Posts Tagged ‘Las Vegas’
Friday, September 2nd, 2011
From Finance Dot Yahoo Dot Com
Secrets From a Pawn Star
By Jeff Macke | Breakout
The business model of the pawn shop dates back over 3,000 years and remains largely unchanged: A customer in need of some cash gets a loan from a merchant, using a personal possession as collateral. The pawn shop holds the property for a predetermined amount of time, charging interest on the loan. If the customer can pay his debt before the deadline, he gets his property back. If not, it’s the pawn shop’s to resell.
While the basic transaction is much the same as it was in ancient China, the reputation of the pawn shop industry has fluctuated wildly. Pawn shops have often been portrayed and viewed as vaguely threatening stores located in seedy parts of town, where only desperate customers would dare venture to.
Today, the modern pawn industry has become something else entirely. Many of these shops, which also operate like small banks, are publicly traded companies and are becoming cultural phenomena. The embodiment of the new era of the pawn shop is Rick Harrison, star of History channel’s monster hit Pawn Stars and author of the book “License to Pawn”. Harrison, who runs the Gold & Silver Pawn Shop in Las Vegas, Nevada recently sat down with Breakout to discuss the economy, misconceptions about his business, and the endless number of curios he comes across when dealing with the 3,000 to 4,000 customers coming through his shop every single day.
Harrison immediately addressed the lingering perception of pawn shops preying on the down-and-out, or especially in Las Vegas, desperate gamblers down to their last chips. Despite the tough times, nearly 80% customers reclaim their goods; meaning a pawn shop transaction is more like a bridge loan for the roughly 25 million Americans without a traditional bank account, rather than a legitimized loan sharking operation.
Which isn’t to say the pawn shop business is impervious to the economy. Most assume the stores do better in a weak economy; but they don’t. Harrison explains that it’s the nature of buying and selling that changes based on economic conditions.
“When times are good, I’m buying less stuff and I’m selling more stuff. When times are bad, I’m buying at lot of stuff but it isn’t moving like it used to,” says Harrison. Reflecting the building slump in Vegas, there’s a glut of construction-related goods coming into his shop, but very little demand from buyers. As any student of economics will tell you, too much supply and little demand means lower prices. “At this point, we have just stopped taking construction tools altogether. That’s how bad construction is in Las Vegas,” says Harrison.
While Harrison’s front line view of his local economy is troubling, the beauty of the pawn shop business is that it can capitalize on whatever trend is hot at the moment. A car dealer is stuck selling cars regardless of vehicle demand. In contrast, the players in the pawn industry specialize in trends. Of course that brings us to the trading craze of 2011: Buying and selling gold and silver.
“I cannot keep gold and silver bullion in my stores at all,” the retail rockstar said. “We buy it every day. Every morning I put it in my showcase and it’s gone by noon.”
But if you’re ready to run to your local pawn shop to sell your jewelry, think again. Nobody in retail ever made money overpaying for goods then selling them at a discount. Harrison, like any successful pawn business, will offer a discount to the price you see quoted in financial news, and then sell your stuff at a premium if you don’t pick it up before the end of his 120-day holding period. It’s not personal, it’s just business.
Pawn shops are also the last place to go if you’re looking for a sucker to overpay for your junk. Harrison’s store carries as many as 22,000 different items at any given time, or as he puts it, the shop has “one of everything.” After 30 years in the business, he says it’s “pretty simple” to spot counterfeits. And if an item is questionable, he calls in an expert to vet the goods. It’s a good thing because there are plenty of hard-to-value oddities at any pawn shop, particularly one based in Las Vegas.
Harrison’s store alone has a fist full of Super Bowl rings, four Olympic gold medals, the boots that jockey Hall of Famer Willie Shoemaker wore in his 8,000 race, and a Pee-Wee Herman doll sealed in its original packaging. But those aren’t anywhere near the strangest thing on his shelves. At the moment Harrison is in possession of a 200-year old Japanese “pillow book” of the type he says were once given to Japanese brides on their wedding nights.
