What's hot at the pawnshop these days

Eve Tahmincioglu • Profile • E-mail

It's not your father's pawnshop anymore.

The idea of the local pawnbroker running a seedy business where people from the other side of the tracks go for fast money is falling by the wayside. The nation's economic struggles are sending a whole new crop of clientele to pawnshops across the country.

Cash-strapped consumers, many of whom have lost their jobs, are turning to pawnbrokers for help, according to pawnshop operators around the country.

"There are a lot of first-timers, a lot of people that might not have been in a pawnshop before because we are the last resort," said Dave Adelman, president of the National Pawn Brokers Association and owner of Jerry's pawnshops in Atlanta.

The business of pawnbroking is not new. With roots that can be traced to ancient China, the business basically provides borrowers with money in exchange for items left at the pawnshop as collateral.

If the owner pays back the loan plus interest within a certain period of time, typically 30 days, he can get the item back. Otherwise the pawnshop is free to sell it.

The average pawnshop customer has an income of $29,000 and is 39 years old, according to the National Pawnbrokers Association. But in recent months, as the economy has weakened, pawnshop owners report seeing more affluent and older consumers in their stores.

These new patrons are upping the ante on the types of goods pawnshop operators are seeing come through their doors, such as Rolex watches and Wii video players.

"The fact that our customer base has expanded more recently because of the economic situation [means] we might be seeing better-quality goods than what we might normally see," Adelman said.

A look at some of the most popular items in the nation's pawnshops offers a glimpse at how the recession is affecting people in different industries and income brackets.

Gold rush
Jewelry has always been a mainstay for pawnshops, but gold appears to be the most common item coming into pawn stores lately. Gold is seen as a safe haven for investors during tough economic times, and this recession has been no exception. The price for gold has been hovering at about $900 per ounce.

That means pawnshop display cases are stuffed with gold necklaces, bracelets, and even Rolex watches, according to Joe Cacciatore, owner of Tampa, Fla.-based Capital Pawn & Financial Services. He has even had football players bring in Super Bowl rings and NFL rings for pawn. (He wouldn't tell us their names.)

At Uncle Sam's Pawn Shop in Columbus, Ohio, gold jewelry and diamonds are among the top items coming in and going out, said Alan Bretz, the store's manager.

"Now we're seeing people from higher socioeconomic backgrounds, and they're bringing in larger diamonds [and] the stuff right off their wrists," he explained.

So long, flat panel
A flood of big-ticket electronics is flowing into pawnshops — especially those big, thin televisions — a signal that many consumers have bitten off more spending than they can chew lately.

Video   Pawnshop basics for first-timers Jan. 5: With more Americans looking for ways to raise cash, KXAS's Brian Curtis explains what a first-timer can expect if they get a loan or sell items through a pawnshop. NBC News Channel

After years of selling like hotcakes, flat-panel televisions have become decidedly unappetizing to consumers. Sales fell in the fourth quarter of 2008 for the first time ever, according to market research firm DisplaySearch.

And while it's a loss to traditional retail outlets, the decline in flat-panel television sales is a gain for pawnshops.

They are among the big sellers and most-pawned items at many pawnshops, but store owners like Phyllis Dansky of Art's Money Loan Inc. say they're only accepting televisions manufactured in the last two years so that they can handle digital programming.

Drill baby, drill
American consumers may be getting a bit handier in the current downturn.

Sales of power tools, especially power drills, are up during this recession, pawnshop owners say, and they believe it's because more customers are being forced to do their own home repairs because they're strapped for cash.

Jack McCrory, owner of the Ace Pawn Shops chain in Indiana, says he's seeing more contractors hurting for money come into his stores and pawning their tools — typically on a short-term basis — until they can get back on their feet.

Since most of the tools are used, prices are typically 50 percent below what you'd find at Lowe's or Home Depot, said McCrory. Power tools can go anywhere from $3 to $300, he said.

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