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Rolexes to TVs, pawnshop deals reflect times

Even once well-off are unloading pricey purchases for quick cash

By Janet Forgrieve, Special to the Rocky

Published May 29, 2008 at 5 p.m.

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Salesman Tony Cantu holds a replica of B.B. King's guitar "Lucille," which is on sale for $1,199.95 at Pasternack's Pawn Shop in Lakewood. Owner Scott Pasternack has seen an upsurge in business in the past year, with average loan amounts roughly doubling to a range of $150 to $200.

Photo by Chris Schneider / The Rocky

Salesman Tony Cantu holds a replica of B.B. King's guitar "Lucille," which is on sale for $1,199.95 at Pasternack's Pawn Shop in Lakewood. Owner Scott Pasternack has seen an upsurge in business in the past year, with average loan amounts roughly doubling to a range of $150 to $200.

This diamond ring could be had Thursday at Pasternack's Pawn Shop in Lakewood for $2,499.99.

Photo by Chris Schneider / The Rocky

This diamond ring could be had Thursday at Pasternack's Pawn Shop in Lakewood for $2,499.99.

A limited-edition handgun was offered Thursday at $649.99 at Pasternack's Pawn Shop in Lakewood.

Photo by Chris Schneider / The Rocky

A limited-edition handgun was offered Thursday at $649.99 at Pasternack's Pawn Shop in Lakewood.

Pasternack's in Lakewood also had this drum set for sale at $1,999.99. Such higher-end items are increasingly available.

Photo by Chris Schneider / The Rocky

Pasternack's in Lakewood also had this drum set for sale at $1,999.99. Such higher-end items are increasingly available.

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When car salesmen started frequenting her pawnshop last year, Ashley Buckley took notice.

As their monthly commissions dropped from as much as $8,000 to perhaps $1,000, they joined the ranks of customers struggling to make ends meet, said Buckley, the owner of Broadway Jewelry and Pawn in Littleton.

"That's when we started seeing the big ones - the Rolexes and other high-priced watches," said Buckley, who has owned her store for six years.

These days, she and other area pawnbrokers say they are seeing several more trends that reflect tougher times, both for lower-income consumers and formerly affluent folks.

Regular customers are showing up more often, Buckley said, and her shop is making more loans.

Also, the number of items people are redeeming has dropped to 85 percent from about 90 percent.

"Many are more desperate," she said. "They have to pay for gas. We see a lot of single moms who have to pay for food and school and sports fees. I actually had people that came in to pawn things for their kids' graduations. One lady had a couple of kids graduating, and they needed new shoes."

Basically, pawnshops make short-term loans based on 25 percent to 50 percent of the book value of an item, charging from 10 percent to 20 percent monthly interest. Loans typically range from 30 to 90 days, with a 10-day grace period. When that grace period runs out, shops are free to place the items for sale.

At Pasternack's Pawn Shops in Aurora and Lakewood, owner Scott Pasternack is seeing similar trends, along with a slew of bigger ticket and luxury items that are driving up his monthly loan totals.

Last year, his average loan ranged from $75 to $100, Pasternack said. This year, that's jumped to a range of $150 to $200.

His total loans each month have almost doubled from about $50,000 to about $90,000 as consumers walk in with $20,000 watches and giant-screen TVs bought in better days.

Pasternack is also seeing a lower redemption rate, he said, with only about 62 percent of customers coming back in to pay off their loans and redeem their property, down from 70 percent this time last year.

People typically use pawnshops as a last resort when they're caught in a squeeze and need quick cash, said Sarah Allen Gilbert, executive director of Consumer Credit Counseling Service of Northern Colorado.

Cash-strapped consumers who have a little bit of time and want to sell their property outright might get a better return if they turn to Craigslist or eBay, or even an old-fashioned garage sale if they have enough stuff to unload and would rather sell than incur pawnshop interest rates, she said.

Still, pawnshops may be the best short-term solution for some who find themselves in an emergency situation where they need quick cash, she said.

"You're paying for stuff you already paid for," she said. "But if you do have a stimulus check coming or a bonus at work, and you know you can repay the loan, it might be the right thing. (A pawnshop) shouldn't be your bank, but it certainly is a resource if you've got a problem you can't solve any other way."

Tim Lanham, president and CEO of Fort Collins-based Mister Money, which has 45 U.S. pawnshops, 11 in Colorado, said the redemption rate at his shops has held steady at 89 percent, but the number of loans has risen.

Nationally, his redemption rate has held steady at 89 percent, and his stores aren't seeing an influx of big-ticket items, he said. Still, all his shops are making more loans than they were a year ago.

"Our average loan is typically around $100, and we haven't seen that grow," he said. "What we have seen is an increase in the number of loans we're writing every day, due to the increase in utilities and gas. The number of people who are employed has stayed the same - we see the increase and I think it's just because it's harder to make ends meet at the moment."

