Pawnshops Flush in Gold Rush Fever

From the Rochester Democrat and Chronicle
Matthew Daneman, Staff writer

The shelves of Park Avenue Trading Post are packed with what once was your stuff — a wall of DVDs and video games that you used to watch and play, stacks of electronics and power tools you used to use, musical instruments and wristwatches you once had.

“A lot of broken stuff we’ll still buy — broken PlayStation 3s, broken Xbox 360s, some broken electronics still hold a good amount of value,” said Benjamin Dodge, manager of the Rochester secondhand store. “For replacement parts, or some are an easy fix. If we think we can sell it, we’ll probably buy it. Bikes won’t move in the winter. Skis don’t ever move. Golf clubs are hard.”

On a daily basis, people go into secondhand stores, jewelry stores and pawnshops around the Rochester region with their belongings and walk out with cash in hand. And while economic downturn has wreaked havoc on the livelihoods of millions, it has done gangbusters for the resale industry. According to the Association of Resale Professionals, the number of the nation’s resale stores has grown 5 percent annually over the past three years. Today there are more than 25,000 resale, consignment and thrift stores in the nation, according to the trade group.

“There’s not been a time in the U.S. since the Great Depression that there’s been this kind of demand for pawnshop goods and services,” said Steve Krupnik, an Indiana-based pawnbroking industry consultant and coach and author of Pawnonomics. “The industry is extremely busy.”

Because of the high price of gold and the down economy, “We’ve been so busy every day, it’s been unbelievable,” said Betty Frey, who works at Jewelry & Coin Exchange on West Ridge Road in Greece. The price of gold reached multiple record highs last week, including Thursday’s price of $1,055.40 per ounce on the New York Mercantile Exchange.

And pawnshops and secondhand stores have become big, Wall Street-style business. Texas-based Cash America International Inc. — which operates Cash America Pawn, SuperPawn pawn stores and Cash America Payday Advance and Cashland short-term loan operations and Mr. Payroll check-cashing centers — had revenues of $1 billion in 2008 and profits of $81 million.

But the economics of selling an item to a secondhand store or pawnshop depends on how quickly you want the money, how willing you are to go through the pains of selling and shipping the item, and how popular the item for sale is, Krupnik said.

Pawnbrokers and secondhand retailers typically will give 50 percent to 75 percent of the fair-market value of an item — more if it’s in high demand, he said.

When getting rid of a possession through such a store, Krupnik said, a key first step is to have some idea of what the market value is. “That can be easily found on the Internet,” he said. “It’s never been easier to value items.”

When people balk at the money offered at Oxford Trading, the Rochester secondhand store will show them the going prices found online, owner Mark Landon said.

“Then they’ll understand where we’re coming from,” he said. “‘I can’t believe this price, this is what I got for it new.’ Well, it’s not new anymore.”

Most of the jewelry bought at Jewelry & Coin Exchange ends up resold to refiners and melted down, and the price paid reflects the carats, the weight and the going price for gold that day, Frey said. The store does resell some jewelry in its retail location.

“We’re one of the ones that pay the best around,” she said. “People can’t believe how much more we pay than some other shop they went to.”

But the best way to get maximum value for jewelry is to try to sell it to another consumer, said Jerry Ehrenwald, president of the International Gemological Institute.

Those options can range from having a jewelry store sell the goods on commission to going through some route such as eBay, Ehrenwald said. Selling it directly through some kind of advertisement, though, could invite robbers more than buyers, he said: “You don’t want to advertise you have jewelry for sale at your home.”

Dodge said the money that Park Avenue Trading Post offers for merchandise brought in can vary widely.

“It depends on the condition. The age plays a huge role,” he said. “Say we’re talking about digital cameras — a Nikon that’s two years old and a Kodak that’s two years old. Kodaks don’t hold their value at all. The price plummets.”

Original packaging and instruction manuals, meanwhile, are a big plus, Dodge said.

“After a while, it’s not too hard to tell the quality,” he said. “The brand names go for a little bit more. We have a few pricing guidelines we go by online. We have guidebooks every now and then we go through.”

Landon said business — at least of people selling goods — picks up heavily at the end of the month. But the recession has clamped down on some traffic in what is typically a two-way street, he said.

“People think the pawnshops are doing so well. They are in a sense, I guess, but I’m buying a lot of things from people when they’re hurting, but no (customers) are buying,” Landon said. “People can say business is booming, but it’s … booming in one direction.”

MDANEMAN@DemocratandChronicle.com

Share and Enjoy: