Archive for the ‘Pawn Shop Stories’ Category
Monday, August 26th, 2013
From NY Times Dot Com
Platinum Card and Text Alert, via Pawnshop
By STEPHANIE CLIFFORD and JESSICA SILVER-GREENBERG
Linda Ballard, 61, uses the word “love” to describe her banking relationship, lauding the ease of cashing her bimonthly paycheck, the convenience of text alerts about her balance and the features on the platinum card that she was upgraded to in July.
But she is not getting all this from a bank. She is getting this array of services from a pawnshop — part of an industry that has long had a reputation of taking advantage of vulnerable customers handing over prized possessions in exchange for cash.
As banks zero in on more affluent customers who promise twice the revenue of their lower-income counterparts, close branches in poor areas and remain stingy with credit, pawnshops are revamping their image and stepping into the void to offer financial services.
“The way the banks have tightened up so much on making small loans and making equity loans, we’ve kind of evolved into, I like to call it the poor man’s bank,” said Robbie Whitten, chief executive of Money Mizer Pawn and Jewelry of Columbus, Ga.
There are, however, plenty of potential drawbacks, consumer advocates say.
Some loans from pawnshops can come with interest rates as high as 25 percent. And fringe financial operations, the consumer advocates say, can imperil lower-income customers’ ability to save for the future. Without a traditional checking or savings account, borrowers often pay more for basic financial transactions like cashing checks, paying bills and wiring money, financial counselors say. And because pawnshops do not seek or report matters affecting credit scores, pawnshop banking makes it hard for customers to build credit history.
“Consumers need to be aware that the products don’t always carry the same protections as those you would get from a bank,” said Tom Feltner, director of financial services at the Consumer Federation of America.
How fast the pawnshop industry is growing is unclear, but the industry association estimates there were 10,000 pawnshops in early 2012, the latest figures available, compared with about 6,400 in 2007. That expansion is, in part, fed by the rising number of Americans whose tarnished credit effectively bars them from the mainstream financial system. The growth has attracted the attention of the Consumer Financial Protection Bureau, a recently formed regulator that has been scrutinizing pawnshops, along with other nonbank lenders like payday loan operators.
EZCorp, a publicly traded operator of pawnshops, reported that total loan balances swelled 22 percent to $44 million in its most recent quarter.
Another publicly traded lender, Cash America International, told investors in June that the company’s fortunes were growing as more “traditional consumer lenders are exiting the market.”
As a result, pawnshops are offering services like check cashing, Western Union money transfers, bill payment and prepaid cards to customers who are “getting forgotten in the banking system,” said Jerry Whitehead of the Pawnshop Consulting Group.
The services are not, generally, big moneymakers for the shops. The main attraction is that they bring in traffic, and many of those shoppers go on to buy items from the pawnshop or to take out a pawn loan themselves — and that is where the stores make their money.
The basic business of pawnshops is, of course, a financial service. If a man walks in and hands over, say, a watch, the shop will lend him money based on a percentage of the item’s value. The customer has a set period of time to pay that back, usually one to four months. If he pays it back in time, and pays the interest, he gets the item back. If he does not, the pawnshop sells the item.
Pawn loans are so profitable simply because of the high interest rates pawnshops can charge. Interest rates vary by state and range from 2.5 percent to 25 percent a month, the industry group the National Pawnbrokers Association estimates. So a 30-day loan on a $150 item would give a pawnshop a profit of up to $37.50, while a four-month loan could mean a profit of $150. Pawnshops may also charge fees for things like storage and lost tickets.
Yet for many customers who have been denied credit because of checkered financial histories, an instant loan from a pawnshop can feel like something of a miracle — at least at first — consumer advocates say.
But the high interest rates can plunge borrowers already on precarious financial footing deeper into debt, consumer advocates say.
Emmett Murphy, a spokesman for the pawnbrokers’ association, said about 85 percent of loans were paid off, and pawnbrokers would much rather see a loan repaid than deal with selling a pawned item.
La Familia Pawn and Jewelry, a chain based in Winter Park, Fla., that focuses on Hispanic customers, began offering bill-paying services this summer and will add Western Union and prepaid debit cards soon, mostly because customers wanted convenience, said its chief financial officer, Woody Whitcomb.
“Some customers actually asked if we could be their bank, which we can’t, because we’re not licensed to take deposits,” Mr. Whitcomb said.
La Familia charges $1.50 for each bill paid and uses the standard Western Union rates, but the point is to get customers using its much more profitable pawn loans.
“The pawn business will always be our bread and butter,” he said, “but if we can give customers other reasons to come into our stores, that will increase traffic.”
David Sanchez, 38, who lives in Hanes City, Fla., says he uses his local La Familia shop as “an interim banking system.” For money between paychecks, he regularly pawns a gold chain in return for a $100 loan for 30 days, with a $25 fee at the end — even though he has a checking account and a credit card. Now, he is paying bills and cashing checks at La Familia. “I really do not go into my bank,” Mr. Sanchez said.
Pawn America, a Minnesota chain, has gone a step further in emulating banks: building financial centers with a separate entry that abut most of its pawnshops. Go in one way, and you can hock your ring. Enter the adjoining room, and you see “nice, private teller windows, and that’s our financial center. You’re going to be served by somebody wearing a white shirt, a tie, very professional,” said Chuck Armstrong, chief legislative officer.
And its services look awfully similar. Under its Payday America operation, customers can get a one-year line of credit of up to $1,000 without putting down an item. And this year, it introduced a platinum version of its prepaid debit card with express-lane checkout, 5 percent cash back on purchases or 5 percent extra on loans, and free check cashing.
Ms. Ballard, of St. Paul, is a Pawn America customer who received the platinum card in July. She said she was initially wary of the industry.
