Posts Tagged ‘Pawn Loans’
Wednesday, September 21st, 2011
From RGJ Dot Com
Dayton Valley Pawn
If you’d enjoy meeting a man who really
loves his work -drop by Dayton Valley
Pawn and say hello owner, Gary Barwig.
Barwig says, “It’s like Christmas every day
for me. I never know what’s going to come
through that door!’
While living in Southern California, he
owned several second-hand stores. But,
this is the first time he has owned a
pawnshop and is able to offer loans to his
customers.
Dayton Valley Pawn first opened in the
Occidental Square in Dayton three and a
half years ago, but when a great location
was available for lease on highway 50
across from Terrible’s casino he jumped at
the chance to relocate his shop last year.
Dayton Valley Pawn has a wide selection of
new and used firearms, specializes in
buying and selling gold and silver jewelry
and has a large inventory of other items for
sale.
One of the perks for the pawnshop’s
customers is the ability to shop on-line at
http://DVPawn.com -just scroll down to the
Ebay site, click on it and Dayton Valley
Pawn’s store appears. Barwig’s wife, Liz,
runs the on-line aspect of the business.
Barwig was in law enforcement for many
years, but when he realized how fast his
pawn business was growing, he soon put in
for retirement. He said, “Looking into the
future when I reached the age of 60, I
knew I definitely didn’t want to still be
working for someone else. Now I’m my own
boss and enjoying every minute of every
day I’m in the shop!”
Dayton Valley Pawn gives back to the
community by helping many of the area’s
schools with fund-raisers as well as
purchasing ads in Silver Springs and Dayton
school yearbooks. They also offer
sponsorships to Little League teams.
“I like dealing with people on an every day
basis. There is always someone who needs
money and needs to sell, and someone
who has money and wants to buy,” Barwig
said.
Bonnie Matton covers businesses in west-
central Lyon County that cater to locals and
those who pass through our rural
communities. Questions or ideas? e-mail
editor@daytoncourier.com.
Tags: consumer credit, Dayton Nevada, Pawn Loans, pawnbroker, pawnshop
Posted in Pawn Shop Stories | No Comments »
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
Posted in Pawn Shop Stories | No Comments »
Friday, August 26th, 2011
From Business News Daily Dot Com
By BusinessNewsDaily Staff
With almost 30 percent of Americans possessing no checking accounts or credit resources, pawn shops like the Columbus, Ga.-based Money Mizer Pawns & Jewelers are increasingly becoming a primary resource for small loans. That, combined with the rising price of gold and silver, has made pawn shops as popular today as they’ve ever been.
Money Mizer’s CEO Robbie Whitten has learned a thing or two about dealing with customers in his 30 years in the pawn business. He shares a few of those tips with BusinessNewsDaily readers.
Lesson 1 – Never assume by the way a customer is dressed that he doesn’t have any money. I had a guy come in dressed in overalls, shot-out shoes, hair messed up and smelling like he hadn’t had a bath in three days. He was looking at jewelry and no one wanted to wait on him, so I approached the customer and treated him respectfully, and he purchased a diamond ring for $8,500 and paid in cash.
Lesson 2 – Never take a credit card over the phone from someone you don’t know. I sold a Rolex Submariner on eBay back in the early days of eBay and before PayPal. I took a credit card over the phone. The card went through perfectly so I shipped the Rolex. A few days later I received a call from the credit card company ? come to find out the card was stolen. I ended up with no money and no Rolex.
Lesson 3 – Move inventory around in the store, kind of like grocery stores do. It keeps repeat customers from seeing the same old stuff sitting in the same spot time and time again. Also, if you have some inventory sitting for a while and not selling, mark it down and move it – even if you have to take a loss occasionally. As they always say, time is money.
Lesson 4 – Always treat customers kindly and greet them when they come into your store. Be attentive to their needs (talk to them, for god’s sake), be happy and smile. Why do you think Walmart has greeters at the front doors?
Lesson 5 – Be very careful extending credit to a friend or family member without collateral. I learned this lesson years ago when I extended credit on a purchase to a good high school buddy of mine. He never paid a dime and I haven’t seen or heard from him in over 30 years.
