A pawnshop is a store where the proprietor, or pawnbroker, buys and sells personal properties which were either sold directly for second-hand resale, or given as collateral for a secured loan. When an item is pawned for a loan, the customer has the option to keep the money and leave the item for sale, or to claim it back later at a higher price.

The proprietor can buy goods outright for resale or receive them as loan security. Both routes are included in the described business.

A second-hand store generally resells lower-value donated, salvaged, or cheaply purchased goods. The pawnshop includes the collateral-based transactions absent from that store definition.