Pawnbrokers, Secondhand Dealers and Scrap Metal Processors

Del. Code tit. 24, ch. 23
in effect

Del. Code tit. 24, § 2301 Definitions.

As used in this chapter: (1) “Antique dealer” means a person, company, corporation, or member or members of a partnership or firm who sells exclusively goods that are at least 50 years old. (2) “Automated kiosk” means an interactive device that is permanently installed within a secure retail space and that has the following technological functions: a. Monitored remotely by a live representative during all business hours of operation; b. Verification of a seller’s identity via a government-issued identification card; c. Secure storage of goods accepted by the kiosk; d. Capture and storage of images during the transaction; and e. Electronically report all transactions to law enforcement. (3) “Catalytic converter” means a used, detached catalytic converter that is used for controlling the exhaust emissions from motor vehicles, and that contains a catalyst metal, but does not include a catalytic converter that has been tested, certified, and labeled for reuse in accordance with U.S. Environmental Protection Agency regulations. (4) “Consumer” means any person or buyer who purchases a “retail” product, as defined in paragraph (11) of this section, other than for further purposes of resale or processing. (5) “Department” shall mean the Department of Safety and Homeland Security. (6) “Director” shall mean the officer in charge of the Professional Licensing Section of the Division. (7) “Division” shall mean the Division of the Delaware State Police. (8) “Exempted Internet acquisitions” means any property acquired by a business licensed under this chapter from an exclusive Internet sale. (9) “Gift card” means a tangible device, whereon is embedded or encoded in an electronic or other format a value issued in exchange for payment that may be used to obtain merchandise, goods, or services at a single retailer of goods or services or an affiliated group of retailers of goods, which may provide to the bearer merchandise in a specific amount or of equal value to the bearer of the device. (10) “Pawnbroker” means any person, company, corporation, or member or members of a partnership or firm who: a. Engages in the business of lending money on the deposit or pledge of personal property or other valuable things, other than causes in action, securities, or written evidences of indebtedness; or b. Purchases personal property with an expressed or implied agreement or understanding to sell it back at a subsequent time at a stipulated price; or c. Lends money upon goods, wares or merchandise pledged, stored or deposited as collateral security. (11) “Retail” means the sale or purchase for final consumption in contrast to a sale for further sale or processing, or a sale to the final consumer, rather than a sale to a retailer or one who intends to resell. (12) “Scrap metal processor” means any person, company, corporation, or member or members of a partnership or firm engaged in the business of selling or receiving any worn out or discarded metal, old iron, used plumbing fixtures, other metals, automobiles, automobile parts, chain, copper, lead, brass, or other parts of machinery. (13) “Secondhand dealer” means any person, company, corporation, or member or members of a partnership or firm whose storefront business includes any volume of selling or receiving previously owned, used, rented or leased tangible personal property excluding motor vehicles. The term “secondhand dealer” includes any individual engaged in the business of receiving tangible personal property by means of an automated kiosk. The term “secondhand dealer” shall not include auction houses, flea markets, antique dealers or motor vehicle dealers. This chapter, as it relates to secondhand dealers, does not apply to: a. The sale of secondhand goods at events commonly known as “garage sales,” “yard sales,” or “estate sales”; b. The sale or receipt of secondhand books, magazines, post cards, postage stamps; c. The sale or receipt of used merchandise donated to recognized nonprofit, religious, or charitable organizations or any school-sponsored association for which no compensation is paid; d. The sale or receipt of secondhand furniture; e. The sale or receipt of secondhand clothing and shoes; f. The sale of goods exclusively via the Internet that meet the definition of “exempted Internet acquisition” set forth in this section; g. Federal firearms licensed dealers; h. The retail sale or purchase of goods, notwithstanding any and all articles under § 2302(b) of this title, and/or produce or other food products to a consumer, by a person, company, corporation, member or members of a partnership or firm from a location that the person, company, corporation, member or members or a partnership or firm, owns or leases; or i. The taking in trade by a business of an item of a like kind to items which such business sells as new goods as the principal or substantial part of its business. (14) “Secretary” shall mean the Secretary of the Department of Safety and Homeland Security. (15) “Section” shall mean the Professional Licensing Section of the Division. (16) “Superintendent” shall mean the Superintendent of the Division.

