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Staff reports pawnshop-fee audit finds compliance; no fee increase recommended now
Summary
City staff told council Feb. 4 that Shakopee collected $10,942 in pawnshop transaction fees in 2024, covered monitoring and billing costs, and that an audit of both local pawnshops found no discrepancies; staff recommended not raising the long-standing $1.50 per-transaction fee at this time.
City staff presented a report Feb. 4 reviewing pawnshop transaction fees and compliance. Staff said the city collected $10,942 in pawnshop transaction fees in 2024, and that the monitoring service the city uses (Leads Online) costs roughly $4,620 per year; staff concluded the current fee level covers program costs.
Staff explained the pawnshop transaction fee in Shakopee has been $1.50 per transaction for about 20 years. The city contacted peer municipalities and found local fees vary; they cited examples ranging from lower amounts to higher fees in other jurisdictions. Staff reported that both pawnshops operating in Shakopee passed a recent audit and that no discrepancies were found.
Staff noted statutory and regulatory requirements for pawnshops: they must record customer identification information, take photographs, and retain video of transactions in some cases; the shops also upload data into the monitoring system used by law enforcement. A councilor asked whether the count is based on transaction quantity; staff confirmed it is.
Staff recommended no immediate change to the fee level. They said if council wished to revisit fees in a future budget-year fee schedule, staff could provide lead time to allow businesses to adjust their pricing and operations. Councilors signaled support for the staff recommendation and observed the city should not use the fee as a revenue-raising measure but rather to offset monitoring and administrative costs.
No council action was taken; the item was presented for information and possible future consideration when council reviews fee schedules.
