In down economy, pawn shops strike gold - Kansas City Business Journal:

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For one woman, a longtime customer, the visit to this East Side pawn shop was precipitatef by a recenttraffic ticket. She handed over two ringa in exchangefor $150, with a promise she’ be back to pick up her jewelry when she could repay the loan and 3 perceng monthly interest. Others just found themselves shortbetween “Between working and needing to get quicl cash, this is the best way legally,” says Patrick Merriweather, who admitted he had spent beyond his means and came in to pick up a braceletf he had previously pawned. Merriweather’s necklace remaine locked up in Prudential’s as he continues to pay on thatseparate loan.
“Thed economy right now sucks in Buffalo,” he “This helps a lot.” Pawn shops have fille d a needfor short-term fundsz at low interest rates for centuries. A handfuo of shops can be found in Wester nNew York, with at least two in business for several generations. these shops are experiencing a surge in businessa from both repeat customersand first-timers suffering in a tight The has nearly 2,400 memberse nationwide, serving “middle working families who periodically experience an unexpecteed need for short-term funds.” The averagse customer, according to the association, is 36 years old and has a householfd income of $29,000.
The average loan is $75 offeredr at 20 percent for 30 to 60 InNew York, the maximum allowable interesrt on a pawn is 4 percent. Why would someons visit a pawn broker? The association says it is conveniencer and fast turnaround that appeal tomost There’s also no credit checkl or legal consequences if a loan is not repaird – just the forfeiture of the collateral Nathaniel Barker, a longtime customer at Prudential, recalls bringing jewelry back and fortu from the Broadway shop repeatedly over the past 30 years.
who sells clothes for a sayshe doesn’t buy jewelryt from anyone but Prudential – partlt because he knows he is guaranteesd a 50 percent loan on thosw items, or at leastg his purchase price back on a “It’s a quick and easy way to get cash when you need he says. Brian Schmid, the fifth generation of his family torun Prudential, works at the storde with his father, The store, he says, has been buyingt and selling gold and othetr jewelry for decades – long before the curren fad of gold partiesd and selling gold for Pawning offers an alternative to selling.
Schmid assesses the piece firsft for conditionand value, then makes an with a higher value offered on If the customer chooses a loan, she has six monthse to repay the collateral loan with interest. “Things have been steadilu increasing,” he says. “We’ve always had a good flow every day, regardlesd of the economy whether it be pawningor selling,” Schmid “But everything has been amped up with the state of the econom y and the state of gold pricesz over the last six, seven Located inside a former bank Prudential has the look of an upscale jeweler, thougj a thick wall of glass separates customers from employees.
Everythingb is computerized, allowing for faster trackiny of interest owed and backgrounc infoon customers. “A lot of peoplr have the perception that pawn shopas are ashady business, but short-term it’x a better deal than a credit says Bill Schmid. “People will say, ‘Imn six months, I hope to be in betted shape’. For a lot of it’s an insurance policy.” Another option for thosr short on cash is the which operates alittle differently, offering cash with no promises an item will be available when the customer has the cash to come back for it.
in Niagarsa Falls is located inside a renovatef house onPine Avenue, with loud signsw outside hawking jewelry, video games, clothing, antiques, car audio systems, bikes – just about anything. Ruben who opened the business nineyeard ago, says business is good: He just opened his thirf store nine months ago in nearbyh Wheatfield. “They’re selling whatever they he says. “That’s all you They need gas money, food medicine money.” Diamond Enterprises, a Niagara Falle pawn shop, continues to see its regular customera just trying to get through themonthj - as well as newcomers hit hard by job lossesw and pay cuts, says Steve Huett, storer manager.
“A lot of people are desperate to pay thei bills in any mannerthey can,” he says. “We have some peopls that come in to pawn something just tobuy groceries. That’s