Many people have heard the phrase "one man's trash is another man's treasure" at some point in their life. This ideology is the only reason yard sales and estate sales are still around and popular today. People put their old stuff that they do not need anymore in their yard and try to sell it to people that can use it and make a profit. This profit would be used to buy something they actually can use now, while the buyer is happy that they received something they can use for their money.
The same type of philosophy is employed in the modern pawn shop. Pawn shops have been around for a long time, but still make great deals. The point is that a person can bring stuff they do not use anymore and the pawnbroker will assess the item and give you compensation for the item you want to sell. Then, after the deal has been hatched, the pawnbroker sells the item you sold to him in his store for a profit. A pawn shop is like a yard sale except it plays both ends of the trade: they buy items you do not want (your trash) and then sell it in their store to someone else who wants it (treasure). The pawn shop is simply the middle man who is just interested in making a profit.
Common items sold in pawn shops nowadays include jewelry (especially gold and silver that can be sold to smelters), electronics, and old tools.
Now here is an example of how a pawn shop works. If you decided that you wanted to get rid of a diamond engagement ring from a prior marriage that you at least thought you should get some compensation for, you can take it to a pawn shop (prices may very). When you take it to the pawn shop, the pawnbroker will look at it, appraise it, and look for possible prices. He finds that it is worth around $1,000 nowadays and he will buy the ring off of you for $400. You take the deal and walk out of the shop with $400. The pawnbroker will then take the ring and sell it in his store for $800 and when someone a few days later sees it and wants it, he will make a $400 profit and the buyer gets the engagement ring he has been looking for. Everybody wins.
That is the function of a pawn shop: one man's trash is another man's treasure. No one can deny that pawn shops are a very helpful function in today's economy. If you are short on money and have worthwhile stuff to get rid of, pawn it. Someone else is going to want your item and the middle-man (pawnbroker) will also make a profit on it. Modern pawn shops are essential to keeping the economy and your own finances stimulated. Who knew?