Loan Rangers

Posted Tuesday, Apr. 01, 2014  comments  Print Reprints

Pawn Shop Stats

Pawn shops are turning from the shady realm of the lower class to a place for rich people to get loans, the Wall Street Journal reports. The typical household income of a pawn shop customer is $29,000, but new middle- and upper-class clients are surging. One such client pawned a $9,000 fur coat to buy private-school uniforms. Some pawn shop owners are reporting 30-40 percent increases in transactions.

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Bobby Whitehead knows a lot about collateral lending.

What? Not familiar with that term?

Rick Harrison, beloved television personality of the History Channel’s hit show Pawn Stars, along with Corey, Chumlee and the “Old Man” have been involved with the ancient practice of collateral lending for years, but today it’s more commonly known as pawn brokers.

Whitehead, a second generation broker, grew up watching his dad in action at his pawn shop businesses in Fort Worth since he was just 8. And although the 59-year-old has strayed off the pawn shop path on occasion, the allure has always drawn him back.

“It’s true, you never know what or who is going to walk through those doors,” Whitehead said.

In the years since the breakout series Pawn Stars, Whitehead said the characters of the show couldn't have done more in the area of “good will” to improve the image of the industry overall.

“They normalized what we have been doing for years,” Whitehead said.

Perception, he said, has always been an issue with the pawn business, citing that as early as the late 19th century major media outlets, such as the New York Times and Post, depicted pawn brokers as “shylocks” conducting business with nefarious characters.

Whitehead said it was quite the opposite.

“We’re looking at an item we can loan some money on, that’s going to help the client,” Whitehead said. “I say it’s like a parachute. We’re going to be alright if you don’t come back for your merchandise and we’re going to be alright if you do.”

He said his customers don’t look to him as a last option but more like a steady source of income when needed.

“You can’t get a $100 loan at a bank,” he said. “There is no pressure of a background check.”

As for the redemption rate - the amount of people that actually return to retain their merchandise - Whitehead said it’s 70 percent. That’s almost two-thirds of the people that pawn something who come back to pick it up.

“The big sign out front says ‘pawn,’” he added. “We’re not going to sell your stuff until we've done everything we can to get it back to you.”

Whitehead said that people who pawn make up less than 10 percent of the people who buy and vice versa.

“The pawn shop business is different from almost any other retail type of environment because I have a personal relationship with my clientele,” he said. “You probably don’t know the manager of the big retail store down the street, or the owner of the burger joint, but you know who your pawn broker is if you’re doing business with me regularly.”

But before you can pawn anything, Whitehead said his personnel have to undergo extensive training.

“We’re licensed by the State of Texas, by the offices of the Consumer Credit Commission which falls under the Texas Finance Act,” Whitehead said. “So every employee is licensed by the state, which also requires a federal background check. That means you can’t be a convicted felon and work in this business.”

As for the merchandise he moves, everything is carefully cataloged and posted on Leads Online, a free service used by law enforcement that makes sure an item hasn’t been stolen.

“I take every transaction we’ve done on a weekly basis, download it and police departments across the nation that participate within the system have access to it,” he said. “Statistically, for this store last year, we had less than 1/10th of 1 percent of what was pawned or sold returned to the victim of a burglary - with no cost to the victim - which is the national average."

As for the type of merchandise Whitehead sells, 60 percent of his business is in jewelry.

There are around 12,000 pawn brokers in America and most average loans are in the amount of $100 to $150 and he is no exception. The way a loan works is based on a 30-day time period. During that time, you can pay for the item pawned or get an extension. If you fail to pay anything after the initial 30 days, there is an additional 30 day grace period before it becomes the pawns shop’s property.

Whitehead has been doing business in Weatherford for more than a decade and recently changed the name of his business on South Main to Gold-N-Pawn. As for the strangest item that has ever been pawned at his shop, he couldn’t say.

“There have been so many neat things - some I wish I would have kept,” he said. “Every day is just so different.”

Lance Winter, 817-594-9902, Ext. 102 Twitter: @Lancewinter

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