Del. Code tit. 24, § 2302 Reporting requirements.

(a) Every pawnbroker and secondhand dealer shall create a record and provide information regarding merchandise acquired via an electronic format to be determined by the Secretary of Safety and Homeland Security. (1) Such record shall include, at a minimum, the following information: a. The date and time of purchase; b. The make, model, identifying markings, color, size, any listed serial number, International Mobile Station Equipment Identity (IMEI), the Mobile Equipment Identifier (MEID), any unique identifying number assigned by the manufacturer, or any other identifiable characteristics of the purchased item or items; c. If payment is based on weight for precious metal, the weight of the type of the metal shall be listed as well as any precious stone(s) which is a part of the item; d. The amount or other consideration paid for the merchandise; e. The name and address of the individual from whom the merchandise is acquired; f. The signature of the individual from whom the merchandise is acquired; g. For each individual from whom the pawn broker or secondhand dealer acquires scrap metal: 1. The date of birth and driver’s license; or, 2. Identification information about the individual from a valid state-issued photo identification card that provides a physical description of the individual, including the sex, race, distinguishing features, and approximate age, height and weight of the individual. (2) Pawnbrokers and secondhand dealers shall collect a photograph of the seller and all information pertaining to the seller, required on the electronic form, for every transaction regardless of value. (3) Automated kiosks shall collect a right thumbprint image of the seller and all information pertaining to the seller including photograph and valid government issued identification, required on the electronic form, for every transaction regardless of value. (b) (1) Every scrap metal processor shall create a record and provide information regarding scrap metal acquired via an electronic format to be determined by the Secretary of Safety and Homeland Security with respect to any of the following articles purchased or otherwise acquired: a. Copper. b. Silver. c. Gold. d. Brass. e. Platinum. f. Bronze. g. Automobiles or automobile parts displaying a vehicle identification number (VIN). h. Lead-acid batteries. i. Catalytic converters. (2) The record required by paragraph (b)(1) of this section must include all of the following information: a. The date and time of purchase. b. The type and grade of scrap metal, where applicable. c. If payment is based on weight, the weight of each type and grade of scrap metal. d. The amount or other consideration for the scrap metal or other items. e. The registration plate number, make, and model of the vehicle used in the delivery of scrap metal or other items. f. The name and address of the individual from whom the scrap metal or other items are acquired. g. The signature of both of the following: 1. The individual from whom the scrap metal or other items are acquired. 2. The scrap metal processor. h. For each individual from whom the scrap metal processor acquires scrap metal or other items, 1 of the following: 1. The date of birth and driver’s license. 2. Identification information about the individual from a valid state-issued photo identification card that provides a physical description of the individual, including the sex, race, distinguishing features, and approximate age, height, and weight of the individual. (3) Scrap metal processors must collect a photograph of the seller and all information pertaining to the seller, required on the electronic form, for every transaction regardless of value. (4) In addition to the requirements set forth in paragraph (a)(2) of this section, for the purchase or acquisition of a catalytic converter, a scrap metal processor or other authorized purchaser must also record all of the following: a. The business license number of the seller. b. The name or identification of the employee responsible for making the purchase. c. A description of the catalytic converter including any obvious markings such as paint, labels, or engravings that would aid in the identification of the catalytic converter. d. The vehicle identification number of the vehicle from which the catalytic converter was removed. e. A signed statement from the individual receiving consideration for the purchase stating that the individual is the rightful owner of the catalytic converter or is authorized to sell the catalytic converter. f. A photocopy or scanned copy of the driver’s license or state-issued photo identification card of the individual selling or transferring the catalytic converter to the scrap metal processor, which includes the type of card and any distinctive number on the card. g. A digital photograph or video recording of the individual delivering or receiving consideration for the catalytic converter with the individual’s facial features clearly visible and a digital photograph or video of the catalytic converter, as delivered or sold, with the type of metal property identifiable. The date and time of the purchase shall be digitally recorded on the digital photograph or video recording. (c) The forms required by subsections (a) and (b) of this section shall be completed immediately after any articles or goods have been purchased or acquired and shall be submitted electronically by the close of business the next business day, in a format to be determined by the Secretary of the Department of Safety and Homeland Security, to the law-enforcement agency having primary jurisdiction over the area in which the business is located. If the article or good’s serial number, IMEI, MEID, or other unique identifying number is not available at the time of purchase or receipt from an automated kiosk, the report filed pursuant to this section must be updated with the serial number, IMEI, MEID, or other unique identifying number as soon as possible. The holding requirements in § 2304(a)(1) of this title do not begin until all required reports are complete and submitted to the appropriate law-enforcement agency. Forms submitted under this section shall be kept confidential and are not public records. (d) Pawnbrokers, secondhand dealers and scrap metal processors shall record the name of the person making the record entry and shall make that information available to police. (e) The information provided on the forms under this section shall be stored and maintained by the pawnbroker, secondhand dealer, or scrap metal processor for a period of 1 year and shall be provided to police immediately upon request. (f) The Secretary of the Department of Safety and Homeland Security may promulgate rules and regulations that allow for the completion and filing of electronic forms and information. (g) (1) Articles purchased or otherwise acquired by a scrap metal processor shall be recorded via an electronic image, in either still or video format, and a copy of said image(s) is to be supplied at the specific request of a law-enforcement agency, within 24 hours of said request. (2) The images referenced in paragraph (g)(1) of this section above will be kept on file by the scrap metal processor for a minimum of 30 days after the image was recorded.

