Pawn loans having a renaissance thanks to television

Friday, May 27th, 2011 By

Front of the store the show "Pawn Stars" is filmed at

Pawn loans and pawning is becoming far more high profile thanks to TV shows like "Pawn Stars." This photo of the "Pawn Stars" storefront is from Wikimedia Commons.

Television shows that feature various people who run pawn shops, offer pawn loans or buy and sell items for profit have popped up in the past couple of years. Now, wealthier customers are starting to frequent pawn businesses. The trade has suddenly gained respectability that it has not always had.

Reality television makes stars of people with a profession

A reality television show called “Pawn Stars” hit the air in summer 2009. The show, which debuted on the History channel but has since entered syndication, chronicles the goings-on at the Gold and Silver Pawn Shop in Las Vegas, Nev., according to Fox News. The main focus is the interactions between customers looking to sell items and owner/operator Rick Harrison or his father who co-owns the store. The TLC network recently debuted “Pawn Queens,” according to Reuters, about two women named Nikki and Minda who operate the Naperville Jewelry and Loan pawn shop outside of Chicago, Ill. Their store caters more toward women rather than being an all-purpose pawn store. The additional exposure has shed a little light on a somewhat mysterious profession.

New faces on old profession

Pawnbroking, according to Wikipedia, has been around for nearly 3,000 years old. Kings Henry V and Edward III of England paid for wars by pawning the Crown Jewels. Basically, a person takes a piece of property to a pawnbroker in exchange for a small personal loan. If borrowers don’t pay off the loans in time, the property is forfeited to the pawn lender. Pawn shops used to be used almost exclusively by middle and lower income people, but the wealthy have started frequenting pawn stores in recent years. Pawning has even gone online; Pawngo, according to SmartMoney, will wire someone a loan once they receive the pawned property via FedEx. Pawngo has issued loans against items like diamond rings, Cartier watches and even a genuine Picasso. Pawnbrokers have also done well in the recession, as large pawn and payday loan store chains such as EZCorp and Cash America have been reporting consistent profits throughout the past few years, according to the Salt Lake Tribune.

Gold rush has been a blessing

Over the past year or so, there has been an extensive amount of buzz about investing in gold and silver. In order for someone to cash in on those commodities, someone has to buy it, and pawn shops are doing a lot of the buying, according to MSNBC. Gold and silver have been hot commodities for some time, and pawnbrokers and precious metal recyclers are happy trade customers some cold hard cash. Some experts think it won’t last, though. For instance, economist Veronique de Rugy has observed that gold prices aren’t that high, once adjusted for inflation, and tend to fluctuate more wildly than just about any other commodity, according to Reason.com.

Sources

Fox News

Reuters

Wikipedia

Salt Lake Tribune

Smart Money

MSNBC

Reason

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