Pawnbroking and second hand dealers

The Pawnbrokers and Second-Hand Dealers Act 1996 (the Act) aims to reduce the trade in stolen goods by providing a licensing regime with record keeping and proof of identity requirements.

It also aims to constrain the exercise of market power in respect of the provision of pawnbroking services and to provide a mechanism to facilitate the return of stolen property to rightful owners quickly and equitably.

Do I need a licence? 

Persons who carry on the businesses of pawnbroking or buying or selling second-hand goods which are prescribed in the Regulation are required to be licensed. The second-hand goods that are prescribed in the Regulation are those which are considered to be at high risk of theft. There are some exceptions to holding a licence; refer to the section on exceptions below.

Duration of a licence

From 1 July 2020, you can apply for a 1, 3 or 5 year licence.

Record keeping

Licensees must know what their obligations are under the legislation in regard to record keeping (refer to the legislation links at the bottom of the page). The legislation requires pawnbrokers and second-hand dealers to maintain records in relation to such things, the person selling or pawning the goods, a description of the goods, the date the transaction takes place and the price paid for the goods. Before taking goods for sale or pawn, licensees must obtain prescribed documentary evidence of the person’s identity and a prescribed declaration regarding ownership of the goods. Pawnbrokers and second-hand dealers (who are not exempt) are required to, as a condition of their licence, keep computer records. For more information go to the Computerised records page on the Fair Trading website.

Media access control (MAC) address

From 1 June 2016 licensees must record the MAC address for certain types of Wi-Fi-connecting devices, such as, a mobile phone, a tablet computer or laptop in the description of goods.

A MAC address is a unique identifying number which 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 connection and a Wi-Fi connection.

How long must I keep goods for?

In general, licensees must hold any second-hand goods which were purchased or received in the course of the licensed business, unaltered, for 14 days after receipt.

Redemption period for pawned goods

A minimum 3-month redemption period applies to pawned goods, however a pawner may redeem their goods at any time. The Act specifies that a record of the pawn must be made and must contain certain information, including a fair and reasonable description of the goods and the total amount lent on the goods, together with the rate of interest charged by week, month or other period and any other charges. A pawner must receive a copy of the pawn agreement (also known as a pawn ticket) and other prescribed material. Licensees must be aware of their obligation under the legislation.

Consequences of non-compliance

The Secretary may take disciplinary action against licensees, while the Police and NSW Fair Trading Officers may impose penalties for non-compliance with the legislation.

Licence exceptions 

A person does not need a licence under the Act to:

  • carry on activities conducted in accordance with a licence, permit or other authority under another Act (for example the Property, Stock and Business Agents Act 2002, the Firearms Act 1996, or the Motor Dealers Act 1974). In particular, the Act does not require a person to obtain a licence under the Act to carry on a business or any activity that is authorised by a licence, permit or other authority issued to that person under any other Act
  • 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 programs, selling goods collected in such a program or contracting with another person to give them ownership of those goods collected in a recycling program (local government councils, their employees, contractors to local governments and their employees operating under a contract in regard to the recycling program [but only if tenders were invited for the contract and the contractor was the successful tenderer]).

If a person in the course of, or as a matter ancillary to the carrying on of a business that does not require a licence under the Act:

  • sells goods pursuant to a power conferred by the Uncollected Goods Act 1995 or
  • takes goods as a trade-in as part payment for any new or used goods, or onsells any goods so taken or
  • sells any goods that have become second-hand goods by reason of being used in the course of a rental business conducted by the person, or
  • sells any goods for the purpose of taking or enforcing securities over those goods

that person does not require a second-hand dealers licence under the Act.

Trade-in in relation to goods, means the taking of the goods as part payment for any new or used goods.

Prescribed second-hand goods

A licence is required when a trader deals in any of the following prescribed (at high risk of theft) second-hand goods:

  • items of jewellery (including watches) that include gemstones or precious metals
  • gemstones and precious metals
  • sporting and recreational goods
  • musical instruments (but not including pianos other than electric or electronic pianos)
  • photographic equipment (including digital cameras and digital imaging equipment)
  • portable engine-powered, motorised or air powered tools and equipment
  • electric or electronic goods (but not including microwave ovens, refrigerators, washing machines or other ‘whitegoods’)
  • computer hardware and interactive game consoles
  • tablet computers
  • watercraft and parts of watercraft
  • car accessories
  • mobile phones
  • devices designed to play digital files (such as MP3 players, iPods and DVD players)
  • global positioning system equipment.

Other second-hand goods

The following goods are not prescribed second-hand goods for the purposes of the Act and a licence is not required when buying or selling them:

  • motorised wheelchairs, wheeled lounges, spinal carriages and other goods designed to carry people with a disability
  • industrial or farming machinery, that cannot be driven or carried.