Del. Code tit. 24, § 2303 Pawn ticket and memorandum.

(a) Any pawnbroker shall furnish to each applicant or customer a ticket on which is printed a number corresponding with the number used to identify the article placed in pawn, and also the amount given in cash, together with all charges and the total amount to be paid when the article is to be redeemed. (b) Any pawnbroker shall, at the time the loan is made on goods or articles, deliver to the person pawning or pledging such goods or articles, a memorandum or note, signed by such person and containing an account and description of the goods or articles pawned or pledged. No charge shall be made or received by any pawnbroker for any such ticket entry, memorandum or note.

Del. Code tit. 24, § 2304 Holding period.

(a) (1) A secondhand dealer operating an automated kiosk may ship all goods, wares and merchandise to a secure off-site location upon approval from the Superintendent of the State Police or the Superintendent’s designee. Goods shipped under this section must be held for 30 days including weekends and holidays, subject to return and inspection by any police officer of Delaware. The off-site location may be out of the State. (2) Every pawnbroker and secondhand dealer subject to this chapter must keep for a period of 18 days, including weekends and holidays, subject to inspection by any police officer of Delaware, all goods, wares and merchandise purchased or received from any person before selling, shipping or otherwise disposing of the same. This does not prohibit any person from securing valuable goods, wares and merchandise in a vault, safe or safety deposit box or other similarly secured storage area on the normal business premises so long as such secured items are readily available for inspection by a police officer. Scrap metal processors must hold platinum, gold and silver articles for 18 days. (b) Every scrap metal processor subject to this chapter must keep for a period of 72 hours from the date and time the item was electronically reported, not including holidays or weekends, all copper or brass articles purchased or received from any person before selling, shipping or otherwise disposing of same, except that there shall be no holding period for articles meeting all of the following criteria: (1) That are purchased or received from a commercially licensed entity. (2) That are of the type commonly purchased or received from commercial entities. (3) For which payment is made directly to the commercial entity and not to the individual delivering the articles. (c) An individual authorized to purchase a catalytic converter under § 2307(c) of this title must withhold payment to the seller of a catalytic converter for 48 hours, not including holidays or weekends. During this time period the purchaser must keep the catalytic converter intact and safe from alteration, damage, or commingling and must place an identifying tag or other suitable identification on the catalytic converter. (d) Every scrap metal processor which takes in a scrapped or dismantled vehicle without a title must have the vehicle cleared by a Delaware State Police auto theft technician before the vehicle is scrapped, dismantled, or altered in any way. (e) Such holding periods are not applicable when the person from whom the goods were acquired or pledged desires to redeem, repurchase, or recover the goods, provided the dealer or pawnbroker can produce the record of the original transaction with verification that the customer is the person from whom the goods were originally acquired. (f) A pawnbroker, secondhand dealer, or scrap metal processor shall not destroy, disfigure or obliterate identification marks or cause the identity of an article to otherwise be destroyed so long as the article continues to be in that person’s possession. (g) Law-enforcement officers may require that an item be held for an additional 30 days beyond the requirements of subsection (a) of this section if they know or have reason to believe that the property is missing or stolen.

