Crying all the way to the pawn, shop, no doubt

So many people — 5,000 a day — want to check out the “Pawn Stars” store in Vegas that it’s creating a traffic jam and making it difficult to keep videotaping. Brent Montgomery, creator of the top-rated show, who was in Banff, Alberta, Canada for some reason, said

A long wait

A long wait


the popularity of the reality show has brought big changes to the family business on which it is based.

The daily number of customers at the World Famous Gold and Silver Pawn Shop depicted on the show has gone from 70 to 5,000.

“It’s made production hard because we can’t let them all in at one time because it starts to look like a studio show and not a reality show,” Montgomery told the Banff World Media Festival.

“We also have to make sure they’re not in the way. They all want to take pictures.”

At Kamaaina Loan’s Maui pawn shop, we get nervous about customer satisfaction if the line is longer than 2 people. But we are not very famous. Yet.

Big dog

Here at Kamaaina Loan And Cash for Gold, we often brag about being Maui’s biggest pawn shop. But that’s big-frog-in-small-pond talk. DFC Global just announced it had bought a chain of pawn shops in Romania that will bring its total to  1,457.

Its press release says Romania has a long history of pawn loans, but the shops are quite small. 32 shops did a turnover of $9 million,  That’s less than $300K per shop. Even Maui’s smallest pawn shop probably does more than that.

DFC Global Corp. is a leading international diversified financial services company serving primarily unbanked and under-banked consumers who, for reasons of convenience and accessibility, purchase some or all of their financial services from the Company rather than from banks and other financial institutions.


Romanian pawn shops are similar to Maui pawn shops in that they primarily lend or buy gold, usually jewelry. However, they also make auto loans, which some pawn shops in America do, although not so much


Arizona loves to pawn

Nationwide,  about one American in 5 uses a pawn lender to raise cash, according to the private financial regulator FINRA.

But for some reason, in Arizona it’s 1 in 4.

Old West Indian trading posts were, among much else, pawn lenders. But there couldn’t be enough trading post business to account for the difference.

Our Maui pawn shop has active accounts for around 1 in 10 Maui residents. The FINRA survey asked whether respondents had used a pawn loan in the past 5 years.

There are other pawn shops on Maui besides Kamaaina Loan, and we have some turnover in customers over 5 years, so Maui people might be close to Arizonans in using pawn.

Nationwide, there’s more pawning in the South. But that’s because most Southern states raised the ceiling on interest, not because Southerners are specially attuned to pawning.



Fair’s fair

You may not realize it, but Hawaii law requires second-hand dealers to follow the same rules as pawnbrokers — keep records of all incoming merchandise, and of the IDs, addresses and other information about the sellers (or borrowers in the case of pawn customers).

The reason you may not know this is that island second-hand dealers routinely ignore the law and enforcement is slight. Pawnbrokers, and our Maui pawn shop for sure, follow the rules strictly.

Why not? Our owner helped write that statute decades ago.

If you think it makes little sense to require pawn shops to keep careful records to discourage fences but to allow second-hand dealers a free pass, the idea is gaining some currency. For example,  this Boston Globe story explains the outcry when police advised consignment stores — often selling expensive goods like Prada — that they, too, needed to cooperate in deterring thieves.

Reporter Beth Healey provides a good overview of the competing arguments, including one from a defense attorney about civil liberties. He’s going to lose that one.

Unusually, though, Healey ends by revealing one of the dirty little secrets of the anti-pawn shop mindset — it’s about scorning working people:


Goldstein [a pawnbroker] said that out of fairness, consignment stores should follow the same rules.

If stricter measures are being applied to people in less affluent neighborhoods with lower economic means, he asked, “Are they being implemented with people on Charles Street and Newbury Street?”

A pawn shop chain moves upscale

Pawn America is one of a couple of large (for the pawn business) chains that started in the past generation. Most pawn shops, however, are still small, local and often mom-and-pop operations.

Kamaaina Loan And Cash For Gold fits the usual pattern.

This story from the St. Paul Pioneer-Press describes how Pawn America is trying to attract shoppers who have never tried a pawn shop’s retail operation by separating it from the lending operation.