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.

What signs do I need to display?

All licensees under the Act must conspicuously display the following signs at their place of business.

Please note: If it is appropriate for your business, these signs may be reproduced in another language and displayed in addition to the English language signs.

1. Display of licence particulars

A sign which is written in the English language, in capital letters and which states:

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

2. Restoration of goods (form 3)

A statement with the words in English:

"Disputes about ownership and restoration of goods: 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."

  • Pawnbrokers must display this sign in letters which are at least 5cm high
  • Second-hand dealers and market stall holders must display this sign in letters which are at least 2.5cm high.

3. Information to police

A statement with the words in English:

"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."

  • Pawnbrokers must display this sign in letters which are at least 5cm high
  • Second-hand dealers and market stall holders must display this sign in letters which are at least 2.5cm high.

4. Interest and other fees/charges (Pawnbrokers only)

Pawnbrokers must display a sign which is written in the English language, in at least 2.5cm high black Arial lettering on a white background which specifies the rate or rates of interest charged and any other fees and charges, including those that may be deducted from the proceeds of the sale of unredeemed goods.

Required documentation

To establish who owns the goods that are being offered for sale or being pawned, pawnbrokers and second-hand dealers must legibly complete Form 1 and include licensee details, additional details about the identity of the supplier of goods and a detailed description of the goods to reflect standard industry practice and ensure necessary details are readily available. Form 1 can be downloaded from the Business licensing forms page of the Fair Trading website or obtained from Service NSW  Centre.

Pawn ticket information

A pawn ticket must include the following information. A copy of the ticket and all the required information, must be given to a pawner at the time that the record is made.:

  • a fair and reasonable description of the goods, including any serial numbers or other identifying numbers and any hallmark, inscription or engraving of every component
  • the total amount lent on the goods together with the rate of interest charged and by what period as well as any other charges
  • an equivalent annual interest rate
  • the name, residential address and date of birth of the owner of the goods and any agent through whom they were pawned
  • the date of the pledge and the agreement signed.

The following notices must accompany a pawn ticket:

  • a notice about fees and charges specifying the following:
    • fees and charges that are (or may) become payable, including those that are (or may) become deductible from the proceeds of the sale of the goods
    • the amount of the fees and charges (so far as they are known)
    • how the fees and charges will be calculated (if the amounts are not known)
  • a notice regarding interest charges that disclose the following:
    • that the pawner has the option of paying interest monthly if the interest period is going to be greater than a month
    • the then agreed frequency of interest charges and when they become payable (for example, on a Friday or on the 20th of the month)
  • a notice regarding the redemption of pawned goods specifying the following:
    • the method(s) by which goods will be sold if they are not redeemed
    • whether goods can be redeemed separately if the pawn ticket covers more than one item
    • details of the premises where the goods will be held during the redemption period
    • the date on which the redemption period ends
  • a notice of a pawners rights and obligations. This notice is included in the Regulations as a prescribed form - Form 2, Notice to person pawning goods that can be downloaded from the Business licensing forms page of the Fair Trading website or obtained from a Service NSW  Centre.

Can the pawn agreement be extended?

You and the pawner 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.

Obligations regarding stolen goods

The law provides that authorised officers may serve a notice on a licensee directing them to hold goods reasonably suspected of being stolen or unlawfully obtained for a period of 56 days. A further 56-day notice may be served on the licensee if required. This assists the police in conducting a comprehensive criminal investigation and to ascertain the owner of goods suspected of being stolen or unlawfully obtained that are in the possession of a licensee.

Who has title to stolen goods?

Section 26(1) of the Sale of Goods Act 1923 provides that where goods are sold by a person who is not the owner and they sell them without the authority or consent of the owner, the buyer of the goods does not acquire title to those goods.

Recovery of stolen goods

When a person complains to a licensee that goods in the possession of the licensee are their property, the licensee is to advise them to go to a Police station. A sign specifying this is to be erected in each of the licensees’ business premises. If the theft or unlawful dealing of the goods has been reported to the Police on an earlier occasion, the person (known as a claimant) must provide Police with documentary evidence of ownership or a statutory declaration and make a written claim to the Police that they are the owner of the goods and that the goods have been stolen or otherwise unlawfully dealt with. If the Police Officer has no reason to suspect that the documents or statements are false or misleading in a material particular, then he/she may serve on the licensee what is known as a Restoration Notice.

Upon being served with a restoration notice a licensee has 28 days to either return the goods to the claimant or lodge a hearing to have the matter resolved with the NSW Civil and Administrative Tribunal.

