Posts Tagged ‘pawnshop’
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
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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
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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, June 10th, 2011
From Wallet Pop Dot Com
Groupon Founders Get Into Online Pawn Shop Biz
By Barbara Thau
The founders of the nation’s biggest daily deal, group-buying site are getting into the pawn shop business.
Groupon founders Eric Lefkofsky and Brad Keywell, who now run investment firm Lightbank, have partnered with online pawnbroker Internet Pawn to launch Pawngo, an online pawn shop.
The site aims to redefine the old fashioned brick-and-mortar pawn shop in the online space by offering customers “a more practical and affordable option to credit card loans and payday lending to get cash quickly without going into debt,” the company announced in a statement.
Pawngo customers can use the gold, jewelry, watches and valuables they own as collateral to secure a short-term loan. Similar to a traditional pawn shop, customers are also offered the option to sell their valuables for a slightly larger amount without interest payments.
“Financing from Pawngo can help fill gaps in cash flow, [helping consumers] pay for emergency purchases like major auto or home repairs or braces for a child,” Lightbank said in the statement. “Once you’ve paid back the loan, your items are shipped directly back to you quickly and safely.”
Here’s where Pawngo differs from traditional pawn shops: The site offers loans based on an item’s current market value for up to six months at 3% to 6% monthly interest rates — a better deal than brick-and-mortar pawn shops, which can charge as much as 20% interest per month, Lightbank added.
What’s more, Pawngo customers can nab a loan ranging from $250 to up to $100,000 in 24 hours — no matter the state of their current finances or their credit history, the company said. And because the transaction is done online, the pawn shop process is discreet and private.
Indeed, Pawngo appears to have set out to rehabilitate the pawn shop’s sordid image for the online space. The Pawngo system “eliminates the intimidating feeling walking into a brick-and-mortar pawn shop in a seedy part of town,” the company noted in its statement.
Here’s how the site, which has yet to officially launch, works:
Customers go on to Pawngo.com and enter a description of the item or items, send a digital photo of the piece — if available — and enter their contact information. No credit card information or Social Security number is required. Pawngo will send the customer a preliminary loan offer or buy estimate within a few hours.
If the customer accepts the offer, Pawngo users can print an overnight, pre-paid FedEx shipping label to send the item directly to Pawngo’s evaluation lab. Once the item has been received, a Pawngo representative will contact the customer with an exact item evaluation and an offer. If the customer accepts the offer, their item is kept in Pawngo’s vault, and the site wires the customer money to their bank account.
The launch of Pawngo is clearly a sign of the times, Craig Johnson, chairman and CEO of retail consultancy Customer Growth Partners, told WalletPop. The economic downturn, Johnson says, has put that many more people into the “low income or temporarily low income” category, people who could find that this new service is just what they need to get them past the rough spots.
Tags: consumer credit, Groupon, Internet Pawn, Pawn Loans, pawnbroker, Pawngo, pawnshop
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Monday, June 6th, 2011
From NY Times Dot Com
A Real Economic Meltdown
By ROBIN ROMM
Portland, Ore.
JOSH OLLER sits me down in the conference room of Silver Lining, a pawn shop in northeastern Portland. It’s a Monday and only 10 a.m., but already three lines are forming at the loan windows. At the front, a woman in a colorful windbreaker and hot pink pants leans on her elbows on the counter. A man in a long black trench coat waits patiently behind her with a guitar.
Mr. Oller runs Silver Lining with his father, Earl. While we talk, a painting of Earl, made to look like Elvis, watches us from its black velvet canvas. The son has a sedate manner, his calm blue eyes set off by a faded navy polo shirt.
He didn’t think he’d go into pawning. He aspired to a career in federal law enforcement. But after he graduated from college, a longing to remain in Oregon, near family and forests, made him reconsider. “It’s a good business,” he says. “Every day is different. You never know what’s going to come through the door.”
The economic downturn has, according to Mr. Oller, brought more middle-class customers to the loan windows. But the real change in pawning has to do with the skyrocketing price of gold. With gold at $1,500 an ounce, pawnshops are making easy profits by buying gold jewelry and selling it to refineries. For sellers, those gold cufflinks languishing in a jewelry box might now cover several weeks’ worth of groceries.