“The first time I went to a pawnshop, I looked around to see who was looking at me go in,” she said. Now, though, despite her bank checking account, she cashes her paychecks at Pawn America rather than using direct deposit. And she loves her new platinum card.
She has other financial products, she said, and, “I would give them all up but that one.”
Tuesday, June 25th, 2013
From Inc Dot Com
Christine Lagorio | Inc.com staff
What The Pawnbroker Knows
Les Gold, the entrepreneurial star of the cable series Hardcore Pawn, on what his pawn emporium has taught him about business, succession, and economic forecasting.
Les Gold, patriarch of the Detroit-based American Jewelry and Loan and subject of the series Hardcore Pawn, has been in the pawn business since he was a kid working in his grandfather’s little loan office and store. Today, he runs a 50,000-square-foot pawn emporium in a former bowling alley off of 8 Mile Road. Gold says his 50-employee business attracts 1,000 customers each day, who put down items they own in exchange for cash, agreeing to pay it back with 3 percent interest within three months. Recently, as the economy has slowly been picking up, American Jewelry and Loan is also doing a brisk business in selling the items–watches, electronics, prosthetics (yes, prosthetics)–that go unclaimed. In talking with Gold briefly while he was in New York City promoting his new book, For What It’s Worth: Business Wisdom from a Pawnbroker I asked him about what Wall Street–and entrepreneurs just starting out–can learn from his peculiar multi-generation family business.
How did you pitch the show to producers?
I didn’t! They came to me. Twice. At first, Seth, my son, turned down the producers. He said, “no way.” My daughter, Ashley said, “no way.” But I said, “yes!” So to try to keep control of me, they agreed and did the show. Three years and 120 shows later, I don’t think they have any regrets.
Why’s that? Don’t they argue a lot on the show?
Honestly, the show has brought us a lot of business. Our shop in Detroit has become a tourist destination. They come from Australia. They come from the Netherlands. In the old days people might not have wanted to know what a pawnbroker had to say.
Your new book is banking on the idea that nowadays, people do want a little business advice from a guy who resells jewelry.
One of the reasons I did the show is I wanted to change the perception of what pawn shops are–change the stigma from the ’70s movie with Rod Steiger [editor's note: he's probably referencing the 1964 Sidney Lumet film, The Pawnbroker, which is about a Holocaust survivor who operates a pawn shop in East Harlem]. I wanted to show them what a well-lit, well-run business we have.
It’s interesting to me that your business can be seen as an economic indicator of sorts.
Wall Street can learn from us. It’s simple: When the pawn line is long, the economy is bad. When the redemption line is short, people are hurting. And the inverse is true: When the pawn line is short, the economy is good. When the redemption line is long, people are doing better. Wall Street should contact us every three months. I can forecast what the economy is going to do in the next three months. We can tell you how many people are working.
So what does your business right now indicate for the economy this summer? Is it still turning around?
As I see three months from now, people are working. People are not as desperate as they have been. The amount per loan has dropped about 10 percent. People don’t need as much as they did three months ago.
When the economy is good, though, isn’t your business destined to sink?
Even though the loan business has gone down slightly recently, our retail sales have grown about 22 percent. When the economy is OK, pawn shops do OK. When the economy is bad, pawn shops do OK. That’s why they’ve lasted 3,000 years. If we lose in one area, we gain it back in another.
Your show is one of two featuring pawn shops on TV right now. Do you have a rivalry with Pawn Stars?
I’ve never looked at the Joneses. My way of thinking is: If I have my eye on what you’re doing, I’m taking my eye off what I’m doing. Their show is sort of “Antiques Roadshow.” Our show is “what happens in an hones-to-goodness pawn shop.” But we’re not talking about Coke and Pepsi here. We are just pawn shops trying to survive.
What’s the strangest thing you’ve ever accepted as a pawn?
Well, we once got a prosthetic eyeball. We didn’t take that one, but we do take prosthetic limbs.
As in plural prosthetic limbs?
Sure. And one time we had a $100,000 Elizabeth Taylor broach. I know she owned it because they had the papers.
Your grandfather got you into this business, and your kids are continuing it. How are you going to ensure this business survives in its notoriously fickle industry?
There’s nothing I want more than for blood to run this business. But, sure, no one can be me. So, I’m not going to retire. I’m going to make sure of its continued success myself. They’ll have to carry me out when I die. And then I’ll come back to haunt them! Generation after generation, one of those generations is going to ruin the business. What I like to see is that both Ashley and Seth want is to make American Jewelry and Loan the best it can be. The only way the business will survive is if they keep their eye on the prize. Every day when we get to work is we kiss each other hello. And every night we kiss each other goodbye. And that’s why it’s going to survive.
What advice do you have for entrepreneurs just starting out?
You have to wake up every morning knowing how bad you want it. Every dream is accessible if you work hard enough
Tuesday, May 7th, 2013
From Terra Dot Com
Father-son road trips can be powerful and life-changing. But while most excursions wind up at Cooperstown or the Grand Canyon, Robbie Whitten’s yearlong odyssey with his dad ended with him behind the counter of a pawn shop–and eventually, at the helm of an empire.
In 1979 the billionaire Hunt brothers were working to corner the market on silver, ultimately driving up the price from $11 per ounce to almost $50 per ounce. That was when Robbie, then 18, and his father, Robert, hit the road, setting up booths in hotel lobbies around the South, buying unwanted gold and silver jewelry and selling it to a smelter. It turned out to be a genius business, and by the end of the year they had 30 teams of buyers crisscrossing the country.
But when the market collapsed a year later, the Whittens found themselves with a warehouse full of jewelry in Columbus, Ga. “We ended up with really nice pieces that were too pretty to melt down, so we bought some showcases,” Robbie Whitten remembers. “We decided we didn’t want to be in the retail jewelry business, so we said, ‘Let’s try a pawn shop.’ Thirty-three years later, that original location is still going strong, and we’ve expanded.”