Lesson 6 – Your best advertising is word of mouth. We spend approximately $100,000 a year on advertising and it is very effective. However, your customer’s word of mouth is the best advertising in the world. Keep your customers happy and remember the old saying: A happy customer will tell a friend about your business; an unhappy customer will tell 10 friends about your business.
Lesson 7 – Even though we’re in business to make a profit, be charitable on occasion to customers that are truly desperate. Use your judgment, but when a customer asks for a deal or needs a break, show some compassion.
Lesson 8 – Stay ahead of the game in your industry and always be one step ahead of your competition. Be the one that tries new strategies, new advertising campaigns, keep up with new technologies like social media (Facebook, Twitter, LinkedIn, etc.). These are simple things that could turn into profits and new customers.
Lesson 9 – Learn something new every day. Never think to yourself for one minute you know it all. Not a day goes by – even after 31 years in the pawn business – that I don’t look to others in the industry for new ideas, methods, and information to learn something new and make more profits. I’m not bragging, but you can bet your bottom dollar that my pawn shops make 2-3 times more in profits than competition in my markets.
Money Mizer currently has three corporate-owned locations, in Columbus, Ga., and Phenix City and Dothan, Ala., as well as one franchised location in Auburn, Ala. After launching its franchise program in 2008, the chain expects to sell 10 to 15 franchises in 2011, with 150 locations open by the end of 2015.
Tags: consumer credit, Money Mizer Pawns & Jewelers, Pawn Loans, pawnbroker, pawnshop, Robbie Whitten
Posted in Pawn Ecomomics | 1 Comment »
Monday, August 8th, 2011
From News Times Dot Com
John Pirro, Staff Writer
DANBURY– During his 10 years as a Waterbury police officer, Doug Mineo spent a fair amount of time in pawn shops and realized that business “fills a niche in society,” providing small, short-term loans that help people through tough times.
So when a bum knee forced the 50-year-old Plymouth resident into retirement a few years ago, opening a pawn shop seemed like a good idea.
“When somebody needs $50 to get them through the week, they can’t go to the bank for a loan,” said Mineo, who owns Hat City Pawn on Federal Road.
But they may have something of value — a laptop, tools, a camera or video games — that can serve as collateral so they can borrow a few bucks until their situation improves, he said.
“I had a vision of a shop based on honesty and integrity. If you’re going to do business in a community, you build it by doing the right thing,” Mineo said.
Pawn shops may be considered seedy and disreputable by some, he said, but in the year he has been in business he has collected a stack of letters from customers praising him for living up to his values.
One satisfied customer is Lenny Engelman, of Danbury, who a few months ago walked into Hat City Pawn with some of his wife’s old gold jewelry and a two large, silver-colored coins inherited from his father-in-law.
Mineo said he was concentrating mainly on the gold and only gave the coins a quick glance.
“I thought they were Eagles,” he said, referring to the one-ounce, silver bullion coins issued by the U.S. government. He paid Engelman $20 apiece for them.
“He called me back the next day,” Engelman said, “and he told me it was worth a couple of bucks more, so he asked me to come by the shop the next day so he could settle up.”
Assuming that the difference was only a few dollars, Engelman didn’t return immediately, so Mineo called him again the following day.
This time when Engelman went to the shop, he was surprised that Mineo counted out 10 $100 bills and placed them in his hand.
“He said, `I didn’t realize the coin was platinum,’” Engelman said. “He could have sold it for $1,200, and I would be none the wiser. But in this day and age, it was nice to meet someone who did the right thing.”
Other letters — with copies sent to the Police Department, which monitors the operations of all the pawn shops in the city — describe how Mineo helped the writers recover items that had gone missing from their homes.
In one, a Brookfield man recounts how Mineo returned two expensive guitars that had been taken in a burglary.
The man visited area pawn shops after discovering the theft and provided the staff with descriptions of a Les Paul guitar with a broken toggle switch and a brand-new red Fender bass.
So Mineo was prepared when two teenagers walked into his shop and tried to sell the instruments.
After opening the first case and finding the Les Paul, Mineo placed it behind the counter and waited as one of the teens placed the second case in front of him, unopened.
“I said, `This must be the red Fender bass.’ You should have seen their faces,” he laughed.
Mineo kicked them out of the store with a stern lecture, and they were later arrested by police. But the bottom line, he said, was the guitars ended up with their rightful owner.