Even gold dust has become worth pursuing. Inspired by stories he’d heard of people boiling the carpets in old jewelry manufacturing buildings to recover remnants of precious metals, Mr. Oller installed a special sewage filtration system in his shop. Now, after employees work with jewelry, they can wash their hands — those tricky crevasses in the knuckles and under their nails — without throwing money, literally, down the drain. Silver Lining’s sewage sludge is collected, dried, baked and burned. “It’s gross,” he admits. But from hand-washing water, he said, the shop collected about $1,000 last year.
Mr. Oller takes me on a tour of the store, including its maze of storage rooms filled with the traditional pawn loot: electronics and guns. But I have a passion for old junk and we both perk up in a low-ceilinged room holding objects that defy categorization.
“What’s that?” I ask, pointing to a small turquoise trunk. It holds a ventriloquist’s dummy. I desperately want to look at it, but Mr. Oller has moved on to a 100-year-old bottle of Kentucky whiskey. “How much did you loan for that?” I ask.
“Probably 50 bucks,” he says. And then there are the items for which it’s nearly impossible to name a price, like the miniature but functional cannon made out of brass.
When we finish the tour, I find myself drawn to the jewelry cases. It’s hard not to imagine the sad stories behind the diamond rings sitting there — love soured, jobs lost. But I steel myself to see if there’s any gold vintage jewelry, the kind I wear and love. The absence of this — of any gold jewelry — is notable.
Most days I wear a gold Victorian lion pendant that my boyfriend got for me when I sold my first book. I’d long admired it in the window of an estate jewelry store in Berkeley, Calif., where I was living at the time. The impeccably made lion holds a little diamond shard in his fierce mouth. His eyes shine with ruby beads. His whiskers grow from tiny specks beneath his perfectly carved nostrils. I love to think about where he came from, and whom he will belong to after I’m gone. I hate to think — in fact, can’t bring myself to think — of his horrible end if I pawned him. Straight to the scrapper, he’d go.
When I say the fate of all the gold jewelry seems sad, Mr. Oller shrugs. “Gold’s just a commodity, like grain,” he says.
From a pawnbroker’s perspective, this outlook makes sense. Regular customers can no longer afford gold jewelry, and so pawnbrokers stand to make more selling it all to refineries. But I think of my grandmother’s filigreed earrings and my lion pendant, both antique pieces made with great care, now part of my own history. I imagine these objects melted into bars and sold on the open market — to China, to Russia. It’s unsettling.
For a while I wonder whether I can set up a little booth in front of the pawnshop and convince people to sell their antique jewelry to me instead, to save it from its fiery end. But this would probably be illegal, financially suspect … maybe even insane. I settle on hoping that some people, despite this extended recession, can afford to keep their heirloom earrings and cufflinks, medallions and lockets — those little pieces of our human history, sentimental and unrefined.
Robin Romm is the author of “The Mercy Papers: A Memoir of Three Weeks.”
Tags: consumer credit, Gold Prices, Pawn Loans, pawnbroker, pawnshop, Portland OR, Robin Romm, Silver Lining Pawn
Posted in Pawn Shop Stories | 1 Comment »
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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Tuesday, May 10th, 2011
From Smart Money Dot Com
With more middle-class borrowers looking for cash, pawnbrokers are cleaning up their image.
By ANNE KADET
When Jim De Lisa’s chain of six furniture stores went belly-up midrecession, the New Jersey father of five found himself in a fix. He was suddenly unemployed and broke, and his credit score, he says, was “in the crapper.” Pushed to the edge by looming house and car payments, he did the unthinkable: He pawned his wife’s $18,000 engagement ring. But no one ever saw him visit the pawnshop De Lisa hocked the 1.7-karat stunner over the Internet.
Is no industry immune to the inexorable forces of technology and gentrification? These days, even the pawn business is going upscale. Pawn merchants say the recessionary credit crunch is bringing in more middle-class clients along with small businesses seeking short-term loans to meet payroll. Jordan Tabach-Bank, CEO of Beverly Loan Co. in Beverly Hills (“Pawnshop to the Stars”), says he’s seen a flood of doctors, lawyers and accountants hocking valuables to keep their kids in private school. There’s a pawn store reality show airing on the History Channel and an iPhone app to help high-tech indigents locate the nearest pawnbroker. If the trend continues, hocking the family jewels may become as mainstream as applying for a credit card.
While pawnshops still charge eye-popping interest rates (up to 25 percent in some states), the once shady industry is rapidly going Disney. Pawn consultant Steve Krupnik says the sector’s three publicly traded chains took cues from traditional retailers, deploying clean-cut employees, suburban locations and efficient technology. “They’ve forced the marginal operators to clean up,” he adds.