The younger Whitten now has seven Money Mizer franchise locations in Georgia, Florida and Alabama; he’s preparing to open five more this year, and eight to 10 per year after that. He let us behind the counter to learn how he has built his business. Hello, Dalí: Robbie Whitten of Money Mizer.Photos© Rob Culpepper
How do you deal with the seedy reputation of the pawn business?
We’ve been fighting negative images for years. Pawn shops can be kind of shady, but the reality TV shows have been a big boost to the industry and its reputation. Now a lot of mom-and-pop shops are cleaning up their stores to take advantage of the interest.
There are a lot of new customers coming in who say they’ve never been in a pawn shop and want to check it out. We don’t want them to feel like they’re in a pawn shop. On one side we want them to think they’re in a fine jewelry store, and in the sporting goods section we want them to think they’re in a Bass Pro shop, with a department store in between.
What sets Money Mizer apart?
Our stores are different from about 95 percent of pawn shops. We’re almost like a retail store, and a lot more customer-friendly–and we’re on the good side of town. Our employees don’t have long hair or tattoos running down their arms. We attract more of a white-collar clientele.
Are the upscale customers buying or pawning?
Our loans have definitely increased to the white-collar side. There are lots of guys, like real-estate agents, who were making six figures that are now living on 40 grand. They can’t borrow $3,000 or $4,000 from the bank anymore–they just don’t make those types of personal loans. The term we like to use in the industry is “underbanked.” But these people have lots of nice tangible assets. They might have a Rolex or a $500 Ping driver they can sell.
But people like to shop here, too. Recently we had a lawyer come in and buy a flawless 2-carat diamond from us. Then he took it to a jeweler and had it put in a mounting. We could have done the exact same thing for less, but he said he didn’t want his fiancée to know the diamond came from a pawn shop!
Thursday, February 14th, 2013
From Post Bulletin Dot Com
Heard on the Street: Couple win wedding — in pawn shop
Jeff Kiger | Posted: Wednesday, February 13, 2013 11:37 am
When Julie Ohm checked her email Saturday night, she got an early Valentine’s Day surprise.
“Oh my God, we’re getting married Thursday,” she told her longtime fiancé, Dennis “Cub” Lunde. “And it’s going to be in a pawn shop.”
It turns out Ohm and Lunde are the winners of Laser 101.7′s “Once A Pawn A Wedding” contest. That means they are getting hitched at National Pawn’s southeast Rochester store on Valentine’s Day.
Instead of a more traditional minister to lead them in their vows, Rochester radio personality Big Mark Clark will officiate the ceremony as they walk down the aisle… of the pawn shop at 426 Third Ave. S.E. The whole event will be broadcast live on the radio at about 5:45 p.m.
“I’ve never met him, but I hear he’s a nice guy. I guess I’ll get to know him Thursday,” Ohm said.
The couple has been engaged since 2009, and Ohm said they are excited about winning this whirlwind, if quirky, wedding. However, this isn’t actually the prize they were hoping for when they entered the contest at the urging of a friend.
A ZZ Top-style 1933 Ford Coupe initially got their attention, and they’re still in the running for the national contest drawing for the car.
“It’s great. This is what we’ve always intended to do,” she said. “And what the heck, we might win a cool car, too.”
The couple first dated in the 1980s and then went their separate ways. They reconnected a few years ago and rekindled that old flame. These days the pair work together on their Rochester business, Dennis Lunde Flooring. It was formerly known as Custom Carpet Craft.
So how do they feel about tying the knot in the middle of a pawn shop?
“It’ll be different, but it is going to definitely be unique. That fits us pretty well. Cub is a pretty unique character,” Ohm said.
Beside providing the wedding “chapel,” National Pawn is providing wedding rings for the couple. Carousel Floral Gift & Garden Center is handling the flowers. A reception will follow at Shar’s Country Palace with dinner provided by Wildwood Sports Bar and Grill. The wedding cake is coming from Coldstone Creamery. The newlyweds’ special day will wrap up with an overnight stay at Courtyard by Marriott.
Tuesday, December 4th, 2012
From Denver Post Dot Com
By Claire Martin
If power tools, musical instruments, jewelry and DVDs are on your shopping list, consider shifting your attention from Santa’s workshop to a pawnshop.
Go with a discerning eye, some knowledge about how to assess the object of your quest, and this question: “What are your warranty terms?”
“It varies by location, but most of the chains offer some kind of warranty, and check with individually owned shops,” says Eric Garman, president of the Colorado Pawnbrokers Association and regional director of operations for EZ Pawn.
“In my shop, we offer a six-month warranty with everything we sell. It’s a satisfaction-guaranteed warranty. Three months down the road, if you don’t like it, you can bring it back. We’ll take care of it, just like any other retailer.”
His insights might surprise people who associate pawnshops with shady merchandise and even shadier characters .
But step into a pawnshop these days — EZ Pawn, Big Daddy’s Jewelry & Pawn, or Wedgle’s Music & Loan, a Denver institution — and it’s like any other no-frills retail store.
The lights are bright. The merchandise is sorted by category. Unlike the History Channel’s “Pawn Stars” line — “You never know what’s going to come through that door” — the inventory in a typical pawnshop is actually pretty predictable. (What’s on the shelves typically is the collateral forfeited by its former owners after failing to pay back a short-term loan.)
There will be guitars hanging with violins and mandolins, power tools on sturdy shelves, DVDs and Blu Ray discs in narrow racks, glittering jewelry displayed under glass counters, cel phones, and an assortment of electronics — flatscreen TVs, laptop computers, tablets, MP3 players, even the odd Sony Walkman CD player.
“What happens when you don’t have much experience with pawnshops, you go in for whatever reason, and people cannot believe the value they can get,” Garman said.