Contact John Pirro
at jpirro@newstimes.com or 203-731-3342.
Tags: consumer credit, Pawn Loans, pawnbroker, pawnshop
Posted in Pawn Shop Stories | No Comments »
Thursday, July 14th, 2011
From TBN Weekly Dot Com
Article published on Wednesday, July 13, 2011
CLEARWATER – Big Tim’s Pawn recently opened its second retail store, located at 1690 Clearwater Largo Road.
Big Tim’s Pawn Clearwater is a 5,000-square-foot store serving residents of Clearwater, Largo and Belleair and adjacent communities six days a week, providing cash loans and retail deals with superior service.
“Opening a Clearwater store is a huge goal for me being a local guy,” said Tim Russell, president and CEO of Big Tim’s Pawn, in a press release. “I graduated from Largo High in ’85 and never could get away from the area I loved.”
According to Russell, his first store opened in 2009 in Pinellas Park. His customers were looking for a more northern county location.
The staff at Big Tim’s Pawn Clearwater has more than 20 years of pawnshop experience.
Big Tim’s Pawn is committed to improving the Pinellas County community by sponsoring local police and high school events like the Pinellas County Sheriff’s Athletic Program and the Northeast High Cross Country program.
Copyright © Tampa Bay Newspapers: All rights reserved.
Tags: Big Tim's Pawn, Clearwater FL, consumer credit, Pawn Loans, pawnbroker, pawnshop
Posted in Pawn Shop Stories | No Comments »
Tuesday, July 12th, 2011
From Go Banking Rates Dot Com
Are Pawn Shop Owners the True U.S. Economists?
By Casey Bond
Just about every industry took a hit from the recent recession and most businesses are still struggling to rebound. That is, except for pawn shops. Interestingly enough, they have actually been on the upswing ever since our economy took a turn for the worse. In both the good times and the bad, however, pawn shop owners are down in the trenches with their customers–typical Americans like you and I–which may give them the most authentic and uncensored look into the true state of our economy.
So if you’re wondering whether the U.S. is really on its way toward economic recovery or if we’re doomed to keep our belts tightened for years to come, you might want to visit your local pawn shop to get the real answer.
How Pawn Shops Work
Once viewed as a seedy location to unload stolen goods and hock valuables for gambling money, pawn shops have been cleaning up their image and becoming the go-to among middle- and even upper-class Americans for discounted goods and small loans.
Their new found popularity has even sparked a wave of reality shows, including the History Channel’s Pawn Stars, in which viewers can watch the shop’s employees haggle over everything from Superbowl rings to buried treasure. But a pawn store can provide much more than mindless entertainment and there’s plenty these establishments have to offer the everyday consumer, too.
Here’s how a pawn shop operates: Let’s say you need a loan, but don’t have the credit or bank account necessary to get one (or you simply want an alternative). You can take a valuable item you own to a pawn shop and offer it up as collateral. The pawnbroker will then lend you however much he or she deems that item to be worth. You both agree on a term–usually, 30 days–after which you come back to repay the money, plus interest, and have the item returned to you.
Now what if you can’t pay back your loan? The pawn broker can put your valuable item up for sale in their shop with the goal of selling it to recoup the money they loaned you (and hopefully make a profit). You don’t get reported to the credit bureaus or end up with bill collectors on your tail, you just give up the item you pawned.
You can also sell items to a pawn shop if you’re interested in straight cash rather than a loan. These days, a lot more people are interested in both.
Living in a “Pawn Shop Economy”
While there are more than 13,000 pawn shops throughout the country, they are mostly small, privately-owned businesses that do not report their earnings publicly. That makes this industry extremely difficult to track. Even so, the three publicly-traded pawn companies have recently reported significantly increased earnings.
For an industry that thrives on making short-term loans and selling goods at a discount, it’s a strong indicator of the financial times in which we live.
However, it isn’t just an increase in profits that has contributed to the idea pawn shops serve as an economic barometer. Pawn shop employees get a first-hand look at current trends in consumer borrowing and spending, as well as various industry ups and downs.
“We went through two solid years where we had an increase in loans. And I could see the construction business grinding to halt by all the tools on my sales floor,” explains Westside Pawn manager, Susan Sherrod.