The licensee must retain the goods, unaltered until the matter is resolved. If criminal proceedings are commenced, the police will notify licensees of that commencement and the goods must be retained unaltered until those proceedings are completed. If no decision is made about ownership of the goods during those proceedings, the 28-day period will carry on at the conclusion of those proceedings.

Computerised records

Do I need to keep computerised records?

Pawnbrokers and second-hand dealers are required to, as a condition of their licence, keep computer records. Some exemptions may apply refer to the section on exemptions below.

What am I required to do with these records?

The law requires pawnbrokers and second-hand dealers who must keep computer records, to electronically transfer those computer records to the NSW Police, within 3 working days of the record being made via the electronic Weblink System (internet). If licensees require further information in relation to this process, they should contact the:

Pawnbrokers Unit
Operational Information Agency
NSW Police Service
Tel. 8835 7826

Licensees who are not required to keep computer records, are only required to send their manual records to the police, if so requested.

What computer software do I need?

The NSW Police Service have prepared computer software specifications (‘Pawnbroker and Second-Hand Dealer System Software Specification’), which was originally released in December 2002.

The latest version of these specifications were released in September 2004, this version includes amendments to the legislation that commenced on 31 March 2005.

Can I develop software to police specifications?

The September 2004 specification is to be used by software designers or licensees, if they so choose, to develop computer software which will enable licensees to capture records in accordance with the requirements under the legislation.

Any person developing software may arrange for an early test to be made of sample data by the Pawnbrokers Unit, Operational Information Agency, NSW Police Service on 8835 7826.

Where can I get the computer software I need?

Licensees who intend to buy software from a developer may contact the following industry associations for information about software providers:

Pawnbrokers Association
Mr Laurie White
Tel. 9724 2072

Jewellers Association
Tel. 9262 2862

Antique Dealers Association
Tel. 9326 1319

Any enquiries with respect to specification of software or technical requirements should be directed to the NSW Police Service on 8835 7826.

Are there exemptions from keeping computerised records?

The law exempts some existing small scale second-hand dealers from the requirement to keep computer records.

The exemption will be granted, on a yearly basis, to second-hand dealers who held a second-hand dealers licence immediately prior to the commencement of the Pawnbrokers and Second-Hand Dealers Act 1996, if the gross receipts of their business relating to all used goods (that is, not just those second-hand goods prescribed in the Pawnbrokers and Second-Hand Dealers Regulation) totalled $150,000 or less in the previous financial year.

Pawnbrokers are not eligible for the exemption.

Why are only small-scale dealers exempt?

The Government has decided to limit the exemption to small scale second-hand dealers who held a licence immediately before the commencement of the Act and Regulation on 30 April 1997. The basis for this decision is that it would be unfair to impose this requirement on such small-scale dealers who, at the time of first becoming licensed, could not have been aware of this future obligation.

It is considered that licence holders who have entered the second-hand dealing industry after the legislation came into force should have been aware of this requirement and should therefore be required to comply with it.

When can a licensee apply for exemption?

An application for an exemption must be made at the time a licence application or renewal is made. An exemption is only granted on a yearly basis.

What documentation is required with an application?

An application for an exemption must be supported by:

  1. the applicant’s income tax return or audited financial statement for the previous financial year, and
  2. a statutory declaration by the applicant declaring that the gross receipts of their business relating to used goods totalled $150,000 or less in the previous financial year

If the applicant does not have the above documentation from the previous financial year, they can use documentation from the financial year before that.

If a licensee has relied on documents which relate to the financial year before the previous financial year, for the purpose of gaining an exemption from keeping computer records, the licensee must make available to the Director General the prescribed documents which relate to the previous financial year, within 14 days of such documents becoming available to the licensee.

If, at any time after the issue or renewal of a licence that does not contain a condition requiring the keeping of computer records, the Director General is satisfied that the gross receipts for the licensee’s business relating to used goods totalled more than $150,000 in the previous financial year, the Director General may impose a condition of that kind on the licensee. Any such condition would take effect 90 days after written notice of the condition is given to the licensee.

The current legislation governing pawnbrokers and second-hand dealers around Australia, includes:

  • NSW - Pawnbrokers and Second-hand Dealers Act 1996
  • Qld - Second-hand Dealers and Pawnbrokers Act 2003
  • SA - Second-hand Dealers and Pawnbrokers Act 1996
  • Tas - Second-Hand Dealers and Pawnbrokers Act 1994
  • Vic - Second-Hand Dealers and Pawnbrokers Act 1989
  • WA - Pawnbrokers and Second-hand Dealers Act 1994
  • ACT - Pawnbrokers Act 1902 and the Second-hand Dealers Act 1906
  • NT - Consumer Affairs and Fair Trading Act

Need more information?

Visit the PPS reform website for more information.

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