In down economy, pawn shops strike gold - Dallas Business Journal:

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For one woman, a longtime customer, the visit to this East Side pawn shop was precipitatedf by a recenttraffic ticket. She handed over two ringss in exchangefor $150, with a promis e she’d be back to pick up her jewelry when she coule repay the loan and 3 perceny monthly interest. Others just found themselvex shortbetween paychecks. “Between working and needinhg to getquick cash, this is the best way legally,” says Patrick Merriweather, who admitted he had spentg beyond his means and came in to pick up a braceleg he had previously pawned. Merriweather’s necklace remainedr locked upin Prudential’s safe, as he continuezs to pay on that separate loan.
“Thed economy right now sucks in Buffalo,” he says. “This helpse a lot.” Pawn shops have filledf a needfor short-term fundse at low interest rates for centuries. A handfupl of shops can be found in Western New with at least two in business forseveral Nationwide, these shops are experiencing a surge in busines s from both repeat customers and first-timers sufferinfg in a tight economy. The has nearly 2,40o members nationwide, serving “middle class, workingt families who periodically experience an unexpectefd needfor short-term funds.” The averags customer, according to the association, is 36 years old and has a householdr income of $29,000.
The average loan is $75 offeredx at 20 percent for 30 to 60 InNew York, the maximum allowable interestr on a pawn is 4 percent. Why would someones visit a pawn broker? The association says it is convenienc e and fast turnaround that appealo tomost customers. There’s also no credit checkl or legal consequences if a loan is notrepai – just the forfeiture of the collaterapl item. Nathaniel Barker, a longtim customer at Prudential, recalls bringing jewelry back and fortyh from the Broadway shop repeatedly over the past30 years.
who sells clothes for a sayshe doesn’t buy jewelruy from anyone but Prudential – partly because he knowds he is guaranteed a 50 percent loan on those items, or at least his purchase prics back on a “It’s a quick and easy way to get cash when you need he says. Brian Schmid, the fifth generation of his family torun Prudential, works at the store with his Bill. The store, he says, has been buying and sellingb gold and other jewelry fordecadesz – long before the currentt fad of gold parties and selling gold for Pawning offers an alternativre to selling.
Schmid assesses the piece firsg for condition and then makesan offer, with a highed value offered on buys. If the customerf chooses a loan, she has six months to repag the collateral loanwith “Things have been steadily increasing,” he says. “We’ver always had a good flow every day, regardless of the economty – whether it be pawning or selling,” Schmids says. “But everything has been amped up with the statee of the economy and the state of gold pricess over thelast six, seven months.” Located insider a former bank building, Prudentiall has the look of an upscaled jeweler, though a thick wall of glase separates customers from employees.
Everything is allowing for faster tracking of interest owed and background infoon “A lot of people have the perceptionm that pawn shops are a shady business, but short-term it’s a betterr deal than a credit card,” says Bill Schmid. “People will say, ‘In six months, I hope to be in better shape’. For a lot of it’s an insurance policy.” Another option for thosde short on cash isthe buy-and-sell, whichg operates a little differently, offering cash with no promise an item will be available when the custome has the cash to come back for it.
in Niagars Falls is located inside a renovaterd house onPine Avenue, with loud signsa outside hawking jewelry, video games, antiques, car audio bikes – just about Ruben Longoria, who opened the business nine yearws ago, says business is good: He just opened his thirxd store nine months ago in nearby Wheatfield. “They’re selling whatever they he says. “That’s all you They need gas money, food money, medicine Diamond Enterprises, a Niagara Falle pawn shop, continues to see its regular customers just tryingf to get through themonth - as well as newcomerw hit hard by job losses and pay says Steve Huett, store “A lot of people are desperate to pay their billse in any manner they can,” he says.
“Wew have some people that come in to pawn something just tobuy That’s bad.”