Pawn shop: ‘Just another retail store’
By Carrie Napoleon Post-Tribune correspondent August 30, 2011 10:32PM
Manager Mark Cannon inspects a gold necklace before negotiating a purchase price with a customer at Loansum Pawn in St. John, Ind. Thursday August 18, 2011. The shop has been in business since August 1999. | Stephanie Dowell~Sun-Times Media
At a glance
Publicly traded pawn shop companies — EZ Corp., Cash America International and First Cash Financial Services — all report strong business. EZ Corp. said its net income jumped 36 percent and revenues rose 17 percent in its latest fiscal quarter. Second quarter earnings were also up at Cash America and First Cash Financial Services. At First Cash, profit spiked 45 percent from a year earlier, and revenue was up 27 percent. Cash America reported profit jumped 29 percent, and revenue was up 14 percent.
— Sun-Times Media
Updated: November 3, 2011 11:51AM
Georgia Minko came into Loan Sum Pawn on Wicker Avenue in St. John with a plastic bag full of old gold jewelry. It was the first time she had ever set foot into a pawn shop.
Spurred by the high price of the precious metal and television commercials promising cash for gold, regardless of the condition, the St. John resident thought she would find a local shop and give it a try.
“It’s all new to me,” Minko said.
Minko is not alone. Reality TV shows such as History Channel’s “Pawn Stars” and TruTv’s “Hardcore Pawn” have helped thrust pawn shops into the mainstream and change the demographic of people who both shop and sell at pawn shops.
“Most shops are more upscale and user friendly. Basically it is just another retail store,” Mark Cannon, Loan Sum’s owner, said. “It’s a lot more like what you see on ‘Pawn Stars’ on TV.”
The stereotypical Hollywood drama depiction of a pawn shop — a seedy place for thieves to fence stolen goods or drug addicts to trade merchandise for their next fix — hasn’t been the case for a long time, Cannon said. Industry figures support that claim.
According to the National Association of Pawn Brokers, a member not-for-profit association, the average pawn customer is 36 years old with a household income of $29,000. Eighty percent of those customers are employed, 33 percent are homeowners and 82 percent have at least a high school diploma or GED.
Cannon has worked in the industry for 25 years, opening his own shop in St. John 12 years ago. These days clients are more middle and upper middle class looking to stretch their paychecks or cover an unexpected expense.
“There’s too much month at the end of the money,” Cannon said.
Record gold prices have also worked to bring more people into pawn shops, who like some jewelers and specific cash-for-gold businesses, buy gold, silver and coins they then sell to smelters for a small profit. It is that gold and silver business that is helping to keep the shop afloat during a time when the economy has people more interested in selling than buying, said Cannon.
While some people still use a pawn shop for short-term loans, ultimately paying off the debt and reclaiming their merchandise, many are looking to sell.
“Very little gets pawned anymore,” Cannon said.
That means savvy shoppers can find extreme bargains at pawn shops. Most shops boast a wide array of merchandise from collectibles and antiques to power tools and bicycles. At Loan Sum, a Star Wars R2D2 Pepsi cooler, an old slot machine and a wall of guitars popped out at first glance.
Those looking for gold, jewelry and musical instruments may be surprised by the selection and deals.
Andrew Dunn, a machinist from St. John, came in to the shop to see if there were any tools of his trade available at a discount. He said there are a lot of machinists out of work, so it is a good time to look for the expensive tools where he knows they will be cheap.
“I usually stop in once a month to see what’s here,” Dunn said. “I’ve come across some pretty good deals.”
He also inquired about selling one of his duplicate tools to the shop. Dunn said he recently married and will be moving soon with his new wife. He would like to unload a little extra baggage before the relocation.
Cannon said he will consider buying just about anything if he thinks there will be a market to sell it, but he must be more careful with his purchases than in the past because shoppers are not as plentiful.
“I try to keep the stuff better scale. In the past I would take anything. Now I can’t afford it. I’m taking a better grade of merchandise, simply because I can’t move the junk, and I can’t afford to have that sitting around,” he said.
As for Minko, what she thought was junk — a few old gold charms and a unique costume jewelry piece made from polished stones that no one in her family wanted — turned into some unexpected cash.
“That’s more than I thought I would get,” she said.