A more affluent crowd has been coming through pawn shop doors to join the usual suspects these days, too, hoping to pawn and sell nicer stuff. As Pat Schneider writes for The Cap Times, “unlike payday loan stores, which have the feel of banking branches, a pawn shop’s eclectic mix of items and their owners offers a dramatic window into life during the economic downturn.”
Pawn Shops Serve as Alternative to High-Interest Payday Loans
Payday loans have become much more popularized as a result of the recession, which left a huge number of people with reduced or no income, increasing the demand for short-term loans. Unfortunately, it also left these same people with damaged credit. Combined with tightened lending standards, it has become harder than ever to obtain a loan.
So it’s pawn shops that have come through to serve the needs of the unemployed, unbanked and otherwise down and out.
Additionally, pawn customers can enjoy the fact that there isn’t any credit check involved in getting a loan, and if the loan can’t be repaid, there are no long-term repercussions. Not to mention, it’s hard to obtain a loan for $60.
So whether you’ve hit hard times and need some cash or are simply interested in the fate of the U.S. economy, you may find that what you’re looking for isn’t at a big bank, but the local pawn shop.
Casey Bond has a long professional history in the finance industry. She worked as an assistant in a successful financial planning firm for many years while obtaining her B.A. in English. She then went on to obtain a degree in Publishing and was eager to change career paths.
That’s when Casey joined the Go Banking Rates team, ready to meld her interest in finance with her passion for writing. Now she strives daily to bring readers the most compelling and topical banking information while battling a personal addiction to shoes and handbags. She is making progress and takes it one day at a time.
Tags: consumer credit, Economic Indicator, Pawn Loans, Pawn Stars, pawnbroker, pawnshop
Posted in Pawn Ecomomics | No Comments »
Tuesday, July 5th, 2011
From FW Daily News Dot Com
By Dennis Nartker
KENDALLVILLE — With the proliferation of reality TV shows like the History Channel’s “Pawn Stars,” pawn shops owners are seeing an increase in customer interest.
When there’s an economic downtown and people out of work, pawn shops are also busy.
“Our business has been steady, but tax time and Christmas are the busiest times of the year,” commented Kendallville Pawn Shop manager Ken Gohn. The shop at 211 N. Main St. has been open for about 10 years. “People need money to live on and they have items they want to pawn but not sell.”
Holly Boyd, owner of Money Source, Inc., a pawn shop at 635 N. Wayne St. in Angola, said she’s seen an increase in people coming into her shop to see what items are for sale as a result of the popularity of the TV show.
How it works
Pawn shops operate much like the Harrison family’s Gold and Silver Pawn Shop in Las Vegas featured on “Pawn Stars.” Pawnbrokers offer secured loans to customers with personal property used as collateral. Pawnbrokers make their money from the interest they charge for the loans every 30 days. If the customer doesn’t return to claim a pawned item within 90 days, then it becomes the pawnbroker’s to sell. “We much prefer people come back and pick up their stuff,” said Boyd. “We have to fix it, if it needs fixing, and market it and display it to sell it.”
Entering the Kendallville Pawn Shop is like entering any retail store with various items arranged on shelves and in display cabinets. Most of the items for sale are used and either pawned by customers who failed to return for them in the specified time period or sold them to the pawn shop.
“Our most popular items pawned are jewelry, electronics, video games, power tools, musical instruments, sports equipment,” said Gohn. Boyd said she doesn’t loan money on “junk,” but she will consider a pawn on just about anything.
Pawnbrokers will also purchase items. If it’s used, the Kendallville Pawn Shop takes 40 percent off the top because its used, said Gohn.
Boyd’s shop is located in a former McDonald’s Restaurant building that has big windows and a display area that was the restaurant’s play area for kids. “We have a lot of stuff for sale,” she said.
Pawnbrokers assess an item for its condition and saleability by testing the item and examining it for flaws, scratches or damage. An electrical item is more saleability if it works. A customer may offer an item to pawn that is difficult to sell, and the pawnbroker will probably turn it down or offer a very low price. A surfboard is not easy to sell in Kendallville, for example.
They must also consider supply and demand for an item’s saleability. He may have too many car stereos and the market is saturated so he will only accept higher quality stereos.
