There’s more than meets the eye in a pawn shop — unless you’re a regular viewer of the reality show “Pawn Stars.” There are seven,771 pawn shops across the country, most of them small business, with about one-third operating in the Northeast. They contribute $3 billion to the economy, employ 37,000 people and sell used items.

You bring in a valuable item, a pawnbroker appraises it and gives you cash for the property. You’re given 30-60 days to repay the amount (plus interest) and get your item back. If you don’t, the pawnbroker can sell the property. Unlike lenders, the pawnshop does not report defaulted loans to credit agencies.

Understanding How a Pawn Shop Works

Some states require pawnbrokers to submit lists of merchandise they buy and the serial numbers to police each day, so any stolen items can be tracked down and returned to their rightful owners. The pawnshop also must hold a certain percentage of the goods in storage to prevent robbery and burglary.

A pawn shop can be a convenient way to get cash, but you should weigh all of the costs and alternatives before you use this type of financial service. If you’re facing short-term money problems, there are better ways to solve them. Learn how pawn shops work and what to look out for. Plus, discover sharper options and Money Fit angles that can help you sidestep financial traps.