Pawn shops report more sales, fewer loans during pandemic
After nine months, Tad Tetrie has finally got her “baby” back.
It’s a Rickenbacker bass guitar, which he pledged to Buy Here Sell Here on the East Side for money to put a deposit on a new apartment. He planned to repay the loan sooner, but then lost his security job amid the coronavirus pandemic.
“I couldn’t afford to take her out, so I just paid the interest,” said Tetrie, 55, of North Side. “But I had to redo three of my guns and one of my guitars to help pay some bills while I looked for a new job.”
After finding a job, Tetrie was able to buy back his bass last month – and he’s not the only one.
According to some owners of local pawn shops, more people pay to collect their items than apply for loans. Retail sales are also on the rise. And that’s the exact opposite of what they thought would happen during a global pandemic that shattered the economy.
Raphael Tincher, president of the Ohio Pawnbrokers Association, said it was a trend he had noticed in Buckeye State and nationally.
“Nobody really needs the money,” said Tincher, who helps run Ted’s Pawn Shop in Cincinnati. “What we saw was that people had so much money that they were paying off their loans. They don’t borrow money, they don’t sell anything. And instead, they buy. We have had – and this is true for most stores – three months in a row where sales were as good, if not better, than at Christmas.
Some attribute this to the government’s relief efforts in response to the coronavirus.
“That’s the stimulus,” said John Kinney, who runs one of Lev’s Pawn Shop’s East Side locations. “[And] a lot of people are making more money on unemployment than before, which allows them to go out of business. … But we are in the field of wages. We make loans. This is how we make a living. So these are unusual times.
Tincher agreed and pointed out the lack of entertainment options during the state-mandated business shutdowns. People were no longer spending money on food, concerts or sporting events, he said.
“They had money in their pocket like, ‘Well let’s pay off a debt or buy something (in the store),'” he said.
At Max Kravets’ two Buy Here Sell Here stores in Columbus, two items were in high demand: guns and game consoles.
“In the last two months we’ve had 10 or 20 calls a day for PlayStation 4,” he said.
People also buy bikes, exercise equipment and other electronics, according to Kinney and Tincher.
There have been changes in the way they do business, of course. In addition to tracking ordering for masks statewide, pawn shops also use plexiglass shields at the counter, enforce social distancing rules, and use hand sanitizer after handling items.
“We disinfect touch surfaces several times a day,” Kinney said. “So far – I touch wood – no one has gotten sick.”
Business may be unpredictable, but Kinney is hopeful.
“We will survive. … It won’t be easy. It’s a fight, ”he said.
Kravets, whose company received a paycheck protection program loan, is also optimistic.
“We are not worried,” he said. “If I had a restaurant right now, I would probably be worried.”
Plus, it’s not like everyone has discretionary income during the pandemic. Several customers have flocked to Buy Here Sell Here in the past week, hoping to get the cash quickly.
“They help people get up, but not as much as they should,” said Jacquan Jackson, 34, of Linden, who brought a smart TV. He was disappointed with the amount of the loan, but said he would at least buy food.
Jason Miller, a 45-year-old construction worker from Newark, brought in a power converter, but it was not accepted. He said he was not struggling to get by, but knew many others who were going through a difficult time.
“People are suffering right now,” he said. “I talk to people in the field that I do and some of them don’t have a job, period. They say it’s a direct result of this (pandemic). They took all their tools to the pawnshop and had to sell them just to get through the week, so the pawn shops have their place.
While stores might not be alarmed just yet, the worst could be yet to come, Tincher said. Fewer loan requests means lower inventory; Pawn shops expect a certain percentage of customers to default on their loans, which means their items are made available for retail sale.
“I think it’s going to be a real problem,” Tincher said. “In my back rooms, there could normally be 300 televisions there. (Now) there could be 50.… So I think the pawn shops are going to be in a crisis in, say, three or four months when they don’t have items.