Gohn and Boyd must also factor in his overhead costs such as staff costs, insurance, utilities. They must take into account all the risk factors and costs. If the customer fails to return for a pawned item, the pawnbroker must sell it and make a profit. If a customer brings a 42-inch TV set he purchased new for $1,000 to a pawnbroker, he may only get a $100 or $200 loan.
Gohn admitted he must be knowledgeable about the markets for the items he accepts, and make use of catalogues, guidebooks and the Internet sometimes when assessing value. He must also be a “people person” so he can determine the likelihood a customer will pay the interest and return to reclaim the item. “I’ve got one lady who’s probably pawned hundreds of items. She’s always come back to collect her items,” he said.
By Indiana law pawnbrokers must keep records of their customers and transactions. Pawnbrokers must be licensed and must keep sales records for two years which include the bill of sale, description of item and the seller. “We’re audited by the state,” said Gohn.
The Kendallville Pawn Shop requires a signature, right thumb print and photo of its customers. This helps in cases of stolen items. Pawnbrokers assume the risk of accepting stolen items so records of customers and transactions are essential. This will allow police to track down stolen items and help identify suspects.
Gohn related the time an 18-year-old boy came into the shop with two fishing poles and reels worth $250 each. Gohn bought the items, and the next day the same boy came into the shop with four more high quality rods and reels. “I remembered reading in the paper about $2,000 worth of fishing equipment stolen in a burglary and I called the police,” said Gohn. Police used the shop’s records to locate the suspect. The fishing gear was returned to the owner, and the shop got its money back from the court-ordered restitution.
When asked about usual items people have pawned, Gohn said his shop has accepted motorcycles, four-wheelers, automobiles even a motorhome.“I had one guy come in with 20 pounds of dog food he wanted me to buy,” Gohn laughed.
Boyd has a license to buy and sell guns. Shotguns and rifles can be pawned but not handguns. “I can tell when it’s hunting season because customers with shotguns and rifles on pawn come in to get them,” she said. “I had 20 bows on pawn, and when bow hunting season came around, all the customers came and got them.”
Tags: Angola IN, consumer credit, Kendallville IN, Pawn Loans, pawnbroker, pawnshop
Posted in Pawn Shop Stories | No Comments »
Thursday, June 23rd, 2011
From Triangle Dot Dbusinessnews Dot Com
Bob Moulton named 2011 National Pawnbroker of the Year by the National Pawnbrokers Association…
Bob Moulton, owner of National Pawn, was named the 2011 National Pawnbroker of the Year by the National Pawnbrokers Association (NPA) on June 15, 2011 during the organization’s annual convention. Moulton’s clean, bright business model and his generous contributions to the community were cited in the presentation of the honor. Last year the title holder was Rick Harrison, of “Pawn Stars,” fame.
“I am proud to be a pawnbroker, and I am very proud to receive this recognition from the national association of my peers,” said Moulton. “I have made it a priority to improve the image of the pawn industry one customer at a time.”
“Bob Moulton is a fine example of a modern, professional businessman in an industry that suffers from an outdated image. Bob has built a fine reputation on providing service and values to his customers, and is a leading innovator in the nation for changing the face of the pawn business” said Dave Crume, President of the National Pawnbrokers Association. ”We are proud to have him as a member, and we are very pleased to award him the much deserved honor of the 2011 Pawnbroker of the Year.”
In addition to operating eight National Pawn stores in Raleigh, Durham and Wilmington, Moulton believes in giving back to the communities where he does business. He gives generously, and funds many philanthropic efforts from providing cash donations and electronic entertainment devices to Duke Children’s Hospital, to endowing annual scholarships for Triangle students and providing musical instruments to area middle school band programs.
About National Pawn
National Pawn (www.PawnDeals.com) has been serving customers since 1987. With eight stores throughout the Triangle and Wilmington, National Pawn is an industry leader. The company has grown thanks to the tens of thousands of satisfied customers. The professionals at National Pawn pride themselves on offering exemplary customer service.
Tags: Bob Moulton, National Pawn, National Pawnbrokers Association, Pawn Loans, pawnbroker, pawnshop
Posted in Pawn Shop Stories | No Comments »
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
Posted in Pawn Ecomomics | No Comments »
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