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Customer profile Age: 36 Annual income: $29,000 Education: 82 percent have high school diploma or equivalent Employed: 80 percent Homeowners: 33 percent Characteristic: People without bank accounts. About 55 million people, or 28 percent of U.S. adults, have no bank accounts. Fate of items: 70 percent to 80 percent of pawned goods are redeemed How big is the industry? Membership: About 3,000 brokers in the national trade association Number of shops in U.S.: 12,000 to 14,000 Redeemed vs. sold: 70 percent to 80 percent of items are redeemed SOURCE: National Pawn Brokers Association Pawn guidelines If you need to pawn an item to pay a bill, what do you need to do? WiKiHow.com, an online resource, offers these guidelines: Decide how much money you need. By having a dollar amount in mind, it helps the pawnbroker get you the amount you need. Test and clean the item. Looking around the garage and picking up something that hasn't been used for years and is covered in dust or grease will make the pawnbroker's job more difficult. If it looks like you don't care about or value the item, the pawnbroker won't place much value on it. Call the pawnbroker to be sure it is an item the broker is interested in taking. Some pawnbrokers no longer take guns, VHS tapes, VCRs or car stereos. Make sure the item is complete. TVs without remote controls, tool sets missing pieces, video cameras without cords and chargers are less valuable than complete items. Have adequate identification. No reputable pawnbroker will accept an item without proper identification. Negotiate the price. Brokers must take in items cheaply so they can turn around and sell them at a bargain and still make money. The amount offered can be boosted a little, if the item is easy to resell. Saying to the pawnbroker, "I need to get as much as I can," is not helpful. It is better to say, "I need $44.53 to cover my utility bill." Keep your pawn ticket. Some pawnbrokers charge a fee for lost tickets. Mark the due date on the calendar. Pick your item up well before the due date. Don't wait until the last minute to redeem items you cherish. Things happen at the last minute that may cause you to lose your items. Traffic, job responsibilities, illness, transportation problems, any unforeseen difficulty may cause you to be late. The pawnbroker will sell items that are not redeemed on time. |
Andrea Blackmon had a drawer full of jewelry from a relationship gone bad.
It came in handy when she needed a few extra dollars.
"There's no question things are tight," Blackmon, 36, said, without elaborating on why she needed the money.
The Richmond resident gathered up the rings, necklaces, bracelets and earrings and took them to AmeriPawn on West Broad Street in Richmond.
She sold the lot for $253.
"You get all kinds of people in here with all sorts of stories," said Steven Carver, who manages the pawn shop.
A widow recently pawned jewelry to pay her mortgage one month, he said.
Pawnshops have long been a place where people could go if they needed quick money.
Carver said he's seen an increase in business as more people pawn items to make ends meet because of rising prices for gas, food and other essentials.
His customer base has changed as well, he said.
More middle-income customers are pawning items such as their children's video game systems, jewelry and golf clubs, Carver said.
Unlike consignment shops, which typically cater to higher-income customers, pawnshops traditionally serve people who don't have bank accounts or access to funds.
But pawnshop clientele seems to be changing, as people look for short-term fixes to cash shortages, shop owners say. About 32 pawnshops are within 50 miles of Richmond.
At a consignment shop, clients share proceeds with the store after items are sold, instead of being paid upfront or taking out loans as they do at pawnshops.
"For people [who get paid every other week] coming in and getting an extra $50 or $100 is the difference between having gas for the week or even eating," Carver said.
People can sell their items directly to a pawnshop. Or, they can get loans based on the broker's estimated value of items, which are held at the shop and used as collateral.
State laws allow pawnshops to charge a maximum 10 percent monthly interest rate based on the value of the pawn. Shops also charge a monthly fee for loans that vary by shop and item. Carver, for example, charges a $3 monthly fee.
Loans are for 30 days, though customers have a 15-day grace period and are allowed extensions.
Pawnshops generally work independently and the National Pawn Brokers Association does not track trends. However, a look at one of the country's largest pawn chains reinforces what Carver said about people turning to pawn during hard times.
Cash America International Inc., one of the few publicly traded pawnshop chains with 499 stores in 23 states (none in Virginia), reported first-quarter revenue grew 14 percent to $170.3 million from the same period a year ago.
The Fort Worth, Texas-based company loaned $131.98 million in the first quarter of 2008, compared with $110.62 million for the same period last year.
Pawnshops are an attractive solution for people short on cash because they are quick and simple, said Hope Thompson, treasurer of the Virginia Pawn Broker's Association.
Thompson said business at her shop, Wanted or Not Swap & Pawn in Martinsville, has been steady for the past five years because of layoffs and plant closings.
Her clientele is mostly blue-collar workers, but it has changed in the past few months to more white-collar workers, she said.
"I have seen a lot of new faces recently and it's not the people you would think."
Travis Warren, a 2008 University of Richmond graduate and football player, went to AmeriPawn to raise money for a move to Texas, collecting $45 for his refrigerator and another left behind in a dorm room.
"I'm going to Dallas, where my girlfriend got a job," Warren, 22, said. "This isn't a lot, but it'll help get some gas money at least."
While pawnshops profit from interest paid on the loans, they also make money reselling merchandise that hasn't been reclaimed.
In some states, the pawn business is regulated. In Virginia, it is not. However, shop owners here must send their receipts to police every day to guard against receiving and selling stolen items.
As the economy worsens, pawnshop owners are concerned that customers will redeem fewer items and more items will be for sale. As more people pawn items, fewer people are buying, shop owners say.
"We have to use good judgment and invest in the right mix" of merchandise, said Louis Adams, owner of the Jefferson Loan Office Inc., a pawnshop in Richmond.
The key is to balance what the shop takes in with how much it lends to customers, he said.
Contact Louis Llovio at (804) 649-6348 or lllovio@timesdispatch.com.
