Pawnbrokers lend money on items of value ranging from gold and diamond jewelry to musical instruments, televisions, tools, household items,
etc.. These items maintain their value over a reasonable period of time and are easy to store, especially jewelry. all customers provide
collateral, eliminating the need to distinguish high risk from low risk borrowers. Typically, loans are small averaging between $70 and
$100, although they can be as small as $20 or as high as several thousand dollars depending on the value of the collateral.
The
process is much the same as any other lending institution, with the primary difference being the size of the loan, the collateral and the
holding of the merchandise until the interest or the loan has been repaid.
Why would someone go to a pawn shop to get a loan?
Pawnshops offer the consumer a quick, convenient and confidential way to borrow money. A short term cash need can be met with no credit
check or legal consequences if the loan is not repaid. A customer receives a percentage of the value the broker believes the collateral
would bring in a sale. although the loan to collateral ratio varies over time and across pawnshops, a loan of about 50 percent of the
resale value of the collateral is typical. In other words, pawnbrokers feel their loan is "paid in full" at the time it is made. When
a customer pawns an item, terms of the loan are printed on a pawn ticket that is given to the customer. The ticket states the customers
name, address, type of identification provided to the pawnbroker, a description of the item, amount lent, maturity date.
What is the foreclosure procedure?
If a customer defaults, the collateral becomes the property of the pawnshop after the loan is overdue by a specific amount of time.
Do most pawning customers lose their merchandise?
On average, 85 to 90 percent of all loans are repaid. Repeat customers make up most of our business, similar to any other lending or
retail establishment. Pawnbrokers know the vast majority of their customers because they often borrow against the same items over and
over again. Pawnbrokers offer non recourse loans, looking only to the item being pledged to recover their investment if the borrower
chooses not to repay the loan. It is solely the choice of the customer whether he/she elects to repay the loan.
How can I be sure the merchandise I purchase at a pawnshop isn't stolen?
Less than one fifth of one percent of all collateral is even suspect as having been misappropriated in any manner. Thieves and robbers
are a pawnbrokers worst enemy. Pawnbrokers work closely with local law enforcement to catch and prosecute these perpetrators. A customer
must provide positive picture identification to show evidence of the transaction. This information is then presented to the police
department, therefore decreasing the likelihood that a thief would bring stolen merchandise to a pawnshop. Pawnbrokers are trained to
look for signs of stolen property to avoid these costly mistakes. it is not in the interest of the pawnbroker to accept potentially
stolen merchandise because the police can seize the merchandise and the pawnshop owner loses the collateral and the loaned money.
What is the difference between buying at a pawnshop and buying at a retail store?
Mainly price! Pawnshops can offer you quality merchandise ranging from 1/3 to 1/2 off retail prices.
Why is the image of pawnbroking changing since the 1930s?
Today's pawnbroker is upgrading everything from the interior and exterior of his or her shop location, employee presentation, customer
service, sign age, marketing and the merchandising approach. Pawnbrokers focus on providing exceptional customer service and are very
active in the community, both politically, and in local charities. Pawnshops today range from a single or multi-store operation to
publicly held company chains. The atmosphere at a pawnshop is nothing like what you saw in Rod Steiger's depiction in The
Pawnbroker - just visit one to see for yourself. But you must also realize that there will always be the bad apples in the barrel, just
like in any other industry.
Are pawnshops a "bad times industry?"
Pawnshops survive bad times if they make adjustments both at the retail and loan counters, but they do far better in good times. In hard
times, customers move away to find employment, have less ability to repay their loans and the value of all merchandise goes down.
Merchandise values go down because the major retail discounters sell for less to maintain or broaden market share. If they sell for less,
pawnbrokers must loan less thus earning a smaller return. Regardless of income level, most people periodically borrow money. In good
times, customers are more able to repay their loans and unredeemed merchandise sells faster because customers have more discretionary
income.
Do pawnshops attract indigents and derelicts?
Absolutely not. Indigents and derelicts have no assets to use as collateral. No one builds a business around these people. The typical
pawnshop loan customer is employed, living within one mile of the store, is of either sex, and occasionally needs short term cash for an
unusual bill such as a medical expense or car repairs. The typical retail customer is a bargain hunter, either by need or desire and comes
from all walks of life. Most pawnshop customers are repeat customers.
Do Pawnshops downgrade the neighborhood and hurt property value?
Neighborhood property values are impacted by the appearance and care given to the properties. There is no factual basis to support a claim
that an eye pleasing pawnshop negatively impacts values. On the contrary, if they attract customers, they enhance the opportunities for
other merchants and the community.
Should photographing or fingerprinting pawnshop customers be required?
Pawnshop customers already provide full identification with each transaction, a copy of which goes to local law enforcement. Additionally,
all PawnZone shops maintain surveillance cameras in their stores, the same system used by banks. to require anything more than required by
banks implies there is a relationship between how much money one has and their integrity. you have questioned the quality of their
character based on financial status - a form of discrimination.
Should there be zoning restrictions other than general retail?
Pawnshops are neighborhood businesses providing vital services to the community. to restrict zoning to other than general retail should
require a very compelling reason. The compelling reason should not be historical perception. to restrict zoning there would be something
wrong with the service provided, the business itself, or the customer served. The services provided by PawnZone Corp.
include:
•
Discount retail (new and
preowned) is an opportunity for the customer to make them more discretionary funds.
•
Short term credit enables the community to pay the bills of other local merchants such as groceries, medical expenses,
utilities, auto and transportation to work.
