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. Scottish Mama

    @Krozar I once knew a girl who pawned a Fender for $50.

    March 10, 2012 at 1:27 am | Report abuse |
  2. chrissy

    good nite dazzle.

    March 10, 2012 at 1:27 am | Report abuse |
  3. banasy ©

    Good night.

    March 10, 2012 at 1:32 am | Report abuse |
  4. chrissy

    yup good night all, from me too, busy day tomorrow.

    March 10, 2012 at 1:37 am | Report abuse |
  5. banasy ©

    Please leave your final comments before you close?
    Is that like bring your final selections to the cashier before they close the store for the night, lol?

    March 10, 2012 at 1:41 am | Report abuse |
  6. Tommy Mack

    It's cool when "bots" take over a thread.

    March 10, 2012 at 1:54 am | Report abuse |
    • dazzle©

      You should know

      March 10, 2012 at 2:10 am | Report abuse |
  7. dazzle©

    Gotcha!

    March 10, 2012 at 2:05 am | Report abuse |
  8. chrissy

    lol @ nicole, good nite and very funny lmao!

    March 10, 2012 at 2:05 am | Report abuse |
  9. banasy ©

    Hmmmm. Closed comments.
    I knew that was fake!

    March 10, 2012 at 2:07 am | Report abuse |
  10. chrissy

    lmao and i suspected it too! we ARE good! 🙂 twisted sistas

    March 10, 2012 at 2:11 am | Report abuse |
  11. wildone

    Am I too late? Damn, I always seem to miss out on making some inane comment, like the majority here, that has nothing to do with the article.

    March 10, 2012 at 6:30 am | Report abuse |
    • banasy ©

      Thanks for your imput, which has nothing to do with the article, either.
      Congrats!
      You're one of the inane majority!

      March 10, 2012 at 3:55 pm | Report abuse |
  12. John

    nsaidi's brain will be closing down, because – oops, too late! It's already gone!!

    March 10, 2012 at 7:19 am | Report abuse |
  13. Percy

    The main problem with pawn shops is they have always been used (too successfully) on many occasions to move stolen merchandise – not a good thing !

    March 10, 2012 at 8:53 am | Report abuse |
    • Catnippy

      Actually, they are highly regulated in most states. Doesn't mean they will follow the regulations, of course. But if they don't, they won't be in business long.

      March 10, 2012 at 9:08 am | Report abuse |
    • Old Town Pawnshop

      Pawnshops in California require a valid ID with a 30 day hold on every item purchased – the information of every purchase and loan is forwarded to the local Police Dept. My bet is that a thief doesn't think a pawnshop is the best place to liquidate stolen goods. Swap meets, Craig List, private party, and even Ebay are not regulated like a pawnshop. We guarantee all our items for sale and work with the local PD if there is anything questionable. No pawnshop will knowingly risk his licence and livlyhood on stolen goods. My 2 cents.

      March 10, 2012 at 4:14 pm | Report abuse |
  14. Patrish

    My favorite 18K gold earrings came from a pawn shop. Go with an established store, not little dinky ones. Be knowledge about the item you want, and know their policies.

    March 10, 2012 at 9:05 am | Report abuse |
    • dave b

      Hey my daughter had her favorite 18kt gold earrings stolen from her house.......wonder where they went?

      March 10, 2012 at 11:25 am | Report abuse |
  15. Johnobody

    @Percy: That's why the cops check out the pawn shops for stolen merch.

    I travel a lot for work and thoroughly enjoy visiting the shops in whatever town I end up visiting. Fayetteville, NC has the best stuff (GI's buy nice stuff, but they're bad at managing their money). The most interesting pawn shop I have ever seen was Liquid8 Pawn in Key West, FL. They'd make a better series than 'Vegas.

    March 10, 2012 at 9:17 am | Report abuse |
    • Larry

      When I got to Ft. Hood, one of the first things I noticed was that there seemed to be a pawn shop on every corner in Killeen. I think I counted forty-nine one time. The GIs would hock the expensive electronic stuff they bought at the AAFES before paydays and recoup them afterwards.

      March 10, 2012 at 9:58 am | Report abuse |
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