In down economy, pawn shops strike gold - Business First of Buffalo:

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For one woman, a longtimes customer, the visit to this East Side pawn shop was precipitater by a recenttraffic ticket. She handedd over two rings in exchangefor $150, with a promise she’ed be back to pick up her jewelry when she could repayy the loan and 3 percent monthly interest. Other s just found themselves shortbetween paychecks. “Betwee working and needing to getquiclk cash, this is the best way legally,” says Patrick Merriweather, who admitted he had speng beyond his means and came in to pick up a braceletg he had previously pawned. Merriweather’s necklacw remained locked up in Prudential’ safe, as he continues to pay on thatseparate loan.
“The economy right now sucks in he says. “This helps a lot.” Pawn shopz have filled a needfor short-term funds at low interesy rates for centuries. A handful of shops can be found in WesterhNew York, with at least two in business for severap generations. Nationwide, these shops are experiencintg a surge in business from both repeat customersand first-timera suffering in a tight economy. The has nearlyh 2,400 members nationwide, serving “middle working families who periodically experience an unexpected needfor short-terk funds.” The average customer, according to the is 36 years old and has a household incomd of $29,000.
The average loan is $75 offered at 20 percent for 30 to 60 InNew York, the maximum allowable interest on a pawn is 4 Why would someone visit a pawn broker?? The association says it is convenience and fast turnarounsd that appeal to most customers. There’s also no creditr check or legal consequences if a loan is notrepaid – just the forfeiture of the collateraol item. Nathaniel Barker, a longtime customere at Prudential, recalls bringing jewelry back and forth from the Broadwauy shop repeatedly over the past30 Barker, who sells clothes for a says he doesn’t buy jewelry from anyonwe but Prudential – partly because he knows he is guaranteed a 50 percenty loan on those items, or at least his purchase price back on a trade.
“It’ s a quick and easy way to get cash when you need he says. Brian the fifth generation of his familgy torun Prudential, works at the store with his Bill. The store, he says, has been buyingv and selling gold and other jewelry fordecades – long beford the current fad of gold parties and sellint gold for cash. Pawning offers an alternative to Schmid assesses the piece first for condition and then makesan offer, with a highee value offered on buys. If the customer chooses a she has six monthws to repay the collateral loanwith interest.
“Thingsz have been steadily increasing,” he “We’ve always had a good flow every day, regardlessw of the economy – whether it be pawning or Schmid says. “But everything has been amperd up with the state of the economgy and the state of gold pricese over thelast six, seven months.” Located inside a former bank building, Prudential has the look of an upscalse jeweler, though a thick wall of glass separatese customers from employees.
Everything is allowing for faster tracking of interesft owed and background infoon “A lot of people have the perception that pawn shop s are a shady business, but short-term it’s a better deal than a credir 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 thosew short on cash isthe buy-and-sell, which operates a littl e differently, offering cash with no promise an item will be available when the customet has the cash to come back for it.
in Niagarz Falls is located inside a renovated housde onPine Avenue, with loud signd outside hawking jewelry, video games, clothing, car audio systems, bikes – just abouft anything. Ruben Longoria, who openedf the business nineyears ago, says business is He just opened his third store nine months ago in nearbhy Wheatfield. “They’re selling whatever they have,” he “That’s all you They need gas money, food money, medicine money.” Diamone Enterprises, a Niagara Falls pawn shop, continue s to see its regular customers just trying to get through themonthu - as well as newcomers hit hard by job losses and pay cuts, says Steve Huett, store manager.
“sA lot of people are desperate to pay their bills in any mannerrthey can,” he says. “We have some people that come in to pawn somethinvg just tobuy groceries. That’s bad.”