“I tell our team, ‘If you can just get ‘em in the door, and you’re clean, you’re friendly, and you offer good service, you’ll have a customer for life.’ I never knew, till I started working in pawnshops, what good deals they had. Now I always check pawnshops before I buy new.”
As secondhand shoppers know, it’s important to be flexible. Go to a pawnshop hoping for Season Two of “My Name Is Earl,” and you’ll probably be disappointed — until you find a full boxed set of “The Sopranos” for $10 per season.
Finding exactly what you want could mean trekking from one shop to the next. Different pawnshops tend to feature different specialties and quirks.
EZ Pawn, a regional chain, reliably carries pawnshop standards — power tools, electronics, jewelry, laptop computers, cellphones — and some surprises. The EZ Pawn on Larimer Street near downtown Denver, for example, recently had a Jagermeister tap for $100, several sets of Pinnacle tires ($780 for a set of four that looked new), and a Juicy Couture handbag ($150) loaded with charms.
Wedgle’s Music & Loan, now in its fourth decade at 1122 Broadway, carries more guitars, drums, keyboards and violins than some conventional retail stores that specialize in musical instruments.
The staffers are knowledgable, each specializing in different instruments and equipment. (Wedgle’s amplifier specialist could teach a college class in historical and technical sound equipment.)
A lot of parents buy their child’s first musical instrument here. Wedgle’s also gets plenty of traffic from professional musicians, who sometimes cast an envious eye on the collectible vintage posters, including a Grateful Dead New Year’s Eve promotion.
Big Daddy’s Jewelry & Pawn only sells bicycles that come with their original bill of sale, a policy that eliminates stolen bikes. It also means Big Daddy’s doesn’t have very many bicycles, but the bikes they’ve got are excellent. Recently, Big Daddy’s had a 2010 Orbea racing bike (with a Littleton Cyclery receipt for $1,181 hanging on the handlebars) for $700. Its Mavic wheels alone were worth that much.
Big Daddy’s also is renowned in local pawn circles for its impressive collection of Apple products, including desktop iMacs and laptops. Don’t expect thrift store prices, but recently Big Daddy had a $2,400 iMac with a 32-inch screen that was loaded with approximately $11,000 of software including Final Cut Pro, which retails for $300.
A caveat about buying electronics from pawnshops: Be cautious as co mputers and vacuum cleaners both can harbor viruses and other problems.
“I don’t buy electronics from pawnshops,” says Chris Cassera, who often sells to pawnshops the gold and silver jewelry he culls from thrift store grab bags.
“My experience is that electronics, there’s usually a reason they’re in the pawnshop. Even with laptops, it’s hit or miss.”
His advice to pawnshop novices: Get the details on the warranty — does it cover only manufacturer-identified problems? Will you be able to replace the DVD player that suddenly won’t open?
One more tip: Look at the price tag. At EZ Pawn and some other pawnshops, there will be several numbers listed. The first is the current price, or the price when the item first went out on the floor, often next to a date. The second postdates the first by two or three weeks, reducing the original price by 10 percent or more discount. The third price is an even deeper discount.
“It’s a gamble, but everything on the floor is already listed on eBay,” Cassera said.
“What’s good about pawnshops is finding something obscure. I found a “Masters of the Universe,” the Dolph Lundgren one released in the 1980s, for $3 in the clearance section at a thrift store. Not a scratch on it. I’d looked everywhere for that, and you couldn’t find it because it was so outdated. That’s what you find at a pawnshop.
Claire Martin: 303-954-1477, firstname.lastname@example.org or twitter.com/byclairemartin
Monday, November 5th, 2012
From Daily Mail Dot Co Dot UK
The rise of designer pawn
By Kathryn Knight
In these asset-rich, cash-strapped times, more and more of us are banking on a new breed of high-end moneylenders. Kathryn Knight investigates
When Tiffany Jackson’s husband James was made redundant from his job in the City last year the couple quickly felt the pinch. They put their six-bedroom home in Weybridge, Surrey, on the market, but while they waited for it to sell, money was tight. ‘A couple of credit-card bills came in,’ recalls Tiffany. ‘Normally it wouldn’t be a problem with my husband’s salary, but we were struggling.’
Traditionally, the solution might have been a bank loan, or a begging phone call to friends. Instead, Tiffany, 32, a housewife who is used to dressing in designer labels, took a different tack. ‘A friend suggested I pawn a couple of my more expensive items. Initially I was taken aback because I’d never come across the idea before – you associate the word with the seedier end of the high street. But it made sense. I may not have much going into my bank account, but I had a wardrobe full of expensive stuff. The shop she mentioned was just down the road, so I decided I had nothing to lose by going in.’
The following day, Tiffany found herself in the offices of a pawnbroker handing over an £18,000 crocodile-skin Chanel handbag – a present from her husband – and her £6,000 Rolex watch. In return, she got a cheque for £4,000 – enough to settle the credit-card bills that were worrying her. She has seven months to repay the money at a monthly interest rate of around five per cent, meaning she will need to find more than £5,400 to get her items back. However, she is confident that the imminent sale of her house will free up her cash. ‘But if it doesn’t, although I loved my watch and bag, there are worse things to lose,’ she says. ‘As long as you’re not emotionally attached to whatever you’re handing over it’s a stress-free way to get cash.’
Women such as Tiffany are not the sort of clientele that you traditionally associate with pawnbrokers. Nevertheless, in these asset-rich, cash-poor times they are increasingly emerging as their lender of choice. Last year, the National Pawnbrokers Association – whose membership has grown from 530 to 1,800 in the past five years – reported a 15 per cent rise in business, in part fuelled by this new breed of high-end customer. Then there’s the internet, where online brokers offer loans against everything from jewellery to fine wine. At borro.com loans of up to £1 million are available, while at pawnbrokeronline.co.uk applicants can be offered money after a transaction lasting as little as a minute.
