From Hampton Roads Dot Com
By Joanne Kimberlin
© May 8, 2011
When word came last week that Osama bin Laden was dead, a crowd gathered at Lynnhaven Pawn Shop.
Why? Gold prices spiked briefly after the world’s most-wanted terrorist was killed.
Propelled by economic uncertainty, the precious metal shot up $50 an ounce, prompting folks who keep an eye on such things to scour their jewelry and deposit boxes.
“When I saw the news on TV Monday morning, I knew we’d be busy,” said Nathan Segal, who opened Lynnhaven Pawn nearly 30 years ago. “When I got to work, people were lined up outside ready to sell.”
Pawn shops find themselves at the intersection of a surprising range of events. The bin Laden rush, which lasted until gold prices fell that afternoon, had global fuel. Other runs are the product of much more personal concerns.
Consider the calendar. Easter. Thanksgiving. Christmas. Or even today, Mother’s Day. Segal can track them all with a look inside his vaults.
“We’re at our emptiest just before holidays,” he said. “People come in and pay the loan on Grandma’s china because family is coming to dinner and they don’t want to be embarrassed. Then the next week, they bring it all back.”
Fact is, the business isn’t nearly as wild as it looks on TV, where shows like “Pawn Stars” – the History Channel’s hit series – portray a stream of colorful characters and rare finds.
In real life?
Not so much.
The majority of people who walk in Segal’s door just want to borrow a few bucks on collateral that tilts toward the mundane – a necklace, a bag of golf clubs, a set of silver flatware.
“The real business isn’t something you’d want to watch on TV,” he said.
That doesn’t mean there’s nothing of interest. Segal poked through a tray of jewelry, coins and other keepsakes people had recently brought in to sell.
“Everything here has a story,” he said.
Take the solid gold police badge from New York City, engraved “From your friends – 1970.” Or the massive rings that marked an athlete’s glory days – a Tar Heels bowl game, an Admirals’ championship. Or the small gold band inscribed for an even more momentous occasion: “To love, cherish and obey.”
“Apparently, not anymore,” Segal said with a shrug and a grin.
Divorce. Death. Unemployment. Moving on. Pawn shops are a witness to life’s crossroads, and a barometer of the times.
For example, Segal has noticed a boom in customers who can only speak Spanish, evidence of more immigrants in Hampton Roads. He can gauge the job market by the amount of flat screens, power tools, laptops and guitars awaiting redemption in his storage rooms. He can assess the economy by the number of loans he’s floating – currently around 6,000, which is fewer than two years ago when times were really tight.
And, every now and then, someone does show up with a curiosity that could make the cut on “Pawn Stars.”
Segal reached deep into one of his many safes to retrieve a mysterious lump. Fifteen years ago, it served as collateral for $600 borrowed. Segal says 90 percent of his customers repay their loans, but those who don’t – like the lump’s owner – forfeit their merchandise.
Most items are resold in the shop, but not the lump. Segal peeled back its wrappings to expose the grayish ridges of a giant tooth – a fossil from a woolly mammoth that lived tens, perhaps hundreds, of thousands of years ago.
“Things like this,” he said, “I just have to keep for myself.”
Segal comes from a line of pawnbrokers, the family behind Littman’s, operating in downtown Norfolk since 1892. And while it’s not well known, America owes a lot to this ancient profession. Legend says Queen Isabella of Spain hocked her jewels to bankroll the explorations of Christopher Columbus. As late as the 1950s, pawning was America’s most common form of consumer credit.
But what was once a reputable industry slid into seediness over the past few decades, rife with shady players and stolen goods.
Now, better oversight is helping to polish the trade’s image. Shows like Pawn Stars are dispelling its taboo, or at least fading it.
“I discovered this place about a year ago,” said Dawn, a customer in Segal’s shop who didn’t want her last name in this story. “Women used to never go inside a pawn shop.”
Dawn said Segal’s small showroom – clean and well-lit – made her feel more at ease. And besides, her family needs help.