Ok then. Harrison says many of these rarities are more valuable to him as museum-type pieces than retail items. Museums may be the last thing you think of when considering pawn shops, but it’s a new day for an old industry. Whether to hock an heirloom or simply check out the modern version of Ripley’s Believe it Or Not stores, it’s time to change the way you think of the pawn shop business.
Tags: consumer credit, Las Vegas, License to Pawn, Pawn Loans, Pawn Stars, pawnbroker, pawnshop, Rick Harrison
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Monday, June 20th, 2011
From Newsweek Dot Com
It’s a Hot Time to Be a Pawn Star
Hocking your diamond ring used to be shameful business.
Now everyone’s doing it.
by Gary Rivlin
To gauge the state of our economy, you could talk to the economists and other so-called experts. Or you could attend the annual pawnbrokers’ convention, as I did, held last week at Caesars Palace in Las Vegas. There, I met Lee Amberg, his face sunburned from competing in the annual golf tournament that these days opens every Pawn Expo.
A 23-year industry veteran with a pair of pawnshops in suburban Chicago, Amberg says he could tell as far back as 2006 that hard times were coming. “Suddenly we saw our demographic expanding,” he says. “We had more customers coming to us from middle-class communities and even upper-middle-class communities. We saw the erosion of the economy before you were even reading about it.”
Except, who listens to a pawnbroker? “We have our thumb on the true pulse of the economy,” Amberg says with a sigh, “but we’re laughed at or ridiculed because we’re in the pawn business.”
These are fat times for the pawn industry—in no small part because these are hard times for much of America. Pawnbrokers are lending money to a new breed of customer—the kind who drives up in a sports car, lugging a large flat-screen TV to hock—and it’s not like their traditional clientele are any better off than they were a few years ago. Pawn is even hot in the popular culture, as reality TV has spawned no less than three shows starring pawnbrokers.
At first glance, the Pawn Expo could have been any trade show of its kind: booths for exhibitors selling their wares (diamond and gold buyers, mainly), breakout sessions for the more studious conventiongoer (“10 Successful Steps to Becoming a Watch Guru”), boozy parties at night. And the brokers—1,300 attendees in all—made for a friendly, casual bunch, dressed in resortwear for the 100-degree Vegas heat. Still, most people think of the corner pawnshop as a forbidding place, dingy and depressing and smelling something like their grandmother’s attic. “I would describe image as our biggest challenge,” says Kevin Prochaska, who took over as president of the National Pawnbroker Association at this year’s meeting.
But changing that image is no easy task for these lenders of last resort. “If someone is coming to us, that’s the definition of a bad day,” a pawnbroker named Kathy Pierce told me. Apparently, there have been a lot of bad days for the people living near the two stores she and her husband own in central Illinois. The loan volume at both “is higher than it’s ever been,” she says.
If you’re a fan of the hit show Pawn Stars, you might think that what pawnshops mainly do is buy used stuff. But the vast majority are really loanmakers: that watch or wedding ring (usually the same watch or ring hocked the last time) serves as collateral for a loan that usually lasts from a few weeks to a few months. The amounts borrowed are typically small—$100 or less, just enough to make ends meet until the next payday. Four out of every five customers successfully pay off their loan and retrieve the item they’ve hocked.
But a pawn loan isn’t cheap. The fees charged work out to an annual interest rate of between 50 and 250 percent a year, depending on the state. Prochaska, the association president, defends the high interest rates by noting that “a lot of overhead goes into every loan.” That’s because pawnbrokers must store whatever a customer brings in—jewelry, mostly, in big cities, but plenty of weed trimmers, fishing poles, and power tools in less-urban areas. And there’s no guarantee that the pawnbroker will ever be able to sell the items if the borrower defaults. For some pawnbrokers, the sale of forfeited items has accounted for half their revenue, and a lousy economy means they get stuck with more inventory.
