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Within a certain contractual period of time, the pawner of an item may purchase it back for the amount of the loan plus some agreed upon fee. If the time elapses without payment, the pawnbroker is allowed to sell the pledged item to recoup the amount of the loan, which may have only been a fraction of its actual market value. Pawnbrokers often have a large number of formerly pawned objects for sale at their place of business, called a pawnshop, whereby they may recoup money that had been loaned out on an item subsequently forfeited by a pawn customer.

Pawnbrokers can also purchase an item outright for cash with no repayment expected; these sometimes need to be held for up to 30 days by law before they can be offered for sale. Because of the risk to the pawnbroker of receiving stolen property, and the interests of the community in not allowing a legitimate businessman to act as a fence, laws to protect both these parties exist in some jurisdictions in the United States through the means of a hold placed on an item purchased by a pawnbroker. If a hold law is in effect, it will last up to approximately 30 days, depending on location. Such regulation is necessarily imperfect. Unscrupulous pawnbrokers buy goods from strangers with few questions, or turn a blind eye to certain customers, despite state laws in the United States that require a state issued ID card, Social Security number and physical description of a customer. Some local governments in the United States require a picture or thumbprint to be taken of the pawn customer. Many stolen items end up in pawnshops, though some claim that the nature of the business necessitates that some of the items will be stolen goods--many stolen items are just too common or too difficult for the authorities or even theft victims to identify and prove former ownership.

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