Some of the nation’s 13,000 pawnshops lure the (formerly) affluent with private appointments and house visits. In New York, EZ Pawn, an eight-store chain, is placing ads in local magazines. Pawn magnate Craig McCall, whose 13 Oregon and Arizona locations are in traditional shopping centers (two are in former Hollywood Video stores), decorates some shops with wainscoting and leather chairs at the loan desk: “There’s no bars anywhere!” He even tried dressing his associates in shirts and ties, but they got too grubby lugging pawned lawn mowers and power tools. He settled for red polo shirts and khakis.
Perhaps the most intriguing new model is Jim De Lisa’s lender: Pawngo.com, an online pawnbroker backed by $3.8 million in venture capital. Clients get an online estimate, FedEx their valuables to the company’s Centennial, Colo., office park vault (Pawngo pays the shipping and insurance), and get a loan wired to their bank account within 24 hours. CEO Todd Hills says most of his clients wouldn’t dream of frequenting a pawnshop they’re hocking Cartier watches, Louis Vuitton bags, even a Picasso. His typical loan runs about $1,700, 17 times the $100 pawn-industry average.
The upside: Like all pawn loans, Pawngo transactions are never reported to the credit bureaus. If you default, all you’ve got to lose is your dearly departed mother’s wedding ring. But the price for discretion is stiff; Pawngo’s annual percentage rates range from 48 to 84 percent, depending on loan size. De Lisa says he paid more than $4,000 in interest on his 15-month loan worth less than $8,000. At least he’s getting the ring back in time for his sixth wedding anniversary. And the experience has him considering new options: “I should open my own pawnshop!”
Tags: Beverly Loan Co, consumer credit, Pawn Loans, pawnbroker, Pawngo.com, pawnshop, Smart Money
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Monday, May 9th, 2011
From Hampton Roads Dot Com
By Joanne Kimberlin
The Virginian-Pilot
© May 8, 2011
When word came last week that Osama bin Laden was dead, a crowd gathered at Lynnhaven Pawn Shop.
Why? Gold prices spiked briefly after the world’s most-wanted terrorist was killed.
Propelled by economic uncertainty, the precious metal shot up $50 an ounce, prompting folks who keep an eye on such things to scour their jewelry and deposit boxes.
“When I saw the news on TV Monday morning, I knew we’d be busy,” said Nathan Segal, who opened Lynnhaven Pawn nearly 30 years ago. “When I got to work, people were lined up outside ready to sell.”
Pawn shops find themselves at the intersection of a surprising range of events. The bin Laden rush, which lasted until gold prices fell that afternoon, had global fuel. Other runs are the product of much more personal concerns.
Consider the calendar. Easter. Thanksgiving. Christmas. Or even today, Mother’s Day. Segal can track them all with a look inside his vaults.
“We’re at our emptiest just before holidays,” he said. “People come in and pay the loan on Grandma’s china because family is coming to dinner and they don’t want to be embarrassed. Then the next week, they bring it all back.”
Fact is, the business isn’t nearly as wild as it looks on TV, where shows like “Pawn Stars” – the History Channel’s hit series – portray a stream of colorful characters and rare finds.
In real life?
Not so much.
The majority of people who walk in Segal’s door just want to borrow a few bucks on collateral that tilts toward the mundane – a necklace, a bag of golf clubs, a set of silver flatware.
“The real business isn’t something you’d want to watch on TV,” he said.
That doesn’t mean there’s nothing of interest. Segal poked through a tray of jewelry, coins and other keepsakes people had recently brought in to sell.
“Everything here has a story,” he said.
Take the solid gold police badge from New York City, engraved “From your friends – 1970.” Or the massive rings that marked an athlete’s glory days – a Tar Heels bowl game, an Admirals’ championship. Or the small gold band inscribed for an even more momentous occasion: “To love, cherish and obey.”
“Apparently, not anymore,” Segal said with a shrug and a grin.
Divorce. Death. Unemployment. Moving on. Pawn shops are a witness to life’s crossroads, and a barometer of the times.
For example, Segal has noticed a boom in customers who can only speak Spanish, evidence of more immigrants in Hampton Roads. He can gauge the job market by the amount of flat screens, power tools, laptops and guitars awaiting redemption in his storage rooms. He can assess the economy by the number of loans he’s floating – currently around 6,000, which is fewer than two years ago when times were really tight.
And, every now and then, someone does show up with a curiosity that could make the cut on “Pawn Stars.”