Yet for most pawnbrokers, the spike in loan volume over the past few years—and the corresponding increase in the fees they collect—has more than made up for the decline on the retail side. “It’s an awesome time to be in the lending business,” says Nancy Martin, a pawnbroker from North Carolina who has had her own shop since 1981. “Whether you’re talking about our traditional customers or the new people coming in the door, people are really hurting.”
Tags: consumer credit, Economic Indicator, Gary Rivlin, Las Vegas, National Pawnbrokers Association, Pawn Loans, pawnbroker, pawnshop
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Friday, May 20th, 2011
From Fox News Dot Com
‘Pawn’ Star Says Tough Credit Helping Pawn Industry
By Hollie McKay
Published May 19, 2011 | FoxNews.com
People love a good bargain, and shows about good bargains.
Audiences can’t get enough of History’s reality series “Pawn Stars,” which details the modern day madness behind one the world’s most ancient forms of trade.
“I always wanted to be a pawn broker because I always bought and sold stuff,” Rick Harrison, owner of the Gold & Silver Pawn Shop in Las Vegas, and star of the leading cable series told FOX411’s Pop Tarts. “(And I’m proud) that it is a good family show. I hear from moms all the time that it is the only show their whole family can watch together.”
But being family-friendly does require some slight modifications.
“The most bizarre thing I ever got was some really, really erotic art – it was about 250 years old from Japan,” he said. “I bought it because there is a market for it, but it’s a pretty difficult sell because it’s not like I’m going to display it in my store as my mom comes in and she really wouldn’t approve!”
But now that Harrison is a household name in many American homes, others are trying to use his business dealings to strike up their own fifteen minutes of fame.
“My biggest pet peeve is when people come in but don’t really want to sell anything; they just want to get on camera. It happens a few times a week,” he said. “We chat and I end up saying, ‘this item is really cool, I would love to film with it,’ and they’ll say, ‘well, I don’t want to sell it. I just want to be on TV.’ It gets really annoying, I tell them that’s not cool, and they won’t be on TV now.”
Time wasters aside, television exposure certainly has its upside.
The star pawnbroker told us that the store has now become quite the Sin City tourist attraction, bringing in a few thousand customers on a daily basis. Moreover, Harrison is also using his far-reaching platform to debunk the many negative connotations that have come to surround pawn shops over the past few decades.
“It’s an odd business, but for some reason if you see something on television about a bad pawn broker, everyone thinks all pawn brokers are bad. We’ve been vilified by Hollywood,” he said. “But back in the 1950’s, pawn shops were the number one form of consumer credit in the United States.”
But as a result of America’s weakened economy over recent times, the pawn industry is steadily becoming stronger.
“Congress has passed a few laws that have been making it harder for people to get credit, so it is making people come back to pawn shops, which is pretty good for me,” he enthused. “But my pawn shop is a lot different to most you’ll see. Not every pawn shop has Picassos on the wall.”
The popularity of “Pawn Stars” and the concept of showing Americans that old trash can be turned into treasure has since paved the way for a new History channel spin-off, “American Restoration,” in which Rick Dale of Rick’s Restorations in Vegas turns customers beloved and oddball artifacts into collectibles that look like new.
“People are passionate about this not only because of the economy but because they want something that makes them happy, a little boost, and by restoring their memory or family history I can do that,” Dale told us. “People want to restore things because they want to remember themselves.”
Furthermore, Dale – who is called on by a slew of stars including Christian Slater and Dick Clark to revive their goods – is trying to encourage viewers to buy U.S.-made products.
“We need to build America back up and I want to do it one piece at a time,” Dale said. “You can see how these old products last through and through, and what you’re buying today that isn’t built here in the U.S. is poorly made.”
Having brought back to life everything from beer machines and bicycles, to 1950’s diners and go-karts, Dale has discovered at least one key tool he now couldn’t live without.