Meanwhile, over at Prestige Pawnbrokers in Weybridge (a commuter belt with some of the UK’s most expensive houses) designer handbags and dresses – Hermès, Chanel, Dior – jostle for space with expensive jewellery in the locked units behind the discreet shop front that, with its plain counter and sofas, looks more like a bank. The most interesting stuff isn’t on the premises, but in underground vaults containing rare books and paintings, and secure garages that host sleek rows of prestige cars. All of them have been pawned by their owners in exchange for ready cash.
Owner James Constantinou, a former property developer, set up the company in 2009 in the early months of the recession after realising that there was a gap in the market providing loans to the cash-poor asset-rich. ‘I knew people living in million-pound houses with Ferraris on the drive who were short on funds – people who had built up wealth in cars and fine paintings but couldn’t use them as collateral at the bank,’ he says. ‘They come in here and within ten minutes they can walk out with a large amount of cash or a bank draft.’
This is, says James, in direct contrast to the banks, who introduced stringent new credit policies in the wake of the recession. Such is his flexibility, he adds, that he offers something known as ‘bill of sale’ loans on cars – also called ‘logbook loans’ – which allows him to take legal charge of a vehicle while the owner continues to drive it. ‘Our interest is registered with the High Court, and the owner pays back the loan monthly, rather than at the end of the term, so it’s a bit like getting a car on finance. It’s an attractive option for people who need to free up money but also need to keep their car on the road.’
Moreover, it is women who are helping to fuel James’s booming business. ‘When we opened women rarely came in unaccompanied by a man, but we’ve seen a huge shift in that sector. Now they form around 65 per cent of our client base. Before, these women could have walked into the bank and said, “My house is worth five million, I just want a few grand on my bank card”, and that would have been fine, but now that’s not possible unless you’re in full-time employment, which doesn’t apply for many of these women. So they come here.’ What are they spending the money on? Anything, it seems – school fees, dentistry work, credit-card bills, even to start their own business.
‘If you’re not attached to what you hand over, it’s stress-free cash’
The rise in popularity of pawnbrokers doesn’t come as a surprise to those in the know either. Jasmine Birtles, personal finance expert from moneymagpie.com, agrees that the industry has now attracted a new kind of client – the ‘secretly poor’. ‘These are the people who appear to be doing well – the children in private school, the expensive cars on the drive – but behind the scenes they have cash-flow problems, which means they are behind on the mortgage and can’t get any money from the bank. For them, the sort of discreet service offered by a pawnbroker can be an attractive proposition.’
A pawnbroker typically lends up to 50 per cent of the value of the item on a seven-month contract, with interest rates set at anything from 1.49 to nine per cent each month (compared with an average 19.5 per cent annually on a bank overdraft and 17.3 on a credit card). The contract is redeemable at any point, but if the customer can’t repay the loan plus interest at the end of the term, the pawnbroker keeps the items and sells them to recoup the value of the loan – either through their own shop or via auction houses and specialist dealers. Nonetheless, James insists that customers know exactly what they’re signing up for. ‘There are no hidden charges,’ he says. ‘And for the first three months our terms are not dissimilar to a bank, especially when you factor in the fact that we have no arrangement fee.’
James will consider anything of worth, using a team of specialists to assess an item’s value. A Lowry painting, a Picasso and a rare book collection worth half a million have all passed over his counter, latterly joined by two rare vintage wedding dresses. They belonged to 45-year-old single mother Stella Brody, who pawned her dresses to buy stock for her antiques business when her bank refused her a loan. ‘My supplier had new goods, so I needed to act quickly,’ she says. ‘Someone suggested the pawnbrokers and the wedding dresses sprang to mind.’ One was Elizabeth Arden and one Dior, the former belonging to her mother and the latter originally for sale in her shop. ‘I didn’t want to part with them, but I knew that once I got my new stock I’d recoup my money quickly and I was right. I was given £7,000 and three months later, I was able to go in and pay £8,000 to get them back. It’s high interest, but I viewed it as a short-term cash injection that enabled me not only to survive but to thrive.’
According to James most customers, like Stella, hope to see their goods again. ‘With smaller items such as jewellery, 60 to 70 per cent of owners come back, while on bigger items, such as cars, it’s 85 to 90 per cent.’ Like most pawnbrokers, he prefers to return items than sell on. ‘If we have to sell we’ve effectively lost a client,’ he says. ‘Whereas we get customers who come back and pawn the same items two or three times whenever they need a short-term injection of cash.’
Nor is Stella the first woman to turn to the pawn merchants to help her business (in 1971, Diane von Furstenberg famously pawned a diamond ring to launch her now iconic wrap dress). However, not everyone is keen to bang the drum for this new breed of lending, among them Jasmine Birtles, who cautions against anyone relying on it too heavily. ‘In general, I am not pro the pawnbroking industry as there are a number of dodgy dealers out there and interest rates are high,’ she says. ‘They’re not as dangerous as taking out a payday loan, but I would advise people to go in with your eyes open and only if you think cheaper options are not available to you.’
Nonetheless, for some women, a visit to the pawnbroker has proved not only useful but strangely liberating. ‘There’s certainly no shame in it,’ says Tiffany Jackson. ‘It’s not our fault we ended up in the situation we did, but this way I feel I am taking control my own way.’
Jane Wall-Budden, a 29-year-old mother of two from Byfleet, Surrey, recently pawned two watches, a Cartier and a Rolex, and used the £3,000 she got for them to inject cash into her own growing business, Bumpsters, which markets custom-made cot bumpers. ‘I needed a cash injection to invest in a new product, which I felt would market well with my own invention. It made good business sense, but the bank just saw me as a little cottage industry and weren’t interested.’ The watches were languishing in her bedside table drawer. ‘Frankly, it was the only way I could get my hands on a lump sum. I would say to anyone who was in the same position and had something lying around that wasn’t of huge personal value to do the same.’
