By Bill Hardesty | [email protected]

Quick. Pop quiz. How many pawn shops are in South Salt Lake? Eight? 10? 13?

All those numbers are too high. There are only four pawn shops in SSL and according to the land use matrix in the municipal code, that number will not increase. While the current pawn shops can sell and a new pawn shop can open, but it must be at the same location. Additional pawn shops are prohibited in SSL.

Why?

"I have noticed over the years, there has been a real push to move pawn shops from the urban part of the valley out south and west. Maybe because pawn shops were viewed as sleazy," said Alex, an employee at Premier Pawn (3721 S. State).

Unfortunately, many people's views of pawn shops are shaped by modern entertainment. Pawnbrokers are viewed as fences for stolen goods and selling items "under the table." In fact, some common synonyms for a pawnbroker (an owner or employee of a pawn shop) are shylock, loan shark, usurer, bookie and lender-of-resort. 

Maybe some unlawful activity still happens, but organizations like the National Pawnbrokers Association (NPA) worked hard to change the image.

Today's pawn shops

"In today’s society, many people depend on pawnbrokers to help them meet daily financial needs not offered by other institutions. Pawn customers represent the working families of America who periodically experience an unexpected need for short-term funds. Pawn loans keep the electricity on, the rent paid and cars running with full tanks of gas," says the NPA website.

Alex says that they serve those individuals who live paycheck to paycheck. Those folks who are making $10 an hour.

"We help them live," Alex said.

Mike Katsanevas, owner of Crown Jewelers & Pawn (130 E. 3300 South) and Crown Pawn Express (3302 S. 300 West) explained that 22% of Americans do not have any banking relationship. 

"We fill a niche for these people who need a short-term loan," Katsanevas said.

According to the NPA, the average pawn shop loan customer is 36 with a household income of $29,000. Eighty percent are employed and 82% have a high school diploma or GED. Thirty-three percent are homeowners. They come from all ethnic groups and the national average loan amount is $150.

The NPA reports that approximately 30 million Americans use pawnbrokers to meet financial needs.

Most pawn shops are family-owned businesses. In many cases, they are long-term owners as is the case with Josh, also with Premier Pawn, who has worked in the family business for 26 years.

The two main revenue streams for pawn shops are the interest paid on loans and the difference between the loan amount and the selling price. For example, the pawnbroker gives you a $100 loan, but after the surrender period, the pawnbroker sells the item for $120. They realize a $20 profