DEL.ICIO.USAs the economy sinks, pawnshops get busy
The Atlanta Journal-Constitution
Saturday, October 18, 2008
Jenna Feistkorn relinquished a working laptop for just $40. The exchange at an Alpharetta pawnshop left her frustrated, but not ashamed.
She needs the computer to look for a job. But it will remain off-limits until next week, when her father gets paid and can repay her loan.
PHIL SKINNER /pskinner@ajc.com
Joe Ellis, owner of Cherokee Coin and Pawn in Alpharetta, has seen more people trying to sell costume jewelry, which he doesn’t accept. ‘I’m sensing people are scraping the bottom of the barrel,’ Ellis said.
PHIL SKINNER/pskinner@ajc.com
Travis Shelton sorts through bags of jewelry at Cherokee Coin and Pawn.
“It’s so bad, it hurts,” Feistkorn, 22, said of her financial state. “This is reality. I need the money.”
Around Atlanta, many others share her pain.
As the local economy sinks, pawnshop owners and managers say they have more first-timers and more frequent visits from regular customers, who tend to surrender the same item over and over again. Pawnshop managers say they also see anecdotal evidence that even the seemingly well-off are searching for things to sell for quick cash.
Diamond engagement rings, muskets dating to the early 1800s, vintage jewelry passed down from grandparents – all have been pawned in recent months at Cherokee Coin and Pawn in Alpharetta.
For jewelry, Joe Ellis, the business owner, only accepts gold, sterling silver and high-end gems. This year, he’s had more people trying to sell or pawn costume jewelry, none of which he takes.
“I’m sensing people are scraping the bottom of the barrel,” Ellis said. “It indicates to me they’re going through their drawers more.”
Ellis, whose business began with rare coins in 1972, is sympathetic. “If you’ve got any compassion in you, and I do, some of the stories are horrific – job losses, children’s sicknesses, being scammed out of something,” he said.
If his customers are late with a loan payment, he’ll often let it slide, he said. Nothing that’s pawned is offered for sale for at least 60 days – two weeks more than the standard window.
“I’m not going to take advantage of someone in a downtrodden situation,” Ellis said. “I’ve let some people slide for six to nine months on something. Most of that is rings, diamond rings.”
At Cash and Ride Pawn, a shop in Decatur, the owner reports an uptick in small items that people want to sell outright, rather than pawn. At the same time, people are pawning fewer big ticket items, such as flat-screen TVs.
“They’re less likely to pawn it if they think they’re going to lose it,” said Jerry Cannon, a partner in the business.
At Cash and Ride, the shop holds a pawned item for 40 days. In exchange, the customer gets 30 to 40 percent of its value in cash. If customers want to retrieve their property, they must pay back the original loan, plus interest, or make periodic payments.
The interest rate is 25 percent for the first three months, then 12.5 percent after that.
If such interest rates seem steep, they haven’t reduced demand.
At Piedmont Pawn in Midtown Atlanta, manager Ron Worth doesn’t need to advertise anymore. Lately he’s noticed more first-timers, and after 21 years, he can spot them on sight.
Transactions can be emotionally draining on both sides of the counter, especially when someone is surrendering a wedding diamond. Usually the cash helps cover rent or a mortgage.
“You can see it in their face, when they come in to pawn,” Worth said. “Some of them just break down at the counter. Men, women. It’s that bad to them.”
In Marietta, at Chicken Little Pawn, Michael Riggs sees the trickle-down effect of a poor economy.
Many of his customers often pawn the same thing “over and over again,” when they need short-term cash, Riggs said.
“I’m like a bank for people,” he said.
At the other end of the cycle are the bargain shoppers. When items are relinquished, or sold to pawn shops outright, they become available for sale, usually at a fraction of their original cost.
At Cherokee Coin and Pawn, Ellis sells gold to customers at its melt value – the price he would get if he sold it to a refinery. His glass cases hold three Rolex watches this week, all for thousands less than they would cost someone new.
Floydette Roy, an Alpharetta office worker, spent a recent lunch break shopping for a new laptop. The pawn shop has several still in boxes, purchased from people who wanted cash for them.
“A bargain is a bargain,” Roy said. “I thought, let me look here before I go to the regular stores. Let me see what the pawn shops have.”
