A warehouse receipt is a document on which are itemized the goods stored in a warehouse. The receipt represents title to the goods. Warehouse receipts can be used to sell goods without having to deliver them. Instead, the new owner continues to store the goods in the warehouse. There are two types of warehouse receipt, which are:
Negotiable. This version specifies that the goods are deliverable to the bearer of the document, which means that they can be used as collateral for loans. If the borrower defaults, the lender takes over the warehouse receipt and can sell the goods to obtain payment of the loan.
Non-negotiable. This version specifies to whom the goods shall be delivered.
Warehouse receipts are commonly used for the storage of many kinds of commodities, such as precious metals.