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Pawn shops' popularity rises with TV shows, down economy
For years, pawn shops have had a seedy and hopeless connotation: people pawning items for short-term loans because they can’t get a loan from a bank or don’t qualify for mainstream credit. But over the past five years or so, pawn shops have had a whole new light shed on them.
In this down economy, especially with high credit-card and bank-loan interest rates, pawn shop business is up. Pawn popularity also is up because of reality shows like the History Channel’s "Pawn Stars."
(Click the audio player to hear more on this story from CNN Radio's Jim Roope)
"Pawn Stars" features the Gold and Silver Pawn Shop in Las Vegas and its owner, Rick Harrison, who says pawning is banking at its most basic.
"You give collateral on a loan; (if) you don’t pay it back, you lose your collateral, and that’s the end of it," Harrison said. "There is no turning you into a credit reporting agency. There’s no suing you, no garnishing your wages. It’s just that simple."
Cesar Salgato, manager of Van Nuys Pawn in Los Angeles, says that over the past four or five years, his business has increased 60%.
"A lot of the middle class and upper middle class is starting to pawn," Salgato said. "It's incredible, the amount of money that goes out for meeting mortgages and meeting payroll."
Stacey Simons is a real estate broker who was pawning collector plates.
"I needed the money," Simons said, giggling. "Times are tough, and I needed the money."
Simons is a regular customer at Van Nuys pawn.
"This, you can pay every three months. There's a little bit of a fee, and they keep your item, and when you’re ready to get it back, it’s there for you, and it's not damaged," Simons said.
According to the National Pawn Brokers Association, there are 13,000 pawn shops in the United States, and they conducted 30 million transactions last year.
The fees are regulated state by state, but there are federal regulations by which pawn shops must operate. The fees or interest rates can be relatively low.
“On a $1,000 loan, for the first 90 days, you only pay $70," Salgato said. "After 90 days, it goes up slightly to $110. So if you divide that by the four months, it’s a small amount."
Still, pawn shops can charge much more. In New York, pawn shops can charge up to 4% per month in interest, which would come out to a 48% APR, CNNMoney's Poppy Harlow reported. Pawn shops in other states can charge up to 25% per month, Harlow reported.
Get pawn shop tips from CNNMoney
According to the National Pawn Brokers Association, 80% of people who pawn return to recover their items.
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We've replaced our hero George Bailey, the caring banker in 'it's a wonderful life' who helped build a town, with the greedy Old Man in 'Pawn Stars', who helped build reality TV.
of course bailey was a fictional character.. that's like saying we turned away from superman for cops..
Fictional character? You mean... He's not real?
I'll take the old man, It's A Wonderful Life makes me want to punch the TV with its saccharine bs. Thew world was never like that, bankers were never caring, and at least the Harrisons aren't luring people into the trap of homes they can't afford.
Statistical fact that less than 1% of goods sold at pawn shops are stolen.Thieves dont like being caught....With our computerized systems here in MA...We are linked directly to all the surrounding police dept.
Why would you sell to a pwn shop when Craigslist or Ebay will bring you double what a pawn shop will?
most people who take things to pawn shops intend to get them back..
because people need the money immediately and cant wait for an on line sale. also many people that use pawn shops cant afford internet service and a computer.
And if people sold these things at auction or ebay, they would do much better. Too lazy and stupid I guess
most people will stop paying their internet service bill before they resort to pawning their belongings. also if they cant make rent have no food or cant pay the electric there is no time for an on line auction.
Job interviewers who offer minimum wages will not hire an applicant unless they are receiving food stamps. Employers realize that it is impossible to feed oneself on 7 bucks an hour causing the employee to resort to theft of company property.
LOL. Really?
Pawn Shops are increasing because of the internet. End of story.
Pawn shops are increasing because they are smart business people. Granted, they are cashing in on the fact that people have overspent for years. Now due to economic reasons, they are forced to part with lifes unneccessary treasures! Plain and simple.
Too obvious wasnt it Paul? Lol, you would be surprised how many people buy into the *reality tv* thing though.
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why does rick keep saying his shop wqhen the old man own s 51 %of the shop
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First of all hats off for your writing skills. The way you explain things is quite different that i have never found in other blogs. I am agree with your blog TV shows tremendously increased the popularity of pawn shops, i also got aware via TV show.