Working as a pawnbroker and second-hand dealer

You must notify Fair Trading of all NSW premises that are used to conduct business and for the storage of goods. Interstate addresses will not be accepted.

If you intend to conduct business as a second-hand dealer from a market stall or any other place occupied infrequently, you must include the name of the market, street name and your stall number (if applicable) in the address.

You do not need to notify Fair Trading of any water craft not kept at business premises, however you must keep a digital record of the location and you may need to provide this information on request to Fair Trading or NSW Police.

Signs need to be clearly displayed so that customers can easily read them, but you do not need to use set colours, fonts or sizes.

Signs should be in English, but you can post them in another language as well.

Licence information

You must display at each place of business:

• the name of the licensee
• the licensee's number
• the category of licence.

Restoration of goods

You must display at each place of business the public has access to:

“You have a legal right to claim goods from these premises that you have good reason to believe are yours. Go to any police station  and a police officer will advise you of your rights and what you will need to do.”

Information to police

You must display the following notice at each place of business the public has access to:

"Any information provided to the licensee by or about a customer in relation to the trading of second-hand goods may be furnished to the police."

Interest and other fees/charges (pawnbrokers only)

Pawnbrokers must display at each place of business a sign with:

• the rates of interest charged
• any other fees and charges.

Before taking goods for sale or pawn, you need to check the supplier's identity. ID documents can include an Australia drivers’ licence, Australian passport, or foreign passport with additional proof of address (e.g. lease/utility bill).

Before you purchase an item or accept a pawn, your customer must complete an ownership statement that includes:

• details of the licensee
• details of the supplier
• a detailed description of the goods.

You can use this template as a guide. The statement should include all the information provided in the template.

Second-hand dealers must hold regulated goods for 14 days after receiving them. There are some exceptions to this rule, including goods for sale on consignment and goods purchased by the licensee at auction. More information can be found in the Regulation.

The goods cannot be altered until after this retention period has ended.

During this time, second-hand dealers must keep the goods on notified premises.

Second-hand dealers can keep boats in any convenient place but should keep electronic records of the location.

Pawnbrokers also need to keep goods on approved premises during the redemption period, which must be at least 3 months.

You need to record information about any transactions of second-hand or pawned goods and keep them for three years.

The details that you need to keep are in Part 2 of the Pawnbrokers and Second-hand Dealers Regulation.

You must:

• record the buyer’s name and address if the sale price of an item is $100 or more
• always record the sale price of an item  (if any)
• record the disposal (or sale) of an item by close of business the same day.

Market promoters must keep records of:

• all vendors selling second-hand goods at a market
• the kinds of goods sold
• person selling or pawning the goods
• a description of the goods
• the date the transaction takes place
• the price paid for the goods.

Generally, licensees must create and store records electronically, using approved record-keeping software.

However, licensees must keep the following in hard copy:

• written statements of ownership
• pawnbroker’s record of pledge.

You must make a record of the pawn agreement and give the customer a copy (known as the ‘pawn ticket’).

A pledge is only valid if the person pawning the goods signs an original hard copy record of the agreement that contains all the details below.

An employee who accepts a pawn does not need to sign the agreement. The agreement can contain either their name or a unique identifier like an employee ID.

Details of the pledge must contain:

• the date of the pledge
• the total amount lent on the goods
• a reasonable description of the goods, including each identifying number or other mark
• the name and residential address of the owner of the goods and any agent through which they are pawned.

Interest, fees and charges must be included to show:

• the interest rate charged by week, month or other period
• any other charges
• an equivalent annual interest rate
• a statement that the pawner has the option of paying interest monthly if the interest period is going to be greater than a month
• the agreed frequency of interest charges and when they become payable (for example, on a Friday or on the 20th of the month)
• an itemised statement of:
  • the fees and charges that are or may become payable, including those deductible from the proceeds of sale of the goods
  • the amounts of the fees and charges
  • the manner of calculating the fees and charges.

Details for the redemption of items must include:

• whether goods can be redeemed separately if the pawn ticket covers more than one item
• the address where the goods will be held during the redemption period
• the date on which the redemption period ends
• the method by which the goods will be sold if they are not redeemed.

Your customer must be provided with information that explains their rights and responsibilities. We have a template you can use. You can incorporate the wording into the pawn agreement or provide it as an attachment. You should not modify the wording of the statement.

You must replace lost pawn tickets if the customer asks and gives proof of their identity.

A pawnbroker and a customer can agree to extend the redemption period even if the original redemption period has expired.

This can also be done by anyone else who is entitled to redeem the goods. If the pawner is unable to extend the agreement, they can provide an authority to someone who can do it on their behalf.

You must make a record of the extending agreement and provide the pawner with a copy. The agreement must:

• include an identifying reference to the original agreement which must be attached or incorporated
• include the new redemption period
• the date the extending agreement was entered into
• specify any new or varied rates, fees or charges
• be signed by the pawner or the person extending the agreement for the pawner.

If a customer does not redeem their goods during the redemption period, you can sell the items.

You must sell items in a manner that will make sure that you get the best price reasonably possible, either by auction at any premises or in any manner at your approved business premises.

In legal proceedings, the burden of proof is on the pawnbroker to show that they have complied with these rules.

Note: Pawnbrokers and their employees, or anyone acting on their behalf, are not allowed to buy goods that have been pawned to and are being sold by the business.

If you sell an unredeemed item and there are ‘surplus proceeds of sale’, you must notify the customer within 21 days of the sale.

You do not need to provide notice if:

• the customer has requested in writing not to receive notice
• the amount that may be claimed is less than $100.

Surplus proceeds of sale is any amount exceeding the sum total of the loan amount and any charges received upon sale of a pawned good.

You must post the notice to the last known address of the customer. It should:

• include any amount that may be claimed
• state that the person is entitled to receive that amount at the business premises of the pawnbroker, or in another agreed way, at any time within 12 months of the sale.