Del. Code tit. 24, § 2305 Inspection of premises and records.

(a) Every pawnbroker, secondhand dealer and scrap metal processor subject to this chapter shall maintain at a place of business designated on the license records of all information required by this chapter, together with a photocopy of government-issued photo identification, for a period of at least 1 year from the date the transaction was recorded. (b) The records required to be maintained in subsection (a) of this section shall, during regular business hours, be subject to inspection by a law-enforcement officer of Delaware, or by the Attorney General or any Deputy Attorney General. (c) Such inspection shall consist of an examination on the premises of the inventory and required records to determine whether the records and inventory are being maintained on the premises as required by this chapter.

Del. Code tit. 24, § 2306 Stolen goods: notice to police.

Any pawnbroker, secondhand dealer or scrap metal processor may seize any goods offered to such person for sale or as a pledge or pawn, which such person has reason to believe have been stolen. Such person shall immediately notify the law enforcement agency with jurisdiction over the premises where the sale or offer or pledge took place or where the goods are currently located. Any person acting in compliance with this section shall be immune from civil or criminal penalties if that person acts in good faith.

Del. Code tit. 24, § 2307 Prohibited transactions.

(a) No pawnbroker, secondhand dealer or scrap metal processor subject to this chapter shall knowingly purchase or acquire any article, ware or merchandise: (1) From any person or persons under the age of 18 unless that person or person is: a. Recycling aluminum cans; or b. Accompanied by a parent, grandparent, or guardian and is not selling a catalytic converter. (2) From any person under the influence of any intoxicating liquor or drug when such condition is visible or apparent; (3) Which has an altered, obliterated or otherwise tampered with serial number or identifying marking; (4) Which remains sealed, unopened in its original packaging, or in its original unused condition unless the person conveying the item presents a receipt or proof of purchase for the item; or (5) A gift card from a retailer. (b) No pawnbroker subject to this chapter shall take or receive as a pledge or pawn any artificial limb or wheelchair. (c) No individual may purchase or sell a catalytic converter from an individual unless the individual, at the time of purchase or sale, provides identification that shows the individual is 1 of the following: (1) A scrap metal processor licensed under this chapter. (2) An automotive recycler licensed under Chapter 75 of Title 21. (3) An agent or employee of a licensed scrap metal processor or automotive recycler. (d) A scrap metal processor may not purchase the following items from an individual unless the individual, at the time of purchase, provides appropriate authorization from a relevant business or unit of federal, state, or local government specifically authorizing the individual to conduct the transaction. (1) Metal bleachers; (2) Hard-drawn copper; (3) Metal beer kegs; (4) Cemetery urns; (5) Grave markers; (6) Materials related to railroad infrastructure; and (7) Any other used articles owned by a public utility including: a. Guardrails; b. Manhole covers; c. Metal light poles; d. Tree grates; e. Water meters; and f. Street signs. (e) A catalytic converter may not be purchased with cash. Payment must be made in the form of a check payable to the licensed individual or licensed entity selling the catalytic converter. (f) An entity or individual authorized to sell a catalytic converter under subsection (c) of this section may not provide false, fraudulent, altered, or counterfeit information or documentation to the purchaser of a catalytic converter. (g) The purchase and sale of a catalytic converter must occur between the hours of 6:00 a.m. and 9:00 p.m. (h) The sale of a catalytic converter must occur at a fixed business address of an individual authorized to purchase a catalytic converter under subsection (c) of this section. (i) The Department of Safety and Homeland Security and its designees may seize an item found in violation of this section. For any item seized for violation of paragraph (a)(4) of this section, the Department shall hold the seized item for no more than 30 days, during which time the pawnbroker, secondhand dealer, or scrap metal processor may provide the Department with proof of ownership or other evidence sufficient to establish ownership under this chapter.

Del. Code tit. 24, § 2308 Penalties.

