A business that lends money at high interest rates in exchange for collateral such as jewelry, electronic items, or anything else that is judged to have a resale value. The pawn shop keeps the collateral, and if the loan is repaid, the item is returned. If the money isnÂ’t repaid, the item is sold and the pawn shop keeps the proceeds. Typically pawn shops lend money to people at a lower economic level who donÂ’t have access to other forms of credit, such as credit cards or a credit line from a bank.