In tough economy, pawn shops busy
By Steve Huffman
Looking for a good deal on a diamond ring? Check with Jerry McGee.
McGee, the owner of Security Pawn Shop on South Main Street in Salisbury, has more than 3,000 diamond rings in stock, most offered for sale at a fraction of their retail prices.
The reason for this influx of jewelry?
“You can’t eat a diamond ring,” McGee said.
As the economy has soured, more and more people have turned to pawning items in order to pay for necessities like gas and food.
“The price of fuel has affected so many people and layoffs are hurting,” McGee said. “It’s tough times.”
McGee said it’s not just lower-income people who buy at pawn shops. He said several doctors and dentists visit his store on a regular basis.
“We deal with all kinds of people,” McGee said, “doctors as well as folks who have exhausted all other means of coming up with money. Everyone loves a bargain.”
At EZ Pawn & Jewelry on South Salisbury Avenue in Spencer, Thomas “Flick” Flickinger, manager, said business at his shop remains brisk despite ó and in large part because of ó recent economic problems.
“The last couple of weeks, I’d be thinking we were kind of slow, then I’d look up and the place would be full of customers,” he said.
Flickinger said the benefits of buying from a pawn shop are obvious.
“People would rather pay half-price here than go to Lowe’s and pay full price for a drill,” he said.
Flickinger said there are times he feels genuinely sorry for those coming to him looking to pawn something. He recalled a recent day when a man asked him to step to his vehicle where he had a number of items spread for display.
The man asked Flickinger if there was anything there of value.
“They’re coming in with anything to see if they can make a dollar,” Flickinger said. “Times are rough and they’re going to get worse before they get better.”
At Reliable Pawn Shop on Mooresville Road, owners Jason and Carlton Cross said they buy a good deal of gold that is shipped to dealers who melt it for resale.
The demand for gold is tremendous, with prices at about $900 an ounce. Five years ago, an ounce could be had for about $325.
Jason said that at Reliable, they get a good amount of chains and class rings. “Usually it’s nothing too fancy,” he said.
Jason said that about 80 percent of the people who pawn items intend to come back and reclaim them, though only about half wind up doing so. He estimated the store ships about 5 to 7 pounds of gold out of state every three to four months. The gold is usually melted.
Pawn shop owners stress they’re not in the business of buying items, though that’s often what happens.
Pawn shops provide short-term loans to consumers who need cash in a hurry. To get the loan, consumers leave an item with the pawnbroker. In return, they get a fraction of the value of the item.
The pawnbroker holds the item for 30 days, at which point the owner can reclaim it (plus pay fees for interest and insurance) or pay to finance the item for another month.
If the item isn’t reclaimed by the owner, the pawnbroker must ó to make sure the item wasn’t stolen ó hold it for 90 days before selling it.
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Staff writer Katie Scarvey contributed to this story.