“My husband is in the ministry and I’m in real estate,” she said. “With the economy the way it is, we’re living from bill to bill. We have our college rings here – for the second time.”
State law caps pawn shop interest at 5 percent per month, a rate that can add up, especially when combined with the 5 percent monthly storage fee commonly charged for holding collateral.
“This is intended to be a short-term loan,” Segal said.
It doesn’t always work out that way. Customers can keep a loan alive indefinitely as long as they pay the interest and storage fee. Pieces of jewelry have been left with Segal for 10 years. One loan has been out for 20.
“They’ve paid more than the jewelry is worth,” he said. “But they’re OK with it. They’re using us like a storage place.”
That security appeals to military members, who often pawn personal firearms before deployments. Others pawn because they can’t qualify for bank loans, or they don’t want family or friends to know they’re short on money, or they like the fact that only their collateral is at stake if they can’t pay back what they borrowed.
The average loan at Lynnhaven Pawn is only around $200, but Segal has handed over as much as $50,000. One of his largest loans was on a set of 1933 baseball cards featuring Babe Ruth and Ty Cobb. A leather belt from the Holocaust era rated a similar loan; 40 gold coins from Nazi Germany were sewn inside its secret compartment.
Segal turns to experts – often with the Chrysler Museum – to authenticate items like that.
“Everybody has Adolf Hitler’s dagger, bought off eBay,” he said. “They’re very disappointed to find out it’s not the real thing.”
Stolen goods are always a concern, one reason Virginia Beach, like many cities, restricts the number of pawn shops within its boundaries. Only 15 are allowed – a ceiling that’s always maxed out – and pawnbrokers need a license approved by a circuit court.
Transactions are logged into a computer and emailed daily to police, including a detailed description of the merchandise and the ID and Social Security number of the person who brought it in. Most police departments have a pawn unit that checks the log against a list of items reported missing in the area.
Nowadays, according to the National Pawnbrokers Association, less than 1 percent of pawned goods are identified as stolen.
“Real criminals know better than to come here,” said Segal, who makes it a practice to collect a photo and thumbprint from every seller as well.
When trouble does turn up at his place, it’s usually the domestic kind: Teens who filch from mom’s jewelry box; couples who split and try to sell each other’s stuff; battered spouses – women and men – desperate to raise some cash to get away.
“They come in with black eyes and busted lips,” he said. “We keep a list of shelters we refer them to.”
Unlike on TV, there isn’t much haggling. The final price doesn’t drift far from the initial offer.
“We have to make money, too,” said Willie Showell, Segal’s assistant manager, “and if something winds up sitting in the back for months, it can be worth even less when it comes out.”
Electronics become outdated particularly fast, one reason pawn shops are only interested in the latest gadgets. Solid loans are the ones made on collateral that grows more valuable with age.
Jewelry and firearms are stored inside separate vaults, watched over by an electronic field that triggers an alarm when disturbed. Segal figures he’s invested close to $50,000 in anti-theft systems. Walls are reinforced. Ceilings are wired. He says he’s the only pawn shop in the area outfitted with a system that sprays tear gas when it detects body heat or shifts in air movement or pressure.
A vibration detector guards valuables inside the “fragile vault” – a small storage room crammed with Lladro and Hummel figurines, silverware and candlesticks, autographed baseballs, antique decoys, ship models and swords, expensive artwork and Lionel trains. Someone borrowed against a platinum record awarded to the Molly Hatchet band. Another loan is secured by a law brief written and signed by Abraham Lincoln.
Discretion is part of the profession. Regular customers of Segal’s often look the other way when they see him in public.
“They don’t want to have to explain anything to their spouse,” he said. “I guess it’s sort of like being a priest. Everything is private.”
As for “Pawn Stars,” Segal has seen the show but rarely tunes in. Too much footage is devoted to the deal.
“It’s not really like that,” he said. “One customer just went through five or six tissues just trying to talk to us. You don’t see that on TV.”
Joanne Kimberlin, (757) 446-2338, firstname.lastname@example.org