‘Money has been tight since I got divorced,’ says Lorraine Giacomelli, a mother of two from Richmond, Southwest London, ‘and when my bathroom flooded earlier this year I didn’t have the funds to fix it. I wasn’t covered by my insurance, and while I could have got a loan or used a credit card I didn’t want to be in debt — which is why I didn’t ask my ex-husband either.
‘He had been very generous while we were married and a friend pointed out that I probably had thousands of pounds’-worth of goods tucked away that I could pawn. So I rooted through my wardrobe and found a pair of £1,000 Christian Louboutin shoes, a £2,000 Chanel handbag and a Hermès bag that had originally cost £17,000.
‘At the pawnbrokers I was offered £4,000 for the lot, at a monthly interest of five per cent. I knew that designer bags go in and out of fashion so I didn’t expect an enormous amount for the Hermès relative to what it had originally cost. The important thing was that it was enough to fix my bathroom. Although I am a stay-at-home mum, with careful budgeting I’m confident I can raise the money to get them back — and if I don’t and I lose the bags and shoes, I won’t be totally heartbroken. That’s why it’s a win-win situation — I got the money I needed and I’m not left in debt in real terms. I felt quite proud that I didn’t have to ask anyone for money. I’d do it again in a heartbeat if I had to.’
Tuesday, September 25th, 2012
From Asia One Dot Com
They help customers out of tight spots
Pawnshop businesses thrive as stigma associated with pawning items lessens. -TNP
Benita Aw Yeong
Tue, Sep 25, 2012
The New Paper
Mr Joshua Lam, an accounting graduate who together with his family members, runs Wing Teck Pawnshop located in Serangoon North.
SINGAPORE – Whenever he is asked about his occupation, his answer momentarily stuns people.
“I’m a pawn star,” declares Mr Joshua Lam.
They soon realise they were thinking of a different word when he explains: “My family runs a pawnbroking business.”
This 30-year-old accounting graduate is learning the ropes of pawn valuation from his father and uncles, who helm Wing Teck Pawnshop located in Serangoon North. The business was started by his grandfather 80 years ago.
Mr Lam joined 21/2 years ago after working several years for a multinational company.
“After a few years of working outside, I thought to myself: Why make money for others when I can make my own?” he says.
Figures from the Registry of Pawnbrokers show that the industry is doing well.
In 2008, there were 114 pawnbroking outlets here. As of last month, the number hit 185.
The amount of loans given out in 2011 was almost S$5 billion compared to almost S$2.8 billion in 2010.
But Mr Lam, the youngest of three children, says the work is not easy.
He clocks in nine hours a day, six days a week, and makes a modest S$3,000 a month.
But he enjoys honing his communication and bargaining skills, as well as learning what it takes to run a business.
“When I first started, I used to be a little sarcastic when I had to deal with rude or unreasonable customers.
“I have learnt to be patient and polite in all situations,” he says.
Mr Lam, who is fluent in the Hakka dialect, says his limited ability to speak other languages and dialects is a challenge.
“An Indian customer tried to teach me a couple of Tamil phrases, but when I repeated it to another customer, she couldn’t understand me at all,” he says, with a laugh.
He finds meaning in helping customers through a tough spot.
“Some customers become friends and you get to hear the stories of their lives. A few are so appreciative of how we’ve helped them out in tight financial situations that they even buy lunch for all of us,” he says.
These days, items can be pawned in exchange for cash to be used for home downpayments or for investment purposes.
Director of operations of the Valuemax chain of pawnshops Yeah Lee Ching says: “We have investment-savvy customers who pawn the gold bars they own for cash to re-invest and make more money.”
Customers of pawnshops can pay one per cent interest on the loan amount for the first month, and a rate of 1.5 per cent for subsequent months.
Business at pawnshops like 23-year-old company, Valuemax, is thriving.
Ms Yeah, who runs a total of 15 outlets here with her father and two brothers, says there are plans to add another outlet sometime next year.
She explains that traditionally, people would only patronise pawnshops when they were in dire need of cash to cover a rough period.
“For years, there has been a stigma attached to pawnshops, especially because of the way it has been portrayed in television serials.
“This is slowly changing, with greater marketing efforts,” she says.
Some pawnshop chains have even taken to employing celebrities to front their brand, hoping to give it greater legitimacy and presence in the market.
Over the years, the interior designs of many pawnshops have also received face-lifts to cater to the growing number of clients.
Traditionally, valuators stood on an elevated platform behind bars and peered down at customers as they handed their items over.
These days, valuator and customer stand on even ground and see eye-to-eye through glass windows.
Warm yellow tones also replace harsh white lights in many shops, giving the shops a more welcoming atmosphere.
There is also a new group of clientele who visit pawnshops looking for exotic designs and a good bargain.
Says Ms Yeoh: “When The Little Nyonya drama serial was all the rage, there were people who came scouting for ‘intan’ – traditional Peranakan jewellery.”
‘Convenient’, ‘little paperwork’
Whenever she is short on cash, she turns to the pawnshop for “help”.
The 56-year-old assembly worker, who wants to be known only as Madam Ho, earns around S$1,000 a month.
Her finances get tight when she decides to spend “slightly more” on shoes or skincare products, she says.
And so, for the past four years, she has been visiting the pawnshop when in need of ready cash. She pawns several pieces of white gold jewellery – which she bought 10 years ago – for S$500 to S$1,000.
In order to pay the minimum exchange rate (one per cent for the first month), Madam Ho renews her pawn tickets every month.
“It’s very convenient. There is also very little paperwork involved,” she says.
