Can a Pawshop Legally Sell Our Stolen Goods?

A topic sure to cause discussion…

Can a Pawnshop Legally Sell Our Stolen Goods?

Jewelry store owners ask about law after finding stolen goods in
local pawnshop



I think this will cuase a lot of discussion. I am not sure of the
laws behind what a pawn broker can do and their extent of liability.
Many could say they took the merchandise in on good faith under the
law, with compliance to to the law and sold it the same way.

Just my thoughts,


A Pawn shop is required to take and keep records of everything it
takes in either in pawn or outright purchase and from whom it was
received… They are required to hold goods for a specified amount of
time to allow police to match to reports of stolen goods. They are
required to notify patrons if they are overdue on their interest
payments. They may not sell pawned goods without doing so. They can
be arrested if they don’t follow the rules and if something they
bought was stolen from you and you can prove it, they have to give it
back to you, even though they paid for it., So it is in their own
self-interest to be very careful. Pawn shops make their living in 2
ways: 1.on the interest of repeat pawn customers who come in when
they need a small fast loan, pay interest on the loan until they
redeem their merchandise by repaying the loan and pawn again when
they need cash. 2. Buying items outright and reselling them at a
profit. A pawnshop owner whose clients do not redeem (repay) their
loans will go out of business; so it is not in their best interests
for people to lose their goods through lack of payments.

I think all the above is still true.
Marianne Hunter

I understand that the magic word is “knowingly” Where I am the local
law is supposed to make a sweep ever once in a while, supposed to let
pawn shops know what has been reported stolen and if possible s/n,
Description and any identifying marks, but like most things doesn’t
always work. If you spot something and bring it to the attention of
the pawnbroker he can always say he didn’t know it was stolen. I have
an acquaintance lost several high dollar rifles and shotguns,
received payment from the insurance co., replaced the stolen items
and later found them for sale in a pawn shop. He just left them
because he thought it would be more trouble than worth. It does
depend on state, county, and city as to what can be done about it.
Pawn shops transport items across several states for sale if it is
know that the item is stolen or suspected to be stolen. I have found
electric tools and items clearly marked that the items came from New
York or Chicago to Texas for sale. I imagine that jewelry is broken
down and if the jewels are worthwhile sold piecemeal and the metal
milted and sold or used. Very valuables go to different states or eve
out of the country. Diamonds, emeralds, rubies and other good quality
stones are sold as separate item. I had a friend in the pawn business
and most stuff they would throw in melt pots with stones still in the
rings, bracelets or what not and simply scoop the stones off the top.
A very interesting business.


Short answer - maybe. Long answer follows.

Depends on the laws governing pawn shops and/or precious metals
dealers and/or second hand merchandise dealers, or whatever they may
be classified as in the area where they do business. I can only speak
of the area where I did business and operated under those
regulations. Other city, county rules and regulations (ordinances)
varied quite a bit.

If I wanted to be able, legally, to buy a piece of jewelry, scrap
gold, a watch, a loose diamond, or anything else considered a jewelry
related item from a private individual, I was required to have a
precious metals dealer license. This license allowed me to buy “off
the street”, not just do repairs and sell jewelry purchased through
established wholesale channels. I had to report the purchase to the
police department, within a specified time, on a form they supplied
and was required to “hold” the item in the same condition I bought
it, together with the customer’s for a specified amount
of time, if I remember right, 10 business days. This hold period
allowed the police to check the item against their “hot sheets” for
items reported to the police department on their “Lost or Stolen
Items Reports”. After the hold period expired I could do as I pleased
with the item. The item was considered mine and I could demand any
price I desired for the item when/if it went out for sale. If the
item was declared stolen or lost by the police as determined by their
"lost or stolen item" report, the police would pick up the item and I
was out my money unless I could get it back from the person who sold
it to me. Fortunately I was never the holder of any lost or stolen
items, but I knew of a few shops that were. Sometimes they lost the
money with no recourse, sometimes the recovered items led to an
arrest and conviction of a burglar and restitution was ordered by the
court. Personally, I don’t think I’d hold my breath for any
restitution. I know of at least one instance where an item in
question was a stolen item, but since the hold period had expired and
there was no L/S Item Report on file, the shop owner and original
owner had to come to terms between themselves. Usually when that
happened the original owner reimbursed the buyer the cost of the item
in order to recover the property. The police have no real legal
standing without the proper paperwork. So, to answer your question,
it depends on the laws where you are, whether the merchant in
question followed those laws properly, and whether the person who
lost the item did his/her part by properly reporting same in a timely
fashion with a good enough description for recovery by the
authorities. Of course, that’s in an ideal world where everybody is
aware of the laws (all of them) and follows each and every law to the
letter. Yeah, right.

That’s one reason I photographed every piece of custom work I turned
out and photographed all of my wife’s jewelry. Many times I had a
customer come to me with a request for a description of a piece of
jewelry so it could be given to the police for their L/S Item Report.
Just hit the print key and presto, one picture, no writing.

I’m sure that it is illegal for any entity, except for government
agencies, to sell stolen goods. I’m sure a pawn shop has some
liability here because “ignorance” is not really a viable defense. To
provide evidence that they are not buying or selling stolen goods,
they ought to have documented policies, procedures, and audit trails
to show where the goods came from, etc.


Hi Susan,

In The Netherlands people who buy jewellery from the public (pawn
shops, antique dealers etc) are required to keep a registry of the
items they buy and from whom. The seller needs to produce an id like
a passport. Every now and then the police takes a peek at the
registers. Much like the system in hotels, they want you to show an
id and the registers get collected by the local police department to
see if you’re a fugitive or not.

It doesn’t work well because most of the time the registry is filled
out on a random sheet of paper cos of tax considerations and never
makes it into the official registry.

Anyway, if you find any of your stolen goods in a shop that can’t
produce the proper papers, the shop is screwed… if the shop can,
then it’s as the French say “tant pis” and you will have to buy the
goods back.


Hi all,

in Germany it looks a little bit different: Even if the shop can
produce “proper” papers - you proof the goods are yours, you get them
back. So I would give the advice to take photos from your jewellery
to proof they are yours. And if you can not find them back after a
robbery or such, the photos are needed for the insurance.