Why The Pawn Stars Sometimes Lose Money On Items They Have Purchased
When you own a pawn shop, you expect to make some money. But sometimes quite the opposite happens, especially in a high-volume store such as the World Famous Gold & Silver Pawn Shop featured on Pawn Stars. There are many reasons why the guys who run the shop might lose money on items they've purchased, and unfortunately for Pawn Stars, it's happened quite a few times. Sometimes this is due to a mistake made by one of the employees, while other times it's because of something that is simply out of their control.
These events can be devastating for the pawn shop, as it can cause the store to lose thousands of dollars. That's why it's so essential that Rick always gets the best deal and why he always has his experts show up to give him their opinion. It only takes one mistake to lose as much as $100,000 in this business. However, sometimes, owner Rick Harrison or the experts aren't there, or something happens after the purchase.
Check out some of the reasons why the guys at Pawn Stars lose money on items they've purchased.
Sometimes items go to auction on Pawn Stars
Once an item is bought from someone, it has to go through a waiting period before hitting the showroom. Once it's there, the owners will leave it until someone is interested and purchases it. This is standard practice for most pawn shops. However, if the item takes up too much space for too long, it might be time to take it over to an auction.
On a good day, the guys can still make something of a profit at the auction. On a bad day, they can lose thousands due to the depreciated value. The worst instance of this was season 11, episode 28, "Rick's Roulette," when Rick had to take a handful of items to Julien's Auctions in Los Angeles. He lost $100,000 that day after some challenging sales, including a 1940s Indian motorcycle with a sidecar, a Vic Flick-owned Stratocaster guitar, and some other items.
This moment likely serves as a stark reminder of why everyone needs to be very selective when buying items, unlike when Chumlee and Corey bought the Robosaurus in season 3, episode 27.
Sometimes the items on Pawn Stars are stolen
Two of the biggest lessons learned on Pawn Stars both happened to Rick. The first time was in 2014 when the shop bought several solid gold coins valued at $12,375. After purchase, as reported by UPI, the guys melted the coins, a practice that is allowed in Nevada due to state laws. Unfortunately for Rick, these coins were stolen, and the original owner came in looking for them. The original owner sued the pawn shop, resulting in financial complications for the Pawn Stars.
Another time something like this happened to Rick was when a guy came into the store with some giant diamond earrings. According to NPR, Rick asked all the questions, examined the jewelry himself, and even had a receipt provided to him. All of it seemed authentic to Rick, who tends to make most of the rules to follow in the shop, so he paid the man $40,000 for them. Three days later, the police showed up asking for them back because they were stolen. Rick ended up with the short end of the stick in this scenario, too, and he lost all of the money.
Sometimes it's just the buyer's mistake
Everyone makes mistakes, but sometimes these mistakes cost thousands of dollars. There are two classic examples of how the guys at Pawn Stars lost money because of their own human error.
The first happened to The Old Man when he bought what he thought were diamonds, according to a History Channel segment in 2010. They were actually CZs, otherwise known as cubic zirconia, a synthetic substance that looks and tests like diamond but contains none of it. When this substance first hit the market, the Old Man, along with many other pawn shop owners, started buying CZ items thinking they contained natural diamonds. The Old Man lost about $25,000 to $30,000 from that purchase, and he surely learned a big lesson.
Another human error that cost a lot of money could have been easily avoided with a little more experience. When Corey was just starting at the shop as an 18-year-old, he worked the night shifts. At the time, Corey thought he knew everything there was to know about everything, and he bought six different Rolexes for a total of about $4,000. Well, it turns out all of those watches were fake and he was ripped off. Whoever figured out Corey didn't know what he was doing must have told the entire town because Corey purchased all six in one week.