“Nail polish remover,” he added. “It strips paint. It’s funny because in construction you use acetone to take paint off walls… so it is probably not good for your skin.”
“Pawn Stars” airs Mondays at 10/9c, and “American Restoration” airs Fridays at 10/9c
Deidre Behar contributed to this report .
Tags: consumer credit, Las Vegas, Pawn Loans, Pawn Stars, pawnbroker, pawnshop
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Thursday, March 17th, 2011
From Dispatch Dot Com
Agents pop in on ‘Pawn Stars’
The Air Force sent special agents to Las Vegas on Tuesday to grill Rick Harrison of Pawn Stars about his purchase of a guidance system for a missile used on F-4 Phantom fighter planes. Harrison and his team made the deal last week, TMZ.com reported. Two investigators visited Gold & Silver Pawn and asked to check out the guidance system and missile parts, a source said. The agents disassembled the system to make sure it was no longer active and didn’t contain any important information. The agents also inquired about the woman who sold the pieces to Pawn Stars. The seller said her father purchased the items at a military auction in the 1980s, and she had paperwork to prove it. A representative for the History network show insisted, “If the Air Force wants the missile back, we will gladly adhere to their request.”
Tags: consumer credit, Las Vegas, Pawn Loans, Pawn Stars, pawnbroker, pawnshop
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Tuesday, October 5th, 2010
From AZ Central Dot Com
Reality of pawn shops a little different from TV shows
By Richard Ruelas – Oct. 5, 2010 12:00 AM
The Arizona Republic
On one show, the pawn-store owner is trading in antiquities and working big deals. On another show, the pawn-store owner deals with an array of sketchy characters kept in line only by his beefy security guards.
Neither portrayal seems familiar to pawn dealers in the Phoenix area.
“That’s all glitz,” said Stan Grossman, owner of Glendale Pawn and Jewelry. “The truth is, just like anyone else, we have a normal business.”
Pawn shops have become the latest fertile ground for reality shows.
Both shows, “Pawn Stars” and “Hardcore Pawn,” invoke puns that capitalize on “pawn” sounding like “porn.” But each presents wildly different views of pawn-shop life.
“Pawn Stars,” set in a Las Vegas shop and airing on the History Channel, makes the pawn life seem like a daily “Antiques Roadshow.” People come into a suspiciously empty pawn shop with valuables – the Who’s contract to play at Woodstock, John Hancock’s signature, a Rolex watch.
The staff hems and haws over pricing, sometimes bringing in experts to authenticate and evaluate items.
The other show, “Hardcore Pawn,” airing on truTV, presents a seedier vision. Set in Detroit, it features customers from a broad spectrum – a recently released prisoner comes in with power tools, and a woman demanding the return of a pawned item long since sold must be escorted out by security guards. One desperate woman tries to sell her pets (and since the store had earlier purchased a baby alligator, anything is fair game).
But most days at pawn shops are not as exciting.
“We kind of fall in the middle,” said Robert Palagi, president of North Phoenix Pawn.
Of the two, Palagi said that “Pawn Stars” is closer to the truth than “Hardcore Pawn.”
“Not everybody who comes in here is a tweaker with pockmarks and a hypodermic coming out of their arms,” Palagi said. Note that he said “not everybody.”
Palagi said there can be a rough element to the crowd, but he can’t remember ever having to threaten somebody with a gun.
“Customers get rowdy, but it’s so few and far between,” he said.
Antiques also are rare, said Eric Baker, store director at Mo Money Pawn Shop in Phoenix.
“We don’t see them that often,” he said. “If I would base my business on that, I’d be out of business in two weeks.”
Baker said he mainly gets TVs, DVD players, tools, electronics, watches and jewelry.
“You’ll never see that stuff on the show.”
The transactions can be a little more colorful than what may occur at Macy’s or Nordstrom, a detail the shows can accurately portray.
“At a pawn show, we don’t have to have customer service,” Baker said. “It’s our way or the highway.”