Our Maui pawn shop

Brad Rixmann, pawnbroker

did that long ago. In fact, we are perhaps overseparated, with four locations along one long block of North Market Street. One for jewelry, art and curios; one for tools, fishing and golf, the pawn shop and the new store with a wide selection of stuff, from guitars and surfboards to DVDs and Hawaiian artifacts.

The Pioneer-Press story also gives a good explanation of the difficulties pawn shops face from local governing authorities who have decided — but misguided — ideas of what pawn shops are.

“Six or seven years ago, they came to the city of Inver Grove Heights and we said no,” Mayor George Tourville said. “We took a look at the issues around how they operate, and the stigma of stolen goods going right straight to the pawn shop, and we didn’t have the votes to get them into the city of Inver Grove Heights.”


It took a while, but eventually the hicks in Inver Grove Heights got a clue:

Police were reassured by safeguards like the Automated Pawn System, which provides law enforcement with daily computerized reports on everything the pawn shop acquires — along with photo identification of each seller. That makes it much more secure than online resale activity, where it’s easier to stay anonymous.

Only then did Inver Grove Heights discuss rewriting its pawn ordinance and changing the zoning for Pawn America.

“It was not a slam dunk,” Tourville said. But with those safeguards and the company’s strong reputation, “it allowed the city council to say, ‘Hey, this is a good thing for our community,’ ” he added. “They built a good space, they’ve got people working. That space was empty and it was filled.”

As this blog has noted many times, a pawn shop is a really stupid place for a fence to offer stolen goods. He has to leave his name, address, driver’s license (or other ID) and a thumbprint, plus be filmed by surveillance cameras.





The story of a pawn shop chain

Lots of America’s pawn shops are one-outlet businesses, but there are chains, too. Here’s a feature about a fast-growing chain in the Southeast.

We find it interesting because the interviewer asked about “the seedy reputation of the pawn business.”

Rather than pretending it doesn’t exist, more and more pawn businesses are tackling this issue in public.  (Maybe it helps that the reputation of non-fringe lenders has gotten more seedy since 2008.)

Anyhow, Robbie Whitten has a good, succinct response to that question:

We’ve been fighting negative images for years. Pawn shops can be kind of shady, but the reality TV shows have been a big boost to the industry and its reputation. Now a lot of mom-and-pop shops are cleaning up their stores to take advantage of the interest.

There are a lot of new customers coming in who say they’ve never been in a pawn shop and want to check it out. We don’t want them to feel like they’re in a pawn shop. On one side we want them to think they’re in a fine jewelry store, and in the sporting goods section we want them to think they’re in a Bass Pro shop, with a department store in between.


Later in the interview, Whitten says:

There are lots of guys, like real-estate agents, who were making six figures that are now living on 40 grand. They can’t borrow $3,000 or $4,000 from the bank anymore–they just don’t make those types of personal loans. The term we like to use in the industry is “underbanked.” But these people have lots of nice tangible assets. They might have a Rolex or a $500 Ping driver they can sell.


That’s where Kamaaina Loan gets a lot of its resale merchandise. We even have a Private Viewing Room for customers who (we think) are either embarrassed to be seen in the pawn lobby or, perhaps, don;t want to be seen making a $50,000 cash transaction.

Economists list pawn shops as “fringe banking” institutions, because they serve what Whitten calls the “underbanked.” At least a quarter of Americans don’t have an account with a commercial bank. And not all of them are wearing Rolexes.

We prefer to think of ourselves as the most democratic of all “banks.” If your income is $100,00o-plus, we’ll be happy to serve you. And if it’s $10,0o0-minus, we’ll be happy to serve you.



Been there, done that

From the Gainesville, a story about a new ordinance that requires pawn shops to take a picture and fingerprint of customers pawning or selling items, and to make a daily electronic report to the local police.

“We have already begun seeing results that are a direct correlation to this ordinance,” police spokesman Cpl. Kevin Holbrook said.


The idea is to make it harder to fence stolen goods.

It’s not a new idea. In fact, Kamaaina Loan was the first pawn shop in the country to make electronic reporting available. For Kamaaina Loan, it was voluntary. Our custom software,, has for more than 10 years provided Maui police a registry of every item we take in.

