A first step to answering a question like this is to look at the title of the story. Titles offer clues as to what a narrative is about, and hence what purpose the author has in writing it. Titles act as framing devices that prime the reader to expect certain things that reveal a story’s overall agenda and meaning. What does the title “What You Pawn I Will Redeem” suggest to you about the significance of the story?
One response is to look at the meaning of the words. Pawn and redeem are lingo used by pawnshops. A pawn is an item of value given to a pawnshop in exchange for a loan. The item can then be taken back or "redeemed" by the same customer who left it after they return and repay the loan with interest. However, some items are never redeemed and remain in the pawnshops for other customers to buy, which we can assume is the case with Jackson’s grandmother’s regalia. Whoever pawned it at the pawnshop never returned to redeem it.
But both pawn and redeem have other meanings, and many more connotations. For instance, a pawn is also a person used by others for their own selfish purposes, a person taken advantage of and manipulated as a dupe, puppet, or tool. It is also used as a word for hostage. Likewise, redeem carries other definitions. It can also be the act of making something that is bad or faulted better or good again, or the atonement for mistakes or errors made in the past.
These additional connotations carry romantic notions, more serious and larger notions than those given by the bare-bone pawnshop lingo of pawn and redeem, which only pertain to the exchange of commodities and money. By using a title that is loaded in such a way, Alexie is suggesting that greater meaning can be found in the unsentimental and utilitarian setting the story takes place in. And in fact, much of the aspiration of Jackson’s character is to find the romantic and beautiful within the ugly, un-idealistic everyday life he exists in.
This is the reason he identifies his task of regaining the regalia as a romantic quest, or he asks the three Aluets to sing for him, or frequently makes humor out of the disturbing and disgusting experiences he undergoes. As he points out, “We Indians are great storytellers and liars and mythmakers.” He’s identifying the Native American culture as one that weaves stories into everyday life, a culture of creating myth and extraordinary meaning out of the ordinary and insignificant. The story implies that this is how the culture responds to suffering.
Sherman Alexie’s story shows how Native Americans have been marginalized and relegated to the lowest form of everyday life in America. They exist below the poverty line, homeless and without the means to live comfortably. It’s an unromantic, un-idealistic place, where the friends that Jackson has such as Rose of Sharon and Junior abandon him and are abandoned by him, and where he frequently succumbs to self-destructive behaviors like drinking. But by presenting an environment where Native Americans have lost so much, and had their identities and way of life essentially "pawned" by the reality of modern American life, Alexie is also able to exhibit the resilience of Native American culture to find redemption from their suffering through myth, story-telling, humor, and romanticizing the everyday.
The purpose of “What You Pawn I Will Redeem” is to show this happening through Jackson’s story, beginning with his feeling of identity loss and disappearing. “Piece by piece, I disappeared. I’ve been disappearing ever since.” And ending with the successful recovery of an identity when he is able to literally redeem his grandmother’s regalia:
“I took my grandmother’s regalia and walked outside. I knew that solitary yellow bead was part of me. I knew I was that yellow bead in part. Outside, I wrapped myself in my grandmother’s regalia and breathed her in. I stepped off the sidewalk and into the intersection. Pedestrians stopped. Cars stopped. The city stopped. They all watched me dance with my grandmother. I was my grandmother, dancing.”