The Hidden Lessons: Pawn Stars

No matter how close a trade is, or how many people in a league agree the trade was even, it’s not – someone wins and someone loses. Who doesn’t want to always be on the winning side, but how is the bigger question?

True to the last piece in the “Hidden Lessons” series all we have to do is give the ol’ remote control another couple presses and we can get a front row seat to some of the best negotiators out there, the cast of the History Channel’s smash hit and focus of the second article in the Hidden Lessons series, Pawn Stars.

The cast of Pawn Stars consists of four central characters.

The patriarch of the Harrison family, Richard Harrison who, with his son, opened the pawn shop where the series is set, the “World Famous Gold & Silver Pawn Shop.” Richard is affectionately referred to as “The Old Man” by the cast. Richard’s son, Rick Harrison is co-owner of the store and appears to be in charge of the day-to-day managing of the store. Corey Harrison, Rick’s son and Richard’s grandson, helps operate the store along with his childhood friend, and fourth major member of the cast, Austin “Chumlee” Russell.

The premise of the show revolves around how the cast members negotiate with the clientele who come into their store. The store’s clientele bring objects that they deem valuable and attempt to sell or pawn that item in return for money or store credit. A vast majority of the clientele shown on the show are simply looking to sell their items, very few actually are seeking to pawn them.

People come into a pawn shop with an item in their possession and expect to leave with a different item or, in most instances, cash. The negotiations surround any given item are all about maximizing one’s value at the expense of one’s trading partner. In other words, these negotiations are a zero-sum game. For those unfamiliar with zero-sum games, the definition of this term is essentially that if one side in the game gains it is directly at the expense of the opposing side.

Seeing any similarities to fantasy football yet?

If not, let me clue you in. This is a very similar scenario to trading in fantasy football. Whatever one side gives up is a direct gain for the opposing trade partner. The value both sides place upon their acquisitions is relative. However, make no mistake, every trade has one winner and one loser. Let’s take a look at this popular show and try to take away some important lessons it has to share with us.

First, let’s take a look at how the cast makes a successful deal and how we can use those lessons in the realm of fantasy football. Central to the cast’s negotiation process is they enter the negotiations from a position of power; they are not the party initiating the negotiations, their partner is. As such, the onus is on their partner to sell their position, not the cast member.

Immediately out of the gate, all the cast has to do is listen and take in information. Many times the party initiating the negotiations will tip their hand – they’ll either give away a flaw in their item, they will expose a reason why they should not be offered their asking price or they will undersell a potentially valuable aspect of their item unintentionally. The most important thing the cast must do at the opening of these negotiations is listen, closely. After taking in the opening pitch, the cast member in negotiation will always, always ask what their trading partner is seeking as a price and will begin negotiations from that starting point. If you notice, the cast member will never make the initial offer, they do not want to offer more than their trading partner is seeking.

Coupled with the information they collected from their trading partner, they will do one of three things

1.) They’ll accept the initial offer, which rarely occurs.

2.) They’ll ask to bring in one of their experts to appraise the item before they make an offer.

3.) They turn the initial offer down and work on bringing down the price of their trading partner – this happens more often than not.

The implications for fantasy football here are clear. If a deal is great, don’t mess around and accept it. If your trading partner is asking too much or has exposed a weakness, work them down. The third option, which should be employed whenever possible, is to bring in your own expert, an opinion you trust which can give you a non-biased and clear assessment of the offer. Two, or more, heads are always better than one. Your friendly DLF staff and DLF Forum stand by ready and willing to be that expert – just ask!

When a person comes into a trade, they almost always overvalue their side of the deal with the expectation that their trading partner will try to work them down. Don’t disappoint them if you aren’t entirely comfortable with the deal. Simply offer less or ask for more. Remember, the burden to make the deal is on them, not you. Feel free to low ball their offer or ask for much more than you expect, this buys you the same wiggle room they have already built into their offer. The cast of Pawn Stars knows this and will almost always offer far less than one would expect. They have a myriad of reasons to explain the low ball offer, whether its their overhead cost, the time they’ll have to hold onto the item, a soft market or numerous other reasons. The true reason for the very low offer is to buy them negotiation room. The cast knows what they are willing to spend for the item very early in the negotiation process, and you should, too. Offer low, or ask for a lot, but establish in your mind the line you won’t cross.

