Pawnbrokers and second hand dealers

Information for people working in this industry.

On this page:

Recent changes

There have been recent changes that came into effect from 12 February 2021.  They include:

  • exclusions to the list of prescribed second-hand goods
  • simplified rules for the display of signs
  • updates to the records you need to keep on the sale of an item
  • second-hand dealers can keep boats in any convenient place
  • updates to the information needed on pawn agreements and tickets
  • increasing the $50 threshold to give notice of surplus proceeds of sale to $100.

Second-hand dealers who held a licence before 1997 will need to keep electronic records by 1 January 2023. These licensees used to be exempt from electronic record-keeping rules if they earn less than $150,000.

More details

All licensees need to:

  • display signs so that customers can easily read them, but no longer need to use set colours, fonts or sizes
  • display the contract number on items, but can now either mark up the item or attach a label
  • record the name and address of the purchaser of an item, but only if the sale price is $100 or more
  • record the sale price of an item, regardless of value, and make records of disposal by the end of the day.

If you are a pawnbroker, you will also need to:

  • give notice about any surplus proceeds of sale, but only if the amount is $100 or more
  • Include either the staff member’s name or an identifier in the pawn agreement, with their signature no longer needed
  • replace lost pawn tickets if the customer asks and gives proof of their identity
  • include the amount of any new or varied charges in an extending agreement, if known.

Second-hand dealers do not need:

  • a licence to buy and sell: ‘non-trailerable’ boats; removeable gaming cartridges and disks; and items that cannot be easily moved (such as non-electronic pianos and machinery)
  • to keep boats at a location they have reported to NSW Fair Trading, but should keep an electronic record of the location as it can be requested.

Second-hand dealers who held a licence before 1997 will need to keep electronic records by 1 January 2023. These licensees can currently apply to be exempt from electronic record-keeping rules if they earn less than $150,000.

Getting a licence

You need a licence to run a business as a pawnbroker in NSW, or for a business where you buy and sell second-hand goods.

Some second-hand dealers do not need a licence. Before applying, check if you sell regulated goods.

Pawnbroking licence

A pawnbroker is any person or company that lends money to people who leave something of value with the pawnbroker as collateral.

You can only do this if you have a current pawnbroker’s licence.

Second-hand dealing licence

A second-hand dealer is any person or company who has a business where they buy, sell, exchange or otherwise deal in second-hand goods.

Second-hand goods are those that have been used, and goods that have not been used but have been purchased before.

In NSW, you only need a second-hand dealer’s licence to deal in:

  • jewellery (including watches) with gemstones or precious metals
  • gemstones and precious metals
  • electric or electronic goods (like mobile phones, global positioning system equipment and audio devices)
  • computer hardware (like tablet computers and video game consoles)
  • photographic and video equipment (including digital cameras, digital imaging equipment and video recording devices)
  • musical instruments
  • sporting and recreational goods
  • watercrafts and parts of a watercraft
  • portable engine-powered, motorised and air-powered tools and equipment
  • car accessories.

You don’t need a licence to deal in:

  • items that are not listed above
  • items that are not easily able to be carried or moved, like non-electronic pianos and machinery that cannot be driven and is not portable
  • removable video or computer game cartridges or discs
  • wheelchairs and other mobility aids
  • microwave ovens, refrigerators, washing machines or other white goods
  • watercraft that cannot be lawfully towed or otherwise conveyed by a light vehicle, within the meaning of the Road Transport Act 2013.

When you don’t need a licence

You do not need a licence under the Act to:

  • trade in second-hand goods for a business or activity that you carry out in accordance with another authority (for example, under the Motor Dealers and Repairers Act 2013)
  • deal in second-hand goods as part of a fundraising appeal under the Charitable Fundraising Act 1991
  • conduct the business of an auctioneer (the business of an auctioneer does not include selling goods by tender)
  • engage in recycling and rubbish collection programs
  • sell goods in accordance with the Uncollected Goods Act 1995
  • take goods as a trade-in as part payment for any new or used goods, or to onsell any goods taken as a trade-in
  • sell any goods that have become second-hand goods by reason of being used in the course of a rental business conducted by the person
  • sell any goods so as to take or enforce securities over them.

How to get a licence

Apply by completing the application form and submitting it at a Service NSW centre near you, or email it to businesslicensing@customerservice.nsw.gov.au

From 1 July 2020, you can apply for a 1, 3 or 5 year licence if you are at least 18 years of age and found to be a fit and proper person.

You can apply as an individual, a partnership (apply individually), or a corporation.  Each person associated with the partnership or each director of the corporation should be a fit and proper person to hold a licence.

You will be ineligible if you are found to be -

  • a disqualified person under section 8A of the Act
  • a controlled member of a declared organisation within the meaning of the Crimes (Criminal Organisations Control) Act 2012
  • charged with an offence involving dishonesty (secretary may await outcomes of proceedings before determining the application)

You will need to pay the appropriate application fees before we process your application.

Note : The prescribed fees is the total amount of fees payable by all applicants, no separate fee/additional fee has to be paid if business is conducted as partnership.

Running your business

All licensees must display signs at their business, keep electronic records, and check the identity of customers.

Most businesses also need to hold goods for at least 14 days before selling them.

Clearly display signs

Signs need to be clear and displayed so that customers can easily read them. Signs should be in English, but you can post them in another language as well.

From 12 February 2021, you do not need to use specific colours, fonts or sizes. There are no changes to the information you need to include.

Licence information

Display at each place of business:

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

Restoration of goods

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

Display 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)

Display at each place of business a sign with:

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

Check each supplier’s identity and title

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.

