January 26, 2015 00:32 UTC

This Is America

Inside the World of Pawn Shops

A pawn shop window in Northern Virginia
A pawn shop window in Northern Virginia

Multimedia

Play or download an MP3 of this story


SHIRLEY GRIFFITH: Welcome to THIS IS AMERICA in VOA Special English. I’m Shirley Griffith.

CHRISTOPHER CRUISE: And I'm Christopher Cruise. This week on our program we tell you about pawn shops in the United States.

SHIRLEY GRIFFITH: Pawn shops are businesses where people bring their possessions to get a small, short-term loan or to sell. The United States has about twelve thousand of them. Pawn shops may be large or small, clean or dirty, but they are all full of stories about people's lives.

This may explain the popularity of reality programs like "Pawn Stars" on the History Channel.

(SOUND)

It features a family of pawnbrokers in Las Vegas, Nevada. "Hard Core Pawn" on TruTV features a pawnbroker and his grown son and daughter in a large pawn shop in Detroit, Michigan.

(SOUND)

These shows are among the most-watched programs on the two cable channels. But some pawnbrokers consider them misleading.

Most of the time the programs show people who want to sell their items. Pawnbrokers say very few customers want to do that. They just need a small loan for a short time.

CHRISTOPHER CRUISE: People who want "fast cash" can get a loan based on the resale value of their item. This is what it means to pawn something. The pawnbroker will sell the item if the loan is not repaid on time.

But sometimes people do want to sell an item. The pawnbroker might buy it and then try to resell it for a higher price. Pawnbrokers say twenty-five to thirty-five percent of their money comes from selling items.

Some pawn shops specialize in jewelry, but most of them accept a wide variety of items.

(MUSIC)

SHIRLEY GRIFFITH: Pawnbrokers in the United States have a trade group. The National Pawnbrokers Association began in nineteen ninety-eight. It seeks to improve the image of an industry that has a long history but not a very high place in public opinion.

Kevin Prochaska is one of the leaders of the association. He has more than thirty years of experience as a pawnbroker and owns thirteen pawn shops in Texas.

KEVIN PROCHASKA: "What we do is, somebody comes to us with a piece of personal property and they own that piece of property. They can either sell the item to us, but the other transaction that we do is we will advance money on that personal item.

"We've 'liquified' their asset. They’re not really in any debt, because they’ve just exchanged an item that they own for cash. All the customer has done is, he’s taken his property and turned it into cash.”

Kevin Prochaska says many of his customers keep coming back to his pawn shops.

KEVIN PROCHASKA: "I think our average customer is probably between twenty-five and forty-five years old, and in my experience your turnover of customers is about twenty-five percent. So you expect that about one out of four customers walking in the door is probably a new customer. And out of the four customers walking out the door, one of them won't be back.”

CHRISTOPHER CRUISE: There are pawn shops in some of the wealthiest areas in the United States. But most pawn shops are in poorer neighborhoods. Most people who get a loan from a pawn shop do not earn much money and have not saved much money. Their access to other forms of credit is limited.

In a pawn transaction, the customer gets a short-term loan of about fifty to seventy-five percent of the value of an item. The item itself acts as the security or collateral for the loan. The term of the loan is usually one to six months.

Customers can get the item back at any time by repaying the loan plus the interest they owe. Or they can just pay the interest and keep the item at the pawn shop. In some cases, if the item is worth a lot, it might be safer in the store than in the person's home.

SHIRLEY GRIFFITH: Pawnbrokers say between seventy and eighty percent of pawned items are reclaimed by their owner. They say the higher the value of the item, the more likely that the customer will pay back the loan.

The amount of a loan depends on the location of the pawn shop and the kinds of items it accepts. The typical loan for a pawned item is fifty to one hundred dollars. Pawnbrokers say customers most often need money for gasoline, medicine, electricity, car repairs and rent.

(MUSIC)

CHRISTOPHER CRUISE: Pawnbrokers say computerized records and cooperation with the police have reduced the number of stolen items brought to pawn shops. Some shops make video recordings of their transactions. And most states require people to show identification if they want to pawn something.

Rules for pawn shops differ from state to state. Some states, for example, limit the interest rate that pawn shops can charge on loans to three and a half percent a month. Other states allow rates as high as twenty-five percent. Not surprisingly, states with stronger regulations have fewer pawn shops.

SHIRLEY GRIFFITH: You might think the recession was good for business at pawn shops. But pawnbrokers say their sales of items dropped just like at other stores, while more people came to them seeking loans.

In the nineteen thirties, many banks failed during the Great Depression. Pawn shops were often among the only places where people could get money.

People do not need a job or a good credit history to get a loan from a pawnbroker. The most commonly pawned items are electronics, musical instruments, tools and expensive pieces of clothing. But people can get a loan on almost anything of value.

Kathy Pierce is one of the owners of Monster Pawn in Bloomington, Illinois. She is a member of the board of directors of the National Pawnbrokers Association.

KATHY PIERCE: "I take in lawn mowers and bicycles and canoes and concrete saws and drills and DVD players. I know a little bit about a lot of stuff."

CHRISTOPHER CRUISE: Kathy Pierce says the average loan she makes is sixty dollars. She also says she has seen an increase in the number of middle class customers.