Whoever violates this chapter, except where another penalty is provided, shall be guilty of a misdemeanor and, if convicted, may be fined not more than $10,000. (1) Assessment of a civil or administrative penalty shall be determined by the nature, circumstances, extent and gravity of the violation, or violations, ability of the violator to pay, any prior history of such violations, the degree of culpability, economic benefit or savings (if any) resulting from the violation and such other matters as justice requires. (2) In the event of nonpayment of the administrative penalty after all legal appeals have been exhausted, a civil action may be brought by the Superintendent or the Superintendent’s designee in any court of competent jurisdiction, including any Justice of the Peace Court, for collection of the administrative penalty, including interest, attorneys’ fees and costs and the validity and appropriateness of such administrative penalty shall not be subject to review.

Del. Code tit. 24, § 2309 Local regulations.

Nothing in this chapter shall preclude political subdivisions of the State and municipalities from enacting laws more restrictive than the provisions of this chapter, but such laws shall be in addition to, not in lieu of, the regulations set forth in this chapter.

Del. Code tit. 24, § 2310 Licenses required.

(a) No person shall carry on the business of a pawnbroker, secondhand dealer or scrap metal processor without first having taken out a license and duly qualified as provided in this chapter. (b) All licenses granted by the State Police to such persons, citizens of this State and companies existing under the laws of this State to engage in and carry on the business of pawnbroker, secondhand dealer or scrap metal processor shall expire annually on December 31. (c) The licenses shall designate the address in which the person or company shall carry on the business. No person or company shall engage in or carry on the business of pawnbroker, secondhand dealer or scrap metal processor in any other building than the one designated in the license. This prohibition does not apply to the acquisition of goods by a pawnbroker, secondhand dealer or scrap metal processor. (d) The Director may suspend or revoke a license or issue an emergency suspension for a violation of this chapter or regulations promulgated thereunder by the Secretary. (e) Anyone licensed under this chapter shall notify the Section within 5 days of being arrested for any misdemeanor or felony crime.

Del. Code tit. 24, § 2311 Qualifications.

An applicant applying for a pawnbroker, secondhand dealer or scrap metal processor license must meet and maintain the following qualifications: (1) Must be at least 18 years of age. (2) Must submit a current valid Delaware business license issued by the Delaware Division of Revenue, (3) Must notify the Section, within 10 days, of any change of address, phone number, email address or contact person for the business. (4) Must not have any pending criminal charges. (5) Must not have been convicted of a felony within 5 years of application date. (6) Must not have been convicted of any misdemeanor involving a theft-related offense, or moral turpitude within 3 years of the application.

Del. Code tit. 24, § 2312 Records.

(a) The Section shall keep a register of all applications for pawnbrokers, secondhand dealers and scrap metal processors and complete records, changes and additions to rules and regulations, hearings and such other matters as the Secretary shall determine. Such records shall constitute prima facie evidence of the proceedings of the Secretary. (b) The Section pursuant to approval of the Secretary shall: (1) Adopt and, from time to time, revise such rules and regulations and standards not inconsistent with the law as may be necessary to enable it to carry into effect this chapter; (2) Deny or withdraw approval from applicants for failure to meet approved application procedures and other criteria; (3) Oversee renewal applications and appropriate fees; (4) Conduct hearings upon request for denial, suspension or revocation of a pawnbroker, secondhand dealer or scrap metal processor license; (5) Have the power to issue subpoenas and compel the attendance of witnesses, and administer oaths to persons giving testimony at hearings; (6) Have all the duties, powers and authority necessary to the enforcement of this chapter, as well as such other duties, powers and authority as it may be granted from time to time by the Secretary.

Del. Code tit. 24, § 2313 License fees.

(a) Every person receiving a license for conducting the business of pawnbroker shall pay the Division $50 to go to the State’s General Fund. (b) Every person receiving a license for conducting the business of secondhand dealer shall pay the Division $50 to go to the State’s General Fund. (c) Every person receiving a license for conducting the business of scrap metal processor shall pay the Division $50 to go to the State’s General Fund. (d) Every person receiving a license for conducting the business of pawnbroker, secondhand dealer or scrap metal processor, shall annually pay a reasonable subscription fee, not to exceed $300, to the electronic reporting system designated by the Secretary.

Del. Code tit. 24, § 2314 Disciplinary proceedings; appeal.