Madam Ho is not the only one who finds pawnshops convenient. Housewife Madam Laura, 60, also finds them handy.
“Sometimes I forget to bring my cash pouch for my shopping trips, so I take off one jewellery item I’m wearing, like a ring or bangle and pass (the pawnbroker) my IC.
“In exchange, I get just enough cash – S$50 or S$100 – for my groceries,” she explains.
She redeems her items and also pays the one per cent interest charge – an additional 50 cents to a dollar.
It also doubles as a safe-deposit facility, where she keeps her dowry and precious jewellery collection.
Every few months, she visits the shop to pay the loan interest and renew the pawn ticket, so that her items do not get sent for auction.
“I have about S$300,000 worth of jewellery stored with them,” she says.
The retired private tutor also enjoys browsing for “new” jewellery items at the pawnshop.
“I don’t mind that it’s second-hand at all. Some of the pieces can be very good deals. I could pay $8,000 for a brand new bangle at a boutique in Serangoon.
“I can find a similar piece which costs only S$5,000 to S$6,000 at the pawnshop,” says the self-confessed shopaholic.
Friday, September 7th, 2012
From Boston Globe Dot Com
By Bella English
Goldstein, president and CEO of Empire Loan, is a third-generation pawnbroker who just opened his seventh store, in Lowell. The others are in Boston, Worcester, Stoughton, New Bedford, and two in Providence. The weak economy has hurt many businesses, but has helped the pawn business because people need loans quickly, with no credit checks. Goldstein just got a permit to open an eighth shop in Lynn.
‘My grandfather was a pawnbroker in the Bronx, and he passed that store on to my father, so I’ve been doing this ever since I was a kid.’
Q. What exactly is a pawnshop? My only notion is from movies, when some shady-looking character pawns his grandmother’s wedding ring to pay for his booze.
A. I’ve been fighting that image my entire life. My grandfather was a pawnbroker in the Bronx, and he passed that store on to my father, so I’ve been doing this ever since I was a kid. Pawning is the original form of lending. Pawn-type loans date back to ancient China, and to the House of Medici.
Q. How does it work?
A. If people need to borrow money, they bring in something of theirs, like jewelry or a watch. Let’s say someone brings in a Rolex. I get it appraised. We usually loan at 70 percent of the value. So if the watch is worth $1,000, we’ll loan $700. If the owner says yes, we make out the terms of an agreement. He has to show a government-issued photo ID, and we take a picture of him and the item. I give him the money, and he gives me the watch. I put it in an envelope and it gets stored in a safe.
Q. So how does he get it out of hock?
A. We charge 3 percent interest on the loan, and he can come in anytime up to six months after the loan and pay us back. If he comes back in three months, he would owe us $763 and he would get his watch back.
Q. What if he doesn’t come back?
A. He’s under no obligation to pay back that loan, because I have more than $700 in my hand, with that watch. But 88 percent of people who borrow money from us pay back their loan and get their merchandise back. If they don’t come back after six months, I put it in the showcase to sell.
Q. Who are your clients?
A. Most of them are blue-collar workers. We don’t see extremely impoverished people because they don’t own things.
Q. How has the weak economy affected your business?
A. The job market is down, certainly there are more people who need money. We have seen more suburban folks come in. But the economy hasn’t affected my business as dramatically as the price of gold has. When I started my business in 1985, gold was trading for somewhere between $275 and $325 an ounce. Five years ago, it started to spike, and gold has gone up to over $1,700 per ounce.
Q. What does that mean for your business?
A. It means the gold chain my customers took off their neck to pawn in 1985, with a $50 loan, now I can loan $200 on it. It’s good for my customers, and it’s good for me.
Q. What do you think of the pawnbroking shows on television?
A. I’ve spent my life trying to legitimize my business, and then the reality shows come on. Some of them are kind of fun, and I get more calls because of them. But “Hardcore Pawn” is my worst nightmare. This guy is awful. He lies to customers. He cheats them. It drives me crazy.
Q. Tell me about a memorable customer.
A. Noel had some mental challenges, a low IQ. He was a nice man, very simple. He ended up in a shelter, where he met Marie. She was also low IQ, and she was very sweet. One day, he’s dressed a little nicer. He borrows on Marie’s bracelet and says they are going to city hall and getting married. I asked him what they were going to do after. He says, “Not much.” I told him to come back to the store. I go to the bakery up the street and say, “You’ve got to make me a wedding cake, fast.” She put together a little tiered cake and we had a cake-cutting ceremony at the store for Noel and Marie.
Q. Have you ever pawned anything?
A. No, I have never needed to. I’ve been really fortunate and I feel an obligation to make sure that we as a company give back to the community. Through our Empire Loan Charitable Foundation, we recently pledged $125,000 to the Mattapan Community Health Center for its new construction. It’s a beautiful space.
Thursday, September 6th, 2012
By Wendy Osher
Reality TV film crews will be in old Wailuku Town this week where filming begins on the proposed Pawn Stories pilot episode.
Employees of Kama’aina Loan – Cash for Gold have been encouraging patrons to bring in unique items, Maui memorabilia, and vintage finds from old Hawaii.
“It doesn’t have to be bizarre, though. Hawaiiana items are sure to be a hit with the mainlanders,” said store bloggers on the company’s website.
Filming at the Market Street location begins at 9 a.m. tomorrow, Thursday, September 6, 2012. Crews will return again at 9 a.m. on Friday; and if more footage is required, a final day of filming will commence at 10 a.m. Saturday. Filming will also take place on location during the First Friday festivities in Wailuku Town.
The show is being filmed by a crew from Illinois, which is trying to sell the series to interested television networks.
The Pawn Stories pilot is completely unscripted and features half a dozen pawn shops from across the nation.