We have provided a template you can use if you wish. The statement should include all the information provided in the template.

Observe the retention period 

Second-hand dealers must hold regulated goods for 14 days after receiving them.

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.

From 12 February 2021, 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.

Keep compliant records

Licensees need to make records 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 2021, and include information about:

  • transactions where second-hand goods are acquired or disposed of
  • transactions where pawned goods are redeemed or disposed of
  • employees.

From 12 February 2021, you:

  • only need to record a buyer’s name and address if the sale price of an item is $100 or more, an increase of $50 from the previous regulation
  • always need to record the sale price of an item
  • should make records of the disposal of an item by close of business.

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.

Forms of records

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

Licensees must keep the following in hard copy:

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

Report records to NSW Police

Licensees need to report electronic records within three days of making them. You need to submit files online using NSW Police’s electronic Weblink system.

If you have an electronic record-keeping exemption, you still need to report your records to police. The police will direct you on how to do so.

For more information on the reporting process, contact the:

Pawnbrokers Unit
Information Services
NSW Police
Tel. 8835 7826
Email: PBU@police.nsw.gov.au

Use compliant electronic record-keeping software

Computer software must comply with the Pawnbroker and Second-Hand Dealer System Software Specification released in September 2004.

If you want to buy software from a developer, you may contact an industry association for more information about software providers:

Pawnbrokers Association of NSW
Tel. 9724 2072
Email: nswpawnbrokers@bigpond.com

Jewellers Association of Australia
Tel. 8328 2833
Email: info@jaa.com.au

Australian Antique & Art Dealers Association
Tel. 9326 1319
Email: adrienne@aaada.org.au

If you are developer and have a question about the technical requirements, or to arrange an early test sample of data, please contact:

Pawnbrokers Unit
Information Services
NSW Police
Tel. 8835 7826
Email: PBU@police.nsw.gov.au

Stolen goods

NSW Police can require you to hold goods that they suspect were stolen or unlawfully

obtained for 56 days. If needed, this can be extended by another 56 days.

Title to stolen goods

The purchaser of an item  does not gain title to it if they were not sold with the owner’s consent or with the necessary authority.

Recovery of stolen goods

If a person tells you that you are in possession of stolen goods, you must direct the person to report this to the police.

If the theft or unlawful dealing of the goods has been reported to the police before, the person (known as a claimant) must provide the police with:

  • documentary evidence of ownership, or
  • a statutory declaration, and
  • make a written claim to the police they are the owner of the goods and that the goods have been stolen or otherwise unlawfully dealt with.

If the police have no reason to suspect that the documents or statements are false or misleading, they may give you a ‘restoration notice’. After receiving it, you have 28 days to:

  • return the goods to the claimant, or
  • lodge a hearing to have the matter resolved with the NSW Civil and Administrative Tribunal.

If administrative or criminal proceedings begin, you must keep the goods in their original form until the case or proceedings finish.

If no decision is made about ownership of the goods during the proceedings, the 28-day period will carry on after those proceedings.

Pawnbroking transactions

Some rules apply to pawnbrokers only. These rules aim is to protect both pawnbrokers and consumers entering into pawn agreements.

Pawnbrokers must make a record of the pawn agreement, sell unredeemed items for the best possible price, and give notice to the customer if they can claim money back.

Keep a record of the agreement 

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.

From 12 February 2021, the staff member who accepts a pawn does not need to sign the agreement. The agreement can also contain either their name or a unique ID like an employee ID.

Details of the pledge:

  • the date of the pledge
  • the total amount lent on the goods
  • a fair and 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:

  • 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.

Redemption of items:

  • 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.

Rights and responsibilities:

  • 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.

Enter into an extending agreement if needed

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.

Sell unredeemed items for the best price possible

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.

Give notice about any surplus proceeds of sale

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.

Exemptions

We can grant unconditional or conditional exemptions.

Exemptions apply in exceptional cases where the rules in the Act duplicate existing business processes, there's low risk in trading in stolen goods, and a low risk of consumer detriment.

For example, exemptions currently apply for some second-hand devices obtained from telecommunications providers where the customer’s identity has already been verified.

See the list of current exemptions

Second-hand dealers with an exemption from electronic record-keeping rules because they held a licence before 1997 will need to keep electronic records by 1 January 2023.

During this time, no new exemption applications may be made. Any existing exemption that was in place on 12 February automatically applies until 2023. After this date licensees will need to keep electronic records.

How to apply for an exemption

Email us at businesslicensing@customerservice.nsw.gov.au with your circumstances and we'll explain the process.

Other important information

Consequences of non-compliance

There are a range of potential penalties for breaking the rules including being issued with a 'show cause' notice for licence revocation if you incur a total of 12 or more demerit points within three years.

You will accrue demerit points if you or any of your employees have:

  • been convicted of an offence under the regulations
  • paid a penalty
  • been issued with a penalty notice enforcement order.

Media access control (MAC) address

A MAC address is a unique identifying number that may be used to identify a device.

Licensee records of MAC addresses may assist police with identifying and locating possible stolen electronic goods.

To assist licensees, a step-by-step guide on how to access MAC addresses from different types of devices and operating systems has been developed by NSW Police.

View or download MAC Address Guide (PDF, 881.04 KB).

A device may have more than one MAC address if it has multiple network interfaces. For example, a computer with an ethernet, and Wi-Fi connection.

Personal Property Securities (PPS) Register

The PPS Act sets out rules relating to the priority and enforcement of security interests in personal property.

Pawnbrokers and second-hand dealers may be required to comply with the PPS Act. For more information, go to the PPSR website.

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