(a) Grounds. — Subject to the provisions of this chapter, the Director, pursuant to the authority of the Secretary may impose any of the following sanctions (subsection (b) of this section) singly or in combination when it finds a licensee is guilty of any offense described herein: (1) Conducting a pawnbroker, secondhand dealer or scrap metal processor without a license; or (2) Failure to comply with electronic reporting requirements pursuant to § 2302 of this title; or (3) Failure to comply with holding period requirements pursuant to § 2304 of this title; or (4) Obtaining criminal charges or convictions pursuant to § 2311 of this title; or (5) Failure to comply with inspection requests pursuant to § 2305 of this title; or (6) Failure to notify the local law-enforcement agency upon suspicion of stolen goods pursuant to § 2306 of this title; or (7) Violating prohibited transactions pursuant to § 2307 of this title; or (8) Submitting false or fraudulent information material to any application for a license; or (9) Violating any provision of this chapter or any rule or regulation promulgated by the Secretary. (b) Disciplinary sanctions. — (1) Permanently revoke a license. (2) Suspend a license. (3) Issue a letter of reprimand. (4) Refuse to issue a license. (5) Refuse to renew a license. (6) Issue an emergency suspension (7) Or otherwise discipline. (c) Procedure. — (1) After receipt of written notice from the Section of the denial, suspension, emergency suspension or revocation of a license, the applicant or license holder shall be afforded a hearing before the Superintendent or the Superintendent’s designee. (2) The accused may be represented by counsel who shall have the right of examination and cross examination. (3) Testimony before the Superintendent shall be under oath. (4) A record of the hearing shall be made. At the request and expense of any party such record shall be transcribed with a copy to the other party. (5) The decision of the Superintendent shall be based upon sufficient legal evidence. If the charges are supported by such evidence, the Superintendent may refuse to issue, or revoke or suspend a license, or otherwise discipline an individual. A suspended license may be reissued by the Section at the direction of the Superintendent. (d) All decisions of the Superintendent shall be final and conclusive. Where the applicant or licensee is in disagreement with the action of the Superintendent, the practitioner may appeal the Superintendent’s decision to the Secretary within 30 days of service or the postmarked date of the copy of the decision mailed to the individual. The appeal shall be on the record to the Secretary as provided in the Administrative Procedures Act, subchapter V of Chapter 101 of Title 29 (§ 10141 et seq. of Title 29). (e) All decisions of the Secretary shall be final and conclusive. Where the applicant or licensee is in disagreement with the action of the Secretary, the practitioner may appeal the decision to the Superior Court. (1) An appeal pursuant to this section must be filed within 30 days of service or the postmarked date of the copy of the written decision and order of the Secretary is mailed. (2) An appeal pursuant to this section is on the record without a trial de novo. (3) The Secretary’s decision to deny, revoke, suspend or otherwise restrict a person’s license is not stayed upon appeal unless so ordered by the Superior Court.

Del. Code tit. 24, § 2315 Pawnbroker’s insurance.

Every person applying for a license to conduct the business of a pawnbroker shall first effect an insurance policy against fire for $50,000 for the protection of goods, pawned or pledged.

Del. Code tit. 24, § 2316 Rate of interest.

No person conducting the business of a pawnbroker shall ask, demand or receive a greater rate of interest than 30 percent per month on any loans secured by pledge of personal property.

Del. Code tit. 24, § 2317 Unlicensed pawnbrokers, secondhand dealers or scrap metal processors.

(a) Any pawnbroker, second hand dealer, or scrap metal processor operating without the required license may be issued a cease and desist order by the Division and will not be permitted to operate without first obtaining such license. (b) Whenever, in the judgment of the Director pursuant to authority of the Superintendent or the Superintendent’s designee, any pawnbroker, secondhand dealer or scrap metal processor has engaged in any acts or practices which constitutes a violation of any provision of this chapter or any rule or regulation or issued thereunder, the Director may request the Attorney General to make application to the Court of Chancery for an order enjoining such acts or practices for an order directing compliance and, upon a showing by Director that such entity has engaged or about to engage in such acts or practices, a permanent or temporary injunction, restraining order or other order may be granted.
Source: DE Code (Official Site)URL: https://delcode.delaware.gov/title24/c023/sc01/index.htmlFetched: 10/4/2026