News Column

Pawnshops Pawnshops may not fit stereotype

June 16, 2014

By Grace Toohey, The Frederick News-Post, Md.

June 16--Pawnshops traditionally have a shady reputation, but as pawnbroker Peter McDonald likes to point out, his customers come inside from Mercedes-Benz, SUVs, pickups, BMWs and minivans alike.

"For so many years, people thought we dealt with junk, that we were just old guys behind bars, smoking cigarettes," said McDonald, owner of Frederick Jewelry and Loan. "And that's not the case."

The best part of working at a pawnshop, he said, is being able to help people in need. Eighty-eight percent of pawnbrokers cite pawn loans as their most common transaction, when people bring in an item in return for a cash loan, according to the National Pawnbrokers Association 2013 trend survey.

"You really do get to help people, there's people that are in a bind," McDonald said. "They don't want to sell their stuff, they just want a loan. There's a million other places they would rather be than standing in front of you asking for money. It's a humbling experience. We do our sincere best to make sure they are comfortable."

Pawnbrokers hold the item for a certain amount of time, giving the customer time to repay the loan with interest. If the deadline to reclaim is not met, the item moves to the floor for sale and the loan is kept as payment in full. According to the National Pawnbroker Association, 80 percent of loans are repaid from pawnshops, which may stem from pawnshops average loans being $150.

This short-term credit system that doesn't require a credit check can help when people are in a bind, such as when phone bills need to be paid before it gets shut off, said Tony Smith outside of Famous Pawnbrokers at 1409 W. Patrick St. He used the system when he needed quick money, but now he goes in to pawnshops looking for good deals on jewelry.

Other than loans, pawnshops will also immediately take in items that people no longer need, use or want, and if they are of value, brokers will exchange them for cash on the spot, McDonald said. In his store, his merchandise includes Tiffany & Co.'s jewelry, vintage musical instruments, historical artifacts, high-end watches, DVDs, jerseys and more. The only difference from other stores: they were previously owned, but that means the deals are better.

Though watch-enthusiast Wayne Zimmerman said yard sales and some antique shops will beat pawnshops' prices, they are some of the best places to go for good finds, but he knows there is a stigma attached to them.

"The poor people that come into the pawnshops are pretty destitute. They are pretty bad off," Zimmerman said. "I see people who come in trying to get $5. (But) the guys (working) are great."

McDonald said shows such as History Channel's "Pawn Stars" are helping to dispel myths about pawnshops, and he believes the more people know about pawnbrokers, they will be more open to coming inside.

"We're insured, we're bonded, we're highly regulated by the state," he said. "We do a lot of research, so we don't rip people off. We would much rather sell something for a little less than for too much, because we (rely on) word-of-mouth referrals."

There's also an assumption that people steal items then pawn them, but only a tenth of 1 percent of pawned merchandise is stolen, according to National Pawnbrokers Association. All Frederick pawnbrokers require identification and report the item to law enforcement, and then hold the item for 30 days, which helps turn away illegally acquired items.

Joe Jackson has sold and bought items at pawnshops because he said it's a fair deal, especially compared to Internet sites such as eBay and Craigslist.

"I think it's pretty fair for what you're getting because it's on the spot, like on eBay I've got to pay eBay fees, then I've got to try to sell it, then ship it out," Jackson, a Google business photos representative, said. "You can get a good deal in here, out of anywhere else, other than Craigslist, and this is way safer than dealing with someone on Craigslist; you don't have to meet with strangers, and you at least get a receipt."

Merchandise in pawnshops is varied, which doesn't usually make them a destination place for a specific item. McDonald said he is always looking for special pieces to make sure people keep stopping in.

"You never know what you're going to find," he said. "If you think we wouldn't take it, it's probably what we want to see."


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Source: Frederick News-Post (MD)

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