# Redemption rate

A term used when buying pawn shop.

The share of pledges the customer comes back for, which decides which business you own.

A pawn shop is a lender when goods are redeemed and a retailer when they are not. A high redemption rate means most revenue is service charges on a revolving book, a business with predictable margin and little inventory risk. A low one means the shop is really a secondhand store fed by forfeitures, with all the aging and markdown problems that implies. The rate also moves with the local economy. Ask for it monthly across two years, because an annual average hides the trend that matters.

Part of: Buying a Pawn Shop (https://searchspheresource.com/guides/buying-a-pawn-shop)

Source: https://searchspheresource.com/guides/buying-a-pawn-shop/terms/redemption-rate
Not dated: The same editorial definitions as the glossary, inside a trade.

Site index for machines: https://searchspheresource.com/llms.txt