Unlike years ago, officers don’t have to come down in person with lists of stolen goods. They can survey our warehouse from their offices.

In Hawaii, pawn brokers and secondhand dealers are required by law to take fingerprints and copies of identification (usually a driver’s license) from sellers. It’s a law that is widely disregarded, especially by secondhand dealers.

They are not required to make electronic registries of purchases or pawns available to police.

You, the customer, should deal only with dealers who do demand ID and thumbprint.

Only the most ignorant of criminals try to fence stolen goods at our pawn shop. If their victim has filed a police report, and we have the goods, then we also have the name, address, photograph and fingerprint of the criminal.

Police love it when that happens. It makes their job so much easier.

Pappy’s Pawn owner Gus Marroquin, right, helps Alejandro Serrano with the purchase of a smartphone at the Browns Bridge Road pawnshop.


Pawnbrokers should be smiling

IDEX Research finds that in 2012 for the first time, sales in America of jewelry and fine watches exceeded $70 billion. It is not clear from this story at National Jeweler whether resales were counted or not.

Our guess is not. But pawnbrokers should be happy anyway.

First, it gives more Americans more stuff to pawn if they feel like it. Second, it provides the wherewithal for pawn shops’ important business in recycled (second-hand, vintage, collectible, historical, retro) jewelry.

Bigger pie, bigger slices.

The percentage increase in the fine jewelry business was not as great as in 2011, but that year the prices of gold and other precious metals zoomed. In 2012, metals’ prices were up, but not as much, so the gain came from more sales.

That is, more Americans felt able to afford fine jewelry and watches last year. As our source for this story at Little Green Footballs notes, that should be taken as a vote of confidence in the overall economy.

In case you are curious, bling beats Bowser. Pets International says dog food sales are around $10 billion.




Pawn 101: ‘Rogue’ gold buyers

At the risk of sounding like a broken record (do young people even know what that means?), we are returning to the problem of dishonest gold buyers. Because the problem is not going away.

Here we link to an interview with a National Pawnbrokers Association vice president on the subject. Ric Blum makes a couple of points that Kamaaina Loan blog has not spent much time on:

First, “there are more businesses buying gold than just pawnshops. Almost every jewelry store in the country is now buying gold. Gold is being bought in flea markets, barber shops and auto repair facilities. Many are unlicensed and do not have the proper ‘legal for trade’ scales.”

Second, “Another popular scam is gold buying parties. These are usually ‘sponsored’ by a local person who is encouraged to invite all of their friends over to their house and bring their jewelry to sell to a ‘gold buyer.’ Besides not often paying a fair amount to the sellers, there are usually kickbacks being paid to the party sponsor.”

Blum says the problem is tough for law enforcement — especially if you are imprudent enough to mail your gold to somebody on the Internet. Even for local rogue buyers, enforcement is often low on the priority list for overstretched police departments.

You have to protect yourself.

Read the whole thing, but take this away: Do not mail off gold. Do check with several local buyers and compare offers.

We’d add: See us last. You’ll get the highest price that way.

Living and dying in the information age

Because we track our customers and how they are reached by our advertising, we at Kamaaina Loan are sharply aware that young people don’t read newspapers. So we spend time and effort trying to reach them other ways — this blog is one way.

An initial thought when the news arrived of the Brazil nightclub fire that killed over 230 young people was, things you don’t know can kill you. Don’t they know that setting off fireworks inside a building — especially if the building is a crowded nightclub — is a bad idea?

Today’s Star Advertiser carries a list of some of the most disastrous nightclub fires: Perm, Russia, fireworks ignite ceiling, 152 die; Buenos Aires, flare ignites ceiling, 194 die; Rhode Island, pyrotechnics ignite ceiling, 100 die.

But the partiers at the Brazilian club were mostly university students. Let’s assume they were around 21 years old. Those fires were prehistory to them: a 21-year-old was 18 when the Perm club burned, 13 when the Buenos Aires fire happened, 12 when the Rhode Island club burned.

Even news junkies, at age 21 today, wouldn’t have much sense that letting off fireworks in nightclubs often leads to bad outcomes. You’d think people could figure that out without lessons from history.

Apparently not.

And where were the adults?

A Washington Post picture from the fire