KATHY PIERCE: "Now I see everybody. I see teachers. I'm in a small community with a lot of very large companies. A lot of people have jobs in my community -- that's not our problem. But bills are expensive and the electricity still goes up and people don’t get raises. Gas prices at four dollars this summer, I will be busy."

Ms. Pierce says no one is forced to use her services, and is happy being a pawnbroker.

KATHY PIERCE: "I love what I do. I found out I was good at it. And every day is different, and I love my customers. These people are really endearing and they become part of your family. They're a part of your lives just as much as you’re a part of them.”

SHIRLEY GRIFFITH: But not everyone feels the same way about pawnbrokers. Critics have accused them of abusing the poor by charging high interest rates. Pawnbrokers say high rates are the result of high business costs including security and storage.

Another criticism involves "low-balling." This is telling an uninformed customer that an item is worth less than it really is. But the opposite also happens. Customers sometimes invent stories about items and claim they are worth more than they are.

This is why pawnbrokers must know a lot about many different things -- antiques, jewelry, furniture. Items that may have been in families for generations. They have to decide the age of an item, whether it is real or fake, valuable or worthless.

CHRISTOPHER CRUISE: Sometimes pawnbrokers speak with an expert or do research through books and the Internet. But most of the time they depend on their own years of experience.

Most pawnshops in the United States are owned by an individual or a family. Some companies, however, have been buying pawn shops and building national chains.

These companies have tried to change the image of a pawn shop by having clean, well-lit and well-operated stores. Many other pawn shops are making these changes as well, as the industry tries to convince more Americans to use its services.

(MUSIC)

SHIRLEY GRIFFITH: I'm Shirley Griffith with Christopher Cruise, who wrote our program. Brianna Blake was our producer.

What do you think of pawn shops? Post your comments at voaspecialenglish.com, where you can find transcripts and MP3s of all of our programs. And click on The Classroom to find English teaching activities.

CHRISTOPHER CRUISE: You can also write to us on Twitter and Facebook at VOA Learning English. Join us again next week for THIS IS AMERICA in VOA Special English.

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Learn with The News

  • Video Experts Decide Ethiopia Has Best Coffee

    What makes Ethiopian coffee the best? International coffee experts travel the world to find the best tasting cup of coffee, however they keep returning to Ethiopia. The country has an export revenue of more than $840 million a year from coffee to 120 countries. More

  • Thailand Fishing Industry

    Audio Labor Groups Criticize Abuses in Thai Fishing Industry

    Thailand is the third largest exporter of fish and fishery products in the world. Those exports are worth more than eight billion dollars. But the Thai fishing industry is under attack because of reports of labor rights abuses and human trafficking. The government is taking steps to stop the abuses. More

  • Audio Vietnamese Officials Worried about Political Blog

    The blog publishes documents and photographs, and has linked suspected corruption to cabinet members and their relatives; the blog has been visited almost 14 million times since it was launched a month ago. People’s Daily has suggested that the information is false. More

  • korea2

    Video S. Korean Businesses Want to Ease Trade Restriction with North

    Business leaders in South Korea are urging the government to ease trade restrictions with North Korea. They believe that expanding trade will help their businesses and contribute to long-term peace and security on the Korean peninsula. South Korea cut many economic ties with the North in 2010. More

  • Should Schools in US Recognize Muslim Holidays

    Video Should Schools in US Recognize Muslim Holidays?

    Some religious minorities in America are demanding that schools close on their religious holidays. They ask, if Christian and Jewish holy days are recognized, shouldn’t those of other faiths also be observed? The issue is being debated in Maryland, near Washington, DC. More

Featured Stories

  • Obama

    Audio Has Obama Set the Message for the 2016 Campaign?

    “I have no more campaigns to run … I know because I won both of them.” Mr. Obama cannot run for president again – U.S. presidents may serve only two terms. But some observers say his most recent State of the Union message on the middle class sounded like a campaign speech. More

  • American Sniper

    Video With Oscar Nomination, 'American Sniper' Stirs Debate

    The movie is based on a book by Navy SEAL Chris Kyle. He is considered the deadliest marksman in the history of the United States military. The film explores how war can affect a soldier's mental and emotional health and stirs a debate on social media over its message. More

  • Designers work at computer stations at TechShop in the South of Market neighborhood in San Francisco, California, April 24, 2014

    Video TechShop Puts High-Tech Dreams Within Reach

    Members of TechShop use high-tech equipment to develop and produce ideas they have for inventions. Members are able to use costly machines including 3D modeling tools and laser cutters. Membership costs for TechShop start at just over $100 per month. | Science in the News More

  • .

    Video Rare, Important Art Is Now Only a Click Away

    The public has never seen the majority of works in the Smithsonian Institution's National Museums of Asian Art. Now they can be downloaded from the Internet -- in many cases for free. The Freer and Sackler Galleries worked for over 15 years to make digital copies of more than 40,000 objects. More

  • Video Light Pollution. How Much Light is Too Much?

    Light pollution can affect our ability to see the night stars. It can also hurt our health and the planet. But light is needed to make our cities safe. How can we find a balance? In cities, artificial light comes from street lamps, buildings, signs and cars and blocks out stars in the sky. More

Practice Your Writing

Confessions of an English Learner blog
Confessions of an English Learner blog

 

 

 

Tell us About Our Programs