Segal reached deep into one of his many safes to retrieve a mysterious lump. Fifteen years ago, it served as collateral for $600 borrowed. Segal says 90 percent of his customers repay their loans, but those who don’t – like the lump’s owner – forfeit their merchandise.
Most items are resold in the shop, but not the lump. Segal peeled back its wrappings to expose the grayish ridges of a giant tooth – a fossil from a woolly mammoth that lived tens, perhaps hundreds, of thousands of years ago.
“Things like this,” he said, “I just have to keep for myself.”
Segal comes from a line of pawnbrokers, the family behind Littman’s, operating in downtown Norfolk since 1892. And while it’s not well known, America owes a lot to this ancient profession. Legend says Queen Isabella of Spain hocked her jewels to bankroll the explorations of Christopher Columbus. As late as the 1950s, pawning was America’s most common form of consumer credit.
But what was once a reputable industry slid into seediness over the past few decades, rife with shady players and stolen goods.
Now, better oversight is helping to polish the trade’s image. Shows like Pawn Stars are dispelling its taboo, or at least fading it.
“I discovered this place about a year ago,” said Dawn, a customer in Segal’s shop who didn’t want her last name in this story. “Women used to never go inside a pawn shop.”
Dawn said Segal’s small showroom – clean and well-lit – made her feel more at ease. And besides, her family needs help.
“My husband is in the ministry and I’m in real estate,” she said. “With the economy the way it is, we’re living from bill to bill. We have our college rings here – for the second time.”
State law caps pawn shop interest at 5 percent per month, a rate that can add up, especially when combined with the 5 percent monthly storage fee commonly charged for holding collateral.
“This is intended to be a short-term loan,” Segal said.
It doesn’t always work out that way. Customers can keep a loan alive indefinitely as long as they pay the interest and storage fee. Pieces of jewelry have been left with Segal for 10 years. One loan has been out for 20.
“They’ve paid more than the jewelry is worth,” he said. “But they’re OK with it. They’re using us like a storage place.”
That security appeals to military members, who often pawn personal firearms before deployments. Others pawn because they can’t qualify for bank loans, or they don’t want family or friends to know they’re short on money, or they like the fact that only their collateral is at stake if they can’t pay back what they borrowed.
The average loan at Lynnhaven Pawn is only around $200, but Segal has handed over as much as $50,000. One of his largest loans was on a set of 1933 baseball cards featuring Babe Ruth and Ty Cobb. A leather belt from the Holocaust era rated a similar loan; 40 gold coins from Nazi Germany were sewn inside its secret compartment.
Segal turns to experts – often with the Chrysler Museum – to authenticate items like that.
“Everybody has Adolf Hitler’s dagger, bought off eBay,” he said. “They’re very disappointed to find out it’s not the real thing.”
Stolen goods are always a concern, one reason Virginia Beach, like many cities, restricts the number of pawn shops within its boundaries. Only 15 are allowed – a ceiling that’s always maxed out – and pawnbrokers need a license approved by a circuit court.
Transactions are logged into a computer and emailed daily to police, including a detailed description of the merchandise and the ID and Social Security number of the person who brought it in. Most police departments have a pawn unit that checks the log against a list of items reported missing in the area.
Nowadays, according to the National Pawnbrokers Association, less than 1 percent of pawned goods are identified as stolen.
“Real criminals know better than to come here,” said Segal, who makes it a practice to collect a photo and thumbprint from every seller as well.
When trouble does turn up at his place, it’s usually the domestic kind: Teens who filch from mom’s jewelry box; couples who split and try to sell each other’s stuff; battered spouses – women and men – desperate to raise some cash to get away.
“They come in with black eyes and busted lips,” he said. “We keep a list of shelters we refer them to.”
Unlike on TV, there isn’t much haggling. The final price doesn’t drift far from the initial offer.
“We have to make money, too,” said Willie Showell, Segal’s assistant manager, “and if something winds up sitting in the back for months, it can be worth even less when it comes out.”
Electronics become outdated particularly fast, one reason pawn shops are only interested in the latest gadgets. Solid loans are the ones made on collateral that grows more valuable with age.
Jewelry and firearms are stored inside separate vaults, watched over by an electronic field that triggers an alarm when disturbed. Segal figures he’s invested close to $50,000 in anti-theft systems. Walls are reinforced. Ceilings are wired. He says he’s the only pawn shop in the area outfitted with a system that sprays tear gas when it detects body heat or shifts in air movement or pressure.