Baker said the reality shows are changing reality at his shop slightly. More people are coming in looking for antiques, based on what they see on “Pawn Stars.”
“I don’t mind the attention,” he said, “as frivolous as (it) is.”
Grossman, of Glendale Pawn and Jewelry, agreed, saying that on one level the show does a service for pawn stores by explaining how the process works.
But Grossman said a camera crew might nod off in his store. The overwhelming majority of his trade comes from people pawning or selling gold jewelry. And most interactions are pleasant.
“Generally, people are always nice,” he said. “If you take the time to explain why you’re doing things, most people understand.”
What keeps him interested is the unknown, always unsure what might wander through the door. Most times it’s jewelry, but he’ll get samurai swords or barbell sets.
“People don’t understand the depth of knowledge that pawn shop people acquire through the years,” he said. “It’s amazing what people own.”
Tags: consumer credit, Detroit, Hardcore Pawn, Las Vegas, Pawn Loans, Pawn Stars, pawnbroker, pawnshop, Phoenix, Reality TV
Posted in Pawn Ecomomics | 2 Comments »
Monday, August 9th, 2010
From NNBW Dot Com
Pawn shops recapture lost ground
Rob Sabo, 8/9/2010
Strapped Nevadans once again are turning to their local pawnshop rather than a payday lender for an infusion of ready cash.
As payday-lending institutions cropped up throughout the state over the past decade, they siphoned off a great deal of business from northern Nevada pawnbrokers, pawnshop owners say. But regional pawnshops once again are seeing an upturn in pawn transactions — mostly because unemployed borrowers lack the means to get loans at paycheck advance businesses.
Dion Draper, partner for the past three years at Premier Pawnbrokers in Fallon, says many Fallon-area residents have exhausted their options at the town’s paycheck advance stores and have come in to his establishment to pawn their hard goods. They like the idea of pawning, he says, because there is no threat of legal action if they default on a loan.
“If they walk away from a loan, they simply walk away,” Draper says. Though business has spiked at Premier Pawnbrokers, Draper says he’s also seen a higher default rate and retail sales have lagged.
Dan McCassie, owner of Main Street Pawn in Fernley, says the town’s three payday lenders once drew off some of his clientele, but residents returned to his store to pawn items as the recession deepened in recent years in Lyon County.
Many people, McCassie says, already had borrowed money at Fernley’s three payday lenders and found themselves buried under interest rates that sometimes are higher than 500 percent on an annualized basis.
“They can only afford to do that so long before it completely breaks the bank,” McCassie says. “It is easy for them to write a check and get money, but it is so hard for them to pay the loan off.
“Some people no longer can get a cash advance,” he adds. “They have gotten one at all three places, and they are left with no choice but to pawn their hard goods.”
But pawnbrokers are getting more selective on items for which they’ll loan money. McCassie says electronics more than one year old are out, and jewelry and guns are the most-pawned items among Fernley residents. “Guns and gold are always safe loans,” McCassie says.
Bill Burnbaugh, 62, owner of Capitol City Loans at 5951 Highway 50 East in Carson City, has seen a dramatic dip in clientele seeking auto pawn loans since payday lenders entered the cash advance market.
Burnbaugh says the number of auto loans written at Capitol City has declined by 80 percent in recent years as the cash-needy turned to loans at payday lenders since they don’t have to put up any collateral.
Burnbaugh has been in business in Carson City since 1977 and has moved four times for bigger operating space. He’s currently in a 20,000 square foot building on 1.5 acres.
Erminia Drobkin is the Nevada state representative for the National Pawnbrokers Association and owns Pioneer Loan and Jewelry in Las Vegas, the oldest pawnshop in Las Vegas — it was founded in 1931. She says the average pawn transaction in the state is about the same as what a payday lender would give, but payday lenders remain a popular alternative to pawn shops because customers don’t have to part with their valuables.
