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Pawn it or Sell it? Current Trends in the Pawn Shop Industry

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Throughout history, pawn shops have played a vital role in originating loans and doing business within the second-hand marketplace. Pawn shops can be found an almost any major city around the world and Pawnbrokers are able to cater to a variety of situations form lending money to buying consumer goods and personal property items for resale. We recently inquired about the future direction of the pawn shop industry and reached out to Boca Raton Pawn, South Florida’s only high-end Pawn Shop which, has a gorgeous storefront across from Mizner Park in Boca Raton, Florida. Boca Raton Pawn is a family owned-and-operated pawn shop that specializes in high dollar collateral loans. Like most pawn shops in Boca Raton, the pawnbrokers at Boca Raton Pawn buy, sell, and trade. Examples of items they always have their eye on include luxury watches (Rolex, Cartier, Breitling, Audemars, etc.), estate and designer jewelry (Tiffany & Co., Van Cleef & Arpels, etc.), gold, diamonds, designer handbags, and more.

We recently had the opportunity to ask Lee Josephson of Boca Raton Pawn a few questions about current trends and where he sees the future of the pawn shop industry headed.

How has the Pawn Shop industry and pawnbroker services changed since the recession hit in 2008?

Since the recession hit in 2008, we are seeing a lot more people that have been accustomed to a lifestyle they can no longer afford to support. These people believe (as do we) that it is only temporary; which is why high dollar loans have become in high demand in certain demographics. These are not your typical pawn shop clients. We are seeing more loans over 5k to send the kids to summer camp, or pay the club membership dues. As an organization we are also seeing a lot more athletes off season coming in for loans to bridge the gap between offseason and season. We mainly deal with loans from 5k to 150k and an occasional 250k loan.

If eBay didn’t exist (or couldn’t be used as a comparable market resource), what tools would pawnbrokers rely on to provide fair market values on items bought and sold? 

We don’t believe that pawnbrokers as a whole use eBay to value items. Some pawn software comes with built in programs to help value the items that come in. Real jewelry buyers, car buyers, property buyers or pawnbrokers use their longterm experience to evaluate the value of items that come in.

Do you think online pawn shops have a future?

In the state of Florida, in order to be in compliance with our state law, we cannot offer online loans. All clients must appear in person. As for other states, they do allow this. It seemed more like a fad than anything. Some companies got venture capital money with huge marketing budgets and this seems to be slowing down tremendously. Most people with high value, even priceless items to them, want to see where they are leaving their items to be safeguarded. Between Boca Raton Pawn and Raymond Lee Jewelers there is somewhere close to 10 million in insured loan value if there happened to be a loss and people feel comfort with that. So we believe there was a quick slow in Internet pawn and this trend will continue.

What can pawn shops and pawnbrokers do to help improve the rough image of pawn shops? (so many news stories on shootings, theft, stolen goods, etc.) – How can things be changed to attract more affluent buyers and sellers?

It’s a really hard thing to change the image of pawnbrokers and pawnshops as a whole because there are a large number of establishments that break the law and knowingly purchase stolen goods. This is especially happening in low income areas. However, in recent times a pawn shop located in Boca Raton was charged with fencing stolen goods. People have to remember like any business there are good and bad apples and a little research will quickly tell you the difference. Checking with the pawn shop division in your state will show you the number of complaints against any given business. The most important thing to remember is that pawn shops were the first means of borrowing money in American History. Until this day, it is a reliable way to borrow money. High end pawnshops are already attracting affluent clientele to pawn, sell or buy. In Palm Beach County, every jewelry store and pawn shop alike is required to get a finger print from every client and a drivers license along with what they are selling.

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