Consignment and pawn shops have an issue that is not a factor in other retail operations: the providers may want their merchandise back. Inventory tracking and auditing are the primary concerns for those looking for consignment tracking software, thrift store software or pawnbroker software. Pawn shops in particular have strict regulations concerning documentation. In most states, even voided receipts must be retained and filed. A number of states require that pawn systems be approved by the state. Pawn shops are also subject to PATRIOT Act Anti-Money Laundering (AML) regulations and IRS Form 8300 requirements.
Consignment shops are not typically subjected to the same scrutiny, but the record keeping tasks are similar. Consignment stores do not generally buy inventory, they hold it for others and pay the sellers. Consequently, the inventory consists of all unique items which must be linked to the owners until sold, then the correct amount calculated and remitted—making consignment inventory solutions very specific to the industry.
For both consignment shops and pawn stores, general ledger and payroll are identical with general retailers. Both have special requirements for customer information, accounts payable and especially inventory. Pawnbrokers have unique requirements for accounts receivable to track payments from clients with items in pawn.
We often hear questions from users such as, "Are there free consignment software vendors?" and "What is the best consignment software solution?" These questions are difficult to answer—there are a number of consignment point of sale software and thrift store POS systems that can meet users' needs.
Screenshot of SimpleConsign dashboard
However, there are a number of features that users should look for when evaluating these solutions. Owners need core accounting, but should evaluate the following functions to meet their unique requirements:
|ID scanning||The system should scan and retain ID information for sellers and consigners. The POS should scan IDs and verify that the format of the ID is correct. It is impractical to validate the IDs against government databases.|
|Commitment to pay scheduling||The system should calculate interest and the commitment to pay schedule for pawn clients, generating coupon books or bills as required.|
|Unique inventory items||Resale stores have inventories built from unique items that must be tracked individually from initial acquisition to final sale and payment. The system must track and value these inventories.|
|Customer payment calculation||When consignment stores sell articles, the system must track the date and the amount, and then calculate the total remittance to the customer, as well as the store’s percentage.|
|Customer history tracking||In order to prevent and settle disputes, the system needs to keep complete time and date stamped records of all transactions, correspondence, visits and phone calls for any particular customer.|
|Inventory disposition||For resale shops, the ownership of a particular item may change. For example, a consigned item may not be picked up in the agreed time or an item may come out of pawn. The system needs to make all required notifications to the client and change inventory status as necessary.|
|Employee audit control and inventory||Shrink is a big issue in these industries and can have a big impact on the bottom line. An accurate and up-to-date employee audit, done frequently, is the best defense.|
|Inventory authentication||The system should help identify lost, stolen and counterfeit goods by interfacing with online data sources.|
|Security system integration||Pawn stores in particular benefit from integration between the POS system and security systems, linking security recordings with transaction records.|
|Messaging integration||The system should transmit customer alerts for payments due, items sold or changes in item status. Ideally, the customer should be able to opt in for email, text messages or robotic calls.|
|PATRIOT Act Anti Money Laundering reporting||The system should provide PATRIOT Act AML-required reports when purchases of “covered goods” of $50,000 or more are made in a single year.|
|Support for IRS Form 8300||If a person pays for merchandise with $10,000 or more in cash, the systems should flag the transaction and generate information for IRS Form 8300.|
|Law enforcement reporting||Any required law enforcement reports for a jurisdiction should be available from the system as required. These reports should be predefined but customizable.|
There are many benefits of using a consignment and pawn shop software solution. The most obvious one is the amount of time saved in daily operations. Some of the advantages of consignment and pawn shop software include the following:
Ensure a smooth transaction process with POS. A consignment and pawn shop software solution helps users complete all the sales steps, such as conduct sales conveniently, buy products outright and consign items, in the same transaction. Its POS system handles online credit card processing, split payments, returns and voids.
Access to consignor information. This enables the user to find accurate information, such as payout history, account activity, account balance and inventory details, related to each consignor on a single screen. Also, users can add consignment inventory either in batches or one at a time.
Employ better inventory management. Users would no longer need to review every reporting page to locate stock items. With the consignment software solution in place, users can track and add inventory efficiently. Users can also search the inventory by brand, color, category, name or other keywords. Also, they can search for consignor inventories either by an individual consignor or as a group. The software helps in understanding and automatically tracking other metrics such as inventory level, the age of the stock items and price markdowns.
Real-time communication with consignors. The software sends automatic emails and instant messages to consignors regarding updates, such as sales conducted or inventory status, so that they remain up to date with the latest status.
Pricing and discount management. A consignment and pawn shop software solution allows users to price items correctly the first time and suggests pricing quotes as well. Also, the software suggests discounts for items and offers useful features, such as automatic item discount. This feature enables users to lower prices of consignment products at the POS system while preventing them from discounting below the acceptable price.
In conclusion, a consignment and pawn shop software solution has several significant benefits that will enhance the functioning of your business.
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