Pawn Shop Prosperity
ARLINGTON, Texas, April 21, 2008— -- At the Cash America pawn shop in Arlington, Texas, you could outfit, repair and protect your house with all that's on the shelves — the cast-offs of other people's lives.
With the economy near recession, pawn shops are overflowing. People are using their valuables as collateral for loans, most hoping that in a month or two they'll have enough money to pay back the loans plus interest. Otherwise, their valuables belong to the pawnbroker.
Sandra O'Neil wants to buy back her grandma's ring one day.
"My grandmother would haunt me from her grave if I didn't come get this," she said.
Cash America's CEO Daniel Feehan is reluctant to admit it, but hard times are good times for the pawn industry.
"During the early stages of a downturn in the economy we're gonna get a temporary boost as people use our lending services to try to adjust to the changing financial services they find themselves in. And they'll use our retail services to find bargain purchases on merchandise that stretches their dollar a lot further than it would otherwise go," he said.
Craig West said he comes in now a couple of times a week. Now he's selling tools for $15. He's sad to leave them behind, but said, "you do what you gotta do."
The extra cash will end up in his gas tank.
"It's tough, it's real tough," he said.
Customers are selling either because they have things they no longer need, or because they need something else more. Herbert Bailey got $90 for an old gold chain he's not planning to redeem. Essentially, he's trading gold for gas.
"Gas is $3.50 a gallon in some places, $3.25, $3.00, a little extra money helps me out right now so I'm happy with that," he said.
That's a typical refrain here: the high cost of gas and food has led customers to empty their drawers and storage sheds.