A vibration detector guards valuables inside the “fragile vault” – a small storage room crammed with Lladro and Hummel figurines, silverware and candlesticks, autographed baseballs, antique decoys, ship models and swords, expensive artwork and Lionel trains. Someone borrowed against a platinum record awarded to the Molly Hatchet band. Another loan is secured by a law brief written and signed by Abraham Lincoln.
Discretion is part of the profession. Regular customers of Segal’s often look the other way when they see him in public.
“They don’t want to have to explain anything to their spouse,” he said. “I guess it’s sort of like being a priest. Everything is private.”
As for “Pawn Stars,” Segal has seen the show but rarely tunes in. Too much footage is devoted to the deal.
“It’s not really like that,” he said. “One customer just went through five or six tissues just trying to talk to us. You don’t see that on TV.”
Joanne Kimberlin, (757) 446-2338, joanne.kimberlin@pilotonline.com
Tags: consumer credit, Gold Prices, Hampton Roads, Lynnhaven Pawn Shop, Pawn Loans, pawnbroker, pawnshop
Posted in Pawn Shop Stories | 1 Comment »
Wednesday, April 27th, 2011
From Bnet Dot Com
By John Thedford, CEO, Family Financial Inc., Winter Park, Fla.
When I first launched a chain of pawn shops called La Familia Pawn in 2009, the local communities and banks we approached mistrusted us because of the industry had such a negative image. On top of that, we faced stiff competition: Three established, publicly owned companies collectively owned thousands of pawns shops across the nation. Here’s how I’ve managed to not only move past our industry’s bad reputation, but also outpace the competition.
Overcoming the image problem
Pawn shops have a bad reputation for predatory lending and dealing in stolen goods. A lot of people assume that pawn shops lend money to individuals whom they know can’t pay back the loan, so that they’ll be forced to forfeit the personal items that they’ve pawned as collateral.
I had previously owned a company that operated 70 pawn shops across the Southeastern United States, and I found that the industry’s bad image made it difficult to secure bank loans or lease properties. The truth is, the bad reputation is unfair: 80% of loans made by pawn shops are paid back, and less than 0.1% of all pawn shop transactions deal in stolen property. So when I launched Family Financial, I wanted to turn the negative stereotype on its head.
Looking the part
People tend to think of pawn shops as dirty hole-in-the-wall places with sketchy employees. In response, we do everything we can to keep our stores and employees looking as presentable as possible. An employee does a parking lot sweep and picks up trash outside the store every hour. We restripe our parking lot lines once a month and repaint the outside of our building once a year. Chipping paint and dirty parking lots bring to mind all the other nasty things people associate with pawn shops, and we want to rise above the stereotype.
We also have a dress code. Male employees must wear long sleeve shirts and ties. Female employees have more choices, but the key word for everyone is “professionalism.” When we interview candidates, we look for people who are not only hardworking team players, but also clean-cut and professionally dressed. In order to help ensure that our employees meet these requirements, we pay significantly above minimum wage. We’ve found the more you pay your employees, the more you can expect from them.
These are simple and cost-efficient steps but they’ve helped us earn the trust of the working and middle-class families that we serve.
Engaging with the community
The most effective way to win over suspicious communities is to get involved in them. Right now the CFO and I are volunteering to teach an eight-week session on how to be an entrepreneur at local middle schools. Every employee at my company — myself included — volunteers some weekends to read out loud to middle school students. We don’t force our employees to do it, but we do hire people who demonstrate a genuine desire to give back to the community. Sometimes customers will come into our store and say “Oh! You were reading to my kid last week in class.”
In the past, we have teamed up with the Orlando Business Journal to sponsor underprivileged youth in a program that pays for part of their college tuition. Next year we plan on donating $75,000 to the cause. These practices are good for the community, but they’re good for the business, too: Every time we win over a community it makes it easier to go to a bank and get a loan or convince the next community to allow us to lease the property for another store.
A new perception
Our measures have helped change people’s mind about the industry — or at least about our company. We no longer have trouble getting bank loans, and we now have 18 stores in Florida and Puerto Rico and project $25 million in annual revenue for 2011. I believe our strategy has been so effective because we aren’t pretending to be something we’re not: We’re simply taking steps to show people what kind of business we actually are.
John Thedford is the author of Smart Moves Management: Cultivating World Class People and Profits, Emerald Book Co., 2010.
–As told to Harper Willis
Tags: consumer credit, John Thedford, La Familia Pawn, Pawn Loans, pawnbroker, pawnshop
Posted in Pawn Ecomomics | No Comments »
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