Wait till you see this

Pawnshops overwhelmingly say they make most of their loans on everyday items like jewelry and electronics. Still, shops see unusual items walk in the door from time to time, including:

* An entire restaurant's worth of kitchen appliances

* Seven brand-new $2,500 Nautilus machines

* A $7,000 flute

- Ashley Buckley, Broadway Jewelry and Pawn, Littleton

* Deeds to cemetery plots

- Scott Pasternack, Pasternack's Pawn Shops, Aurora and Lakewood

* A glass eye, which has been pawned and redeemed several times

-Tim Lanahan, Mister Money, based in Fort Collins

Average pawn customer taking a loan

* Age: 36

* Household Income: $29,000

* Average loan:

$75

30 to 90 days

80% are employed.

82% have a high school diploma or GED.

33% are homeowners

Comments

  • May 30, 2008

    8:33 a.m.

    Suggest removal

    vudumom writes:

    The sad thing about this type of business is the person who sold the guitar or didn't pay the loan back probably got $100 for the guitar. No telling what he could have gotten for it by selling it on his own. The guitar retails for about $2,800 and guitars usually keep their value if they are name brands like Gibson,Fender , Paul Reed Smith and some Ibanez. Replica's of famous people guitars sometimes hold their value. The owner of the guitar probably could have got a quick $1,200 - $1,500 cash by selling it himself. It's unfortunate to see a scummy pawnshop owner getting the benefit of selling a item that is worth something while taking advantage of someone else's hardship.

    Nice guitar too. Anyone wanting to buy it should have it checked out by a professional guitar shop for neck or fret damage because people do not know the correct way to store a guitar. Also have someone replace all strings and check the guitar out thouroughly and get a set-up done. This will cost about $250 depending on if there is any major repairs.

  • May 30, 2008

    10:28 a.m.

    Suggest removal

    Scott writes:

    Pawn shop dealers, used car dealers, lawyers, dope pushers, repomen, prostitutes, bail bondsmen. The scum-de-la-scum of the human race.

    Scott

  • May 30, 2008

    12:06 p.m.

    Suggest removal

    bone writes:

    boo effing hoo, crybabys...you only ever slam, who you let slam you..

    pawn shop dealers : the only way to lose your a** in a pawn shop, IS TO GO TO ONE !

    (i'll bet you hate bartenders too, because they charge you $8 bucks for a beer you could get at the liquor store for $2 )

    used car dealers : clean up your credit, get a better job, and go to the "NEW CAR DEALER"

    (by the way, the salesmen....ARE THE SAME PEOPLE ! )

    lawyers : i suppose you believe "jorge miller, attorney at law, is there for YOUR rights" ? ?

    ( and you know, those commercials are on during JERRY SPRINGER for a reason... )

    dope pushers : please, you know why there are no shady characters in the shadows on the corner selling krispie kreme glazed for $100 a dozen ?....there has to be buyers, for there to be sellers

    (and those k/k glazed, those have to be better than crack..ever had them straight outa freezer w/ HOT black coffe ?

    repo men : you are funny, PAY YOUR CAR PAYMENT

    (..........sorry, nothing....)

    prostitutes : you're joking

    bail bondsmen : that is the best, but fittingly the last....

    IF YOU DON'T LIVE BEYOND YOUR MEANS:YOU'LL NEVER BE A "PAWN" IN A PAWN SHOP...BY THE TIME (IF EVER) YOU CLEAN UP YOUR CREDIT, FRED THE USED CAR SALESMAN WILL BE FRED THE NEW DEALERSHIP OWNER, GOOD LUCK WITH THAT...IF YOU DON'T BUY DOPE OR PROSTITUTES, YOU'LL NEVER NEED A BONDSMEN...AND THE COPS WON'T KICK YOUR A** ON VIDEO EITHER..

  • May 30, 2008

    12:38 p.m.

    Suggest removal

    Diff writes:

    STOP your WHINNIN! -
    Fair market value: When a willing seller and a willing buyer agree on a price -

    No one is forced to sell or take a loan or buy at a pawn shop..

    And BTW if you are knowledgeable about what you are buying and some-what careful - you can get some good deals at a pawn shop!

  • May 30, 2008

    12:45 p.m.

    Suggest removal

    Scott writes:

    Hey bone,
    What makes you think I have ever dealt with most of the afore mentioned scum? O.K., O.K., I've dealt with used car dealers, once, for my first vehicle. Now I go to the only honest dealership in the area, Purifoy Chevrolet. I've dealt with lawyers at the bare minimum, Wills and patents.

    Therefore, your insinuations and claims are full of !@#$.

    Scott

  • May 30, 2008

    1:30 p.m.

    Suggest removal

    bone writes:

    you branded, not me, i spoke in general, you spoke specific...how can you brand them scum if you've never dealt with them ?...i suppose you think everyone in the news named jose is illegal and all blacks like rap...

  • May 30, 2008

    2:22 p.m.

    Suggest removal

    buffsblg writes:

    bone do not feed the troll. If we ignore scott maybe he will crawl back into his cave and quit ranting about the same stuff day after day. You cannot talk someone with OCD out of a position using logic.

  • May 30, 2008

    2:55 p.m.

    Suggest removal

    Scott writes:

    bone,
    TAKE YOUR MEDs ... NOW! As an example: How do I know that drug pusher are scum if I haven't dealt with them? Oh now come on! Also, hat last sentence was really stretching it.

    Scott