Pawn shops' popularity rises with TV shows, down economy
The Van Nuys Pawn Shop in Los Angeles is seeing an increasing number of customers turn to it for short-term loans.
March 9th, 2012
06:43 PM ET

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.

You can listen to the CNN Radio Reports podcast on itunes or subscribe to the podcast here.

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Filed under: Economy • Showbiz • TV
soundoff (125 Responses)
  1. banasy©

    Careful chrissy. Trolls might be around.

    March 9, 2012 at 11:54 pm | Report abuse |
  2. chrissy

    @ banasy, what in detroit? And i NEVER visit detroit so i dont really know. I live in a town near detroit.

    March 9, 2012 at 11:54 pm | Report abuse |
  3. chrissy

    not me @ ll:52

    March 9, 2012 at 11:56 pm | Report abuse |
  4. Misandry

    Are you talking about me banasy?

    March 9, 2012 at 11:56 pm | Report abuse |
  5. chrissy

    good nite

    March 9, 2012 at 11:58 pm | Report abuse |
  6. dazzle©

    Hi to Chrissy and Banasy!

    March 10, 2012 at 12:05 am | Report abuse |
  7. hamsta

    @scottish mama cooking dinner isnt exactly sorry im not your typical blogger who lives in moms basement while she does all the important stuff.

    March 10, 2012 at 12:06 am | Report abuse |
    • dazzle©

      @hamsta, many of us have tried to engage you in a dialogue and you always bail out.

      March 10, 2012 at 12:07 am | Report abuse |
  8. Scottish Mama

    @hamsta I hope you know i do not live in a basement and only blog when I get the chance. I cook meals for many every night. Hamsta where do you live is in Canada?

    March 10, 2012 at 12:11 am | Report abuse |
  9. Scottish Mama

    I was questioning the Keystone and had questions. I ended up doing some research. Does not sound like a good thing for the US.

    March 10, 2012 at 12:12 am | Report abuse |
  10. leeintulsa

    she likes pawn stars.. and storage wars.. and antiques roadshow.. plot always seems the same.. i need story, man..

    and i can say i've always stood in line at the pawn shop..

    March 10, 2012 at 12:14 am | Report abuse |
  11. Scottish Mama

    @leeintulsa- you talking about Dazzle?
    Hi Dazzle.

    March 10, 2012 at 12:18 am | Report abuse |
    • dazzle©

      Hi Scottish Mama, Lee better not mean me 🙂

      March 10, 2012 at 12:19 am | Report abuse |
    • leeintulsa

      my she.. the one that does my laundry..

      just shootin for topical...

      March 10, 2012 at 12:32 am | Report abuse |
  12. hamsta

    i live in new orleans.

    March 10, 2012 at 12:18 am | Report abuse |
  13. jackal

    @ hamsta, you live UNDER a basement???

    March 10, 2012 at 12:19 am | Report abuse |
  14. Scottish Mama

    @lee- I am not a pawn star but a good garage sign I cannot pass up. Dumpster diving in neighbors wares, I can do it if it is dressers. chairs or

    March 10, 2012 at 12:20 am | Report abuse |
  15. Scottish Mama

    @hamsta so the you work in the oil field a rough neck?

    March 10, 2012 at 12:22 am | Report abuse |
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