Economists point out that when the economy isn’t great, the pawn shop business booms.
Pawn shops around the state and the country are saying they are doing the kind of business they haven’t seen since the 2008 financial crisis.
Whether it’s jewelry, gold coins, or tools, stores are reporting increased inventory, which means fewer buyers but plenty of sellers.
“We’ve seen plenty of individuals taking money out of their 401k to pay for necessities and now we are seeing people pawning their items just to survive,” said financial analyst Steve Beaman.
In Miami, Jose Leyva with Larry’s Estate Jewelry & Pawn says with the price of gas, food, and rent, business at pawn shops is booming. “People are selling what they have to pay their bills,” Leyva says many of the store’s clients are new, not repeating customers.
In Tampa, Capital Pawn, near Busch Gardens, is seeing record business. “I’ve seen more gold and silver jewelry come into his shop than ever before,” said Joe Cacciatore, who has owned Capital Pawn for over 25 years.
“It’s been unbelievable. The folks that have been coming in are not just poor people, but wealthy people who are probably living over their means. And they’re bringing heirlooms from their family. And more people are struggling to pay their bills,” said Cacciatore.
Larger companies are also reporting the same thing.
EZCORP has over 530 pawnshops in the U.S., and its numbers have seen an 8% increase. FirstCash Holdings, which has around 1,200 pawnshops under the names Cash America and FirstCash, said it had a 10% increase in inventory at its U.S. stores and “record pawn receivables” in its most recent year-end earnings report.
“Pawn balances have risen across the country in the past two years, said Laura Wasileski with the National Pawnbrokers Association.
People of color, those with less education, lower incomes, disabilities, and single-mother households were more likely to lack bank access, according to the FDIC.
On the front end, pawn dealers loan to customers, and that item can’t be touched for at least 30 to 90 days. The pawn shop then holds the customer’s merchandise during the term of the loan until the loan is paid off, including interest and fees. But pawn companies are saying those that have pawned their items are not coming back to reclaim them.
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