Payday loans were legalized in Nevada in 1997, and Nevada is one of the few states in the country that doesn’t cap fees or interest rates. In 2007 Nevada lawmakers tried to curb some of the business practices of unscrupulous payday lenders, which charge interest rates as high as 300 to 500 percent a year. Loan limits now are capped at 25 percent of a borrower’s expected monthly income.
In 2007 there were more than 1,200 people directly employed at nearly 400 payday lending institutions in the state, a study by IHS Global Insight of Lexington, Mass. found. The industry generated nearly $42 million in tax revenues for Nevada.
Drobkin says most people in the state who pawn jewelry usually pay off their loans because of a sentimental attachment to the piece — and because they can re-pawn it later if necessary.
Pawnbrokers also say they have seen an increase in foot traffic at their stores due to the hit television show “Pawn Stars” on the History Channel. The reality show chronicles the daily ebb and flow of business at a busy Las Vegas pawnshop — and has gone a long way to remove the image of seediness and desperation that has plagued the industry.
“We have become more popular because of ‘Pawn Stars,’” McCassie admits. “At first I thought it was kind of goofy, but it really promoted and pushed the pawn industry.”
Adds Burnbaugh: “Some people turn their nose down at pawnbrokers, but pawnshops have changed dramatically.”
Drobkin says pawnbrokers throughout the U.S. are enjoying a rise in business from the exposure the show has brought the industry.
“It gives people an idea of what they can pawn or sell and where to go to borrow money,” she says.
ALL CONTENTS © 2010 Northern Nevada Business Weekly. ALL RIGHTS RESERVED.
Tags: consumer credit, Las Vegas, Pawn Loans, pawnbroker, pawnshop, Payday Loans
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Saturday, March 27th, 2010
From LVJR Dot Com
Mar. 26, 2010
Copyright © Las Vegas Review-Journal
NORM: ‘Pawn Stars’ brings bookworm fame
Rick Harrison of the hit reality show “Pawn Stars” can’t go anywhere without getting the celebrity treatment.
Still a bit uncomfortable with his newfound stardom, Harrison walked into the DMV office on Decatur on Thursday hiding behind some Ray-Ban shades.
His disguise didn’t work. His bald head gave him away.
“If you didn’t want to be recognized,” one fan told him, “you should have worn a wig.”
Another person ribbed the pawnbroker with: “You want $1,000? I’ll give you $100.”
A lady in the DMV line saw the hubbub and was convinced Bruce Willis was in the building.
That’s funny, Harrison said when I reached him by telephone. “When I was at Terry Fator’s show, this guy came up to me and said, ‘How’s it going? Remember when we did that charity event five years ago?’”
When the brief conversation ended, the man told Harrison, “Nice talking to you, Bruce.”
All this fame from 40-some episodes has Harrison, 45, shaking his head in disbelief. “I’ve been a bookworm my whole life. Just worked hard. Never thought anything like this would happen,” he said.
“A friend of mine in junior high called,” said Harrison, who grew up in San Diego before moving to Las Vegas in 1981. “Cousins who I didn’t know existed.”
Business at the family-run Gold and Silver Pawn at 713 S. Las Vegas Blvd. has been booming so much that a $400,000 expansion is in the works to double the size of the showroom. It’s costing a lot because his two structures are among the oldest on the Strip, he said. They were built in 1935, the year before Hoover Dam was completed. Las Vegas had all of 8,500 residents.
How popular is the show? This month, it drew a record 5.3 rating on the History Channel and 5.8 a week later.
Harrison said Jessica Simpson chalked up terrible ratings for her VHI reality show, “The Price of Beauty,” to going head-to-head with “Pawn Stars.”
Norm Clarke can be reached at (702) 383-0244 or norm@reviewjournal.com. Find additional sightings and more online at www.normclarke.com.
Tags: consumer credit, Las Vegas, Pawn Loans, Pawn Stars, pawnbroker, pawnshop
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