calculate that floor.

Keep markdowns honest

The FTC's Guides Against Deceptive Pricing (16 CFR Part 233) apply to used goods too. If a tag shows a "was" price, that price must be one you genuinely offered for a reasonably substantial period. A dated markdown schedule makes this easy to show: each step is a real price, held for a real stretch of time.

Keep the tag matching the register

Markdowns are where shelf and register prices drift apart. The system says one price, the tag on the item says another. In many states, inspectors check this using the NIST Handbook 130 price verification procedure, under which a store passes at 98% accuracy or better and a small store is typically checked with about 50 items.

Practical habits that help:

• Pick a markdown day each week and update every tag that crossed a threshold.
• Put the floor date on the tag so staff can spot overdue items.
• Spot-check the register against a few tags after each markdown round.

Use the data

Over time, your aging records show which categories sell fast and which don't. That's valuable when setting loan amounts: if a category routinely sits for 90 days and sells below its starting price, your loans on it may be too generous.

For a closer look at the jewelry side, see how pawn shops can display accurate gold prices.

Sources

• National Pawnbrokers Association, Pawn industry facts
• eCFR, 16 CFR Part 233, Guides Against Deceptive Pricing
• NIST, Handbook 130, Examination Procedure for Price Verification (2026)