The Pawn Stars cast rarely accepts any offer of their trading partner; they fight for every extra inch and always leave the ball in the court of their opponent. If their trading partner makes an offer, they either counter-offer or stand their ground, but one thing you’ll almost never see is a cast member accept an offer – they leave the accepting of offers up to the trade initiator. This tactic maximizes the value of the cast member’s offer and leaves no value “sitting on the table.”

How about if you’re the trade initiator, though? Are you hopelessly out of luck and have to expect to be bulldozed by your potential trading partner? No, of course not. You’ve got options available to you as well, but you have to play your cards right and have all your ducks in a row before making the offer.

First, a person seeking to initiate a trade needs to do two things:

1.) First, come with a strong offer which forces the trade partner to consider the offer right out of the box.

2.) Second, the trade initiator needs to sell the offer, speaking only of the upside for both parties involved and must not discount either side of the initial offer.

If an initiator attempts to discount what they are seeking from their trade partner or points out issues with the offer they are making, then their partner will immediately be put on the defensive and will seek out other reasons why the trade must be altered. In Pawn Stars, these are the clientele who come in and point out flaws with their own item or keep telling the cast members how great of a deal they are trying to give them. There is a thin line between promoting the fairness to all parties involved and overselling value of the item the initiator is giving up. It’s constantly tempting to cross that line to help get a deal done and unfortunately this is a critical flaw in the sales pitch of many trade initiators.

Humans all have an inherent sense of value, but how they value the world around them is slightly different in everyone. Think of it as a value fingerprint – no two value fingerprints are the same. Just as you wouldn’t want someone rubbing the fingerprints off your hand, people get touchy when others try to alter the value they’ve established around them through a lifetime of experience. The most successful negotiators on Pawn Stars come into the store well informed about the item they are offering and have a good sense of its value. They don’t try to change their trading partner’s value system; they simply stick to their own.

So, how do trade initiators ever win trades?

Again, this answer is two-fold – an offer must ask for more than one expects from your trade partner and offer less than you expect to give. This is not to say one should ask for the world but offer nothing, far from. If a trade initiator makes such an offer their trade partner could, and should, feel insulted. Rather, a trade initiator needs to “leave some meat on the bone” for both sides to chew at. Expect to offer more and ask for less to get a deal done. If you are seen trying to compromise, your trade partner will feel compelled to do the same. If you ask for less, it’s a good bet your trading partner will “play ball” and offer more. As you both chew at the meat left on the bone, you will likely meet at, or close to, the expected value.

What if your potential trading partner just isn’t willing to negotiate with you or won’t get into the realm of your expected value? Well, sometimes the best deal one ever makes is by not making a deal at all. If you don’t get offered what you are looking for in order to get a deal done, don’t be afraid to walk away. There is no rule that says once negotiations begin they must end with a completed deal.

Many times on Pawn Stars, one side or the other will simply walk away from the negotiating table. If the cast are unwilling to pay what their potential trade partner is expecting, then the threat by one side or the other to walk away from the deal will sometimes spur acceptance of the deal. Worst case, you walk away from the negotiations with exact what you started with, but at least you didn’t lose value in the deal.

This, of course, leads to the final lesson we can take away from Pawn Stars which is not accepting a trade that isn’t in your best interest simply because you covet what is being offered or simply desire to get a deal done.

If you’ve watched Pawn Stars with any frequency, you know that at least once an episode one of these two phrases are uttered, “It wasn’t the amount I was looking for, but it’s better than nothing,” or “Why did you buy that? You overspent and it will take forever to sell this.” The first quote is always said by one of the clients who show up on the show when they get much less than what they felt their item was worth. The second quote is usually said by one of the Harrison clan when one of the other cast members overspent for an item they fell in love with. The lesson here, or course, is don’t fall in love with an offer or accept an offer simply to feel the rush of a post-acceptance trade. Getting a trade done may feel good or get you a shiny new toy, but once the newness or euphoria wears off, you may not be happy with what you gave up and regret inevitably sets in.

Pawn Stars is an excellent show that produces textbook case studies on both how and how not to negotiate trades. It’s nearly impossible to walk away from an episode without learning a thing or two about the dynamics of trade negotiations from a cast that carries out negotiations as their livelihood. If you’ve seen the show then you know just how useful it can be. If you haven’t seen the show then check it out on the History Channel and join the party!

Don’t forget, your friendly DLF staff and Forum Community are standing by to be your trade experts, send any questions about potential trades over and we’ll all do our best to look out for you and give you an honest opinion.