It’s hard for me to shake my prejudices against pawnshops. I can’t help but alternately associate them with George Lucas’ Watto and those Frontline episodes labeling pawnshops as your neighborhood drug money repository. Still, recession-era shifts in consumer attitudes are reinvigorating America’s formerly underground pawn economy and it’s worthwhile to take note of the swelling pawn empire: who’s borrowing, who’s buying and why?
We all know that charging high interest rates on brokered loans allow pawnshops to cut great deals on just about anything, from high quality jewelry and sports equipment to consumer electronics. And just this year, stores here in Denver reported holiday sales spikes of 40% and the 3 publicly traded U.S. pawnshops reported net incomes up at least 25%. It makes sense that those of us looking for ways to save have found ourselves checking the pawnshops for our kids’ band instruments or anniversary gifts.
As always, I’d recommend staying aware of predatory lending whether it’s a bank or a pawnbroker. But check out my latest consumer infographic on the trend you might be missing out on: