From Wavewatchers

BILOXI

With three decades in the business, the Pawn Shop Queen of Biloxi has learned to roll with the flow.

And the flow has been in her favor these days.

“I’ve seen people from all social levels and income levels come in to the shop,” said Mary Eaves, who owns Edgewater Pawn and Biloxi Pawn, both on Pass Road. “They’re just having a cash shortage at the moment.”

Rising unemployment rates and a tanking economy are good news for pawn brokers.

The Department of Banking and Consumer Finance in Jackson has issued licenses for 33 pawn shops in Hancock, Harrison and Jackson counties this year. The total in the state is 228, said Deputy Commissioner Theresa Brady.

That’s a slow decline from 2001 when there were nearly 300 statewide, she said.

Kevin Riley, who owns Dad’s Super Pawn in Pascagoula and Gulfport with his brother Mark, said pawn shops have vastly improved their respectability as a legitimate financial institution for those needing a little help between paychecks.

“Loan amounts are up,” he said. “There are more people borrowing money on bigger items, boats, campers, larger diamonds and Rolexes.”

It works like this: A customer offers something of value to the pawn broker in exchange for a 30-day to 60-day loan at 25 percent interest, the maximum allowed by law. The customer can keep paying the finance charge each month and leave the item in “hock” or pay back the principal and interest to get it back.

Or the customer can forfeit the item with no repercussions or a report to a credit agency.

Riley said the percentage of people walking away from loans has risen.

“But by no means has it bottomed out to an alarming point,” he said.

Phil Webb, who owns Best Pawn and Jewelry in Bay St. Louis, said he’s noticed more new customers coming in for short-term loans. “We’re seeing new faces we’ve never seen before,” he said.

Webb has given loans recently on Rolex watches and multi-carat diamond rings. “We’re seeing some of the nicer things from people who don’t normally need loans,” he said.

Because of the nature of the business, pawn shops also have become retail shops, where savvy shoppers go to look for bargains on used merchandise. Selling the forfeited merchandise turns a profit for the pawn brokers.

The economy “has made people become smarter shoppers,” Webb said. “They’ll come in and buy it pre-owned to make their money go further. Everybody’s trying to stretch a dollar these days.”

Eaves’ has modeled her stores after trendy mall shops. Her customers come to her because she has a reputation for quality merchandise and friendly customer service, she said.

“Pawn shops actually flourish when the economy is bad,” Eaves said. “People are still spending money, they’re just not spending as much as they did.”

Customers expect clean, well-lit stores with quality merchandise, Webb said. They expect to be treated with respect when making a loan as well, he said.

“You have to treat everyone the same,” he said.