Pawn Stories has produced two series of television shows based on real pawnshops. Its president, Robert McCullough, a pawnbroker himself, says nothing on his shows is fake. He videotapes what happens as it happens.
Richard Dan, owner of Kama’aina Loan, the oldest, largest pawnshop and precious metals buyer on Maui, asks his customers and friends, old and new, to come by, have fun and help publicize and promote Maui and its interesting people.
“There are a lot of reference books upstairs, and with a combined century or so of experience, there are not that many things that have never come over the counter before,” the company’s blog stated.
So, if you’ve got something that could stump store employees, your inquiry could make the cut as as a Pawn Stories pick.
The pawnshop will be open from 9 a.m. to 6 p.m. Sept. 6 & 7, and 10 a.m. to 4 p.m. on Sept. 8.
Thursday, June 28th, 2012
From Tulsa People Dot Com
Tight economic times, as well as two popular reality TV shows, have spurred renewed interest in a longtime buying- and-selling industry: pawnshops.
By Matt Gleason
A few days before Christmas, Jennifer Langham peered into the jewelry case at Golden Pawn II, a sprawling 14,000-square-foot pawnshop just north of Cherry Street. Closing time was approaching on this Tuesday evening, but the recently engaged 23-year-old was set on buying her fiancé, Michael Hood, his own engagement ring.
“I thought it was a neat idea to get him a ring, (too),” she says.
At the same time, Hood was prowling the store for a prize not measured in karats but in gauges — 12 of them.
Of course, a shotgun isn’t forever, like the diamonds on Langham’s impressive engagement ring, which the couple also purchased at a pawnshop.
The future Mr. and Mrs. Hood could have purchased Langham’s engagement ring at a high-end jewelry store, but the allure of a bargain was difficult to resist.
For dedicated pawnshoppers, these are department stores unlike any other.
Where else can patrons shop for jewelry just a few steps away from an arsenal of weapons and a classic arcade-style “Centipede” machine? Or perhaps tools, golf clubs, guitars or fine art?
“I actually got it 50-percent off,” Langham says proudly of her ring, which she estimates would have cost 10 times more at a traditional jewelry store. “I do kind of have expensive taste, but it’s just as nice as any ring that would come from anywhere else.”
A cyclical industry
Finding incredible pawnshop deals like Langham’s could be attributed to the current economic crisis. Since 2007, 30 million Americans annually pawn everything from electronics to jewelry to secure short-term loans that do not affect their credit history, according to the National Pawnbrokers Association (NPA).
Most are average-income adults working in regular jobs who need the extra cash to cover basics such as the electric bill, the rent or a tank of gas, according to the NPA. The organization notes that the average pawn loan in 2010 was $100, up from $80 in 2008.
According to a report from the Oklahoma Department of Consumer Credit, 32 pawn brokers were operating in Tulsa as of November 2011, with a total of 319 active, licensed pawn brokers operating in Oklahoma.
In Tulsa, Kelly Knowlton is a local authority on pawnshops. He owns Golden Pawn II and two Tulsa County Pawn locations. The 61-year-old also serves as president of the Oklahoma Pawnbrokers Association.
Since the economic downturn began more than four years ago, Knowlton estimates that Golden Pawn II has had a 10 percent to 20 percent increase in business, with more people pawning items. Knowlton looks for the three Gs when buying merchandise — guitars, guns and gold.
Over at Second Hand Rose Pawn Shop, located on East Third Street, John Brazil has also witnessed the pawn business change.
Brazil, who has worked at the store for 35 years, says, “Unlike what people think, our business tracks right along with the economy. When the economy is down, sales are down and loans are up.”
Ray Rose is another fixture of the local pawn business. He is a member of the Rose family, which has owned several local pawnshops since Rose Co. Pawn Shop opened in 1912, and Rose Co. Pawn Shop remains in downtown Tulsa at 316 E. Second St., with Rose behind the counter.
“We’re kind of cyclical,” Rose says of the pawn industry, “so sometimes we do better in hard times; it just depends.”
Additionally, pawnshops are attracting more first-time middle-class customers, pawnbrokers say.
In late December, Anthony Littlejohn, a 28-year-old Army veteran who served in Iraq, had just taken a job delivering for Pizza Hut in his Jeep Compass.
Trouble was, he soon needed to replace a tire, but he was low on cash and several days away from a paycheck.
With no other option to cover the unexpected tire expense, Littlejohn pawned his 40-inch television and his desktop computer for a $250 loan from Golden Pawn II. Soon he was back to work and no longer driving on a spare tire.
“Middle-class America is pawning more because of the economy,” says Knowlton, of Golden Pawn II. “I think if they get a speeding ticket, or anything unexpected, they come here and pawn a guitar, or whatever, to get enough money to get them by.”
Tony Mills, founder of Big Time Pawn on East 11th Street, says, “You see a new mix of a lot of people who have never been in a pawnshop in their life, but they come through now (to sell items) because they hit on hard times.”
Small-business owners, especially those in the construction business, are a part of the growing customer base, Knowlton says.
“They come to pawn whatever they can to make payroll for next Friday,” he says. “They’ll come in and pawn a truck, or some of the tools they don’t need, and get a $1,000 or $1,500 loan.”
Dee Ann McHenry, owner of Big Time Pawn, has noticed an increase in older customers who pawn.
“The retirees are just not able to make it on their retirement income,” she says. “Twelve years ago, we hardly had any elderly people come in.”
Mills recalls a woman in her 60s who had a valuable ring she often pawned, but every time her children came to town for a visit, she hurried to get it out of pawn.
“Then I guess she ran into some bad luck,” Mills says. “We didn’t hear from her for over a year, but we still kept her ring in the back.
“Finally, she called us and wanted to know if the ring was for sale. She started crying when we told her she could have the ring back for what she owed us. She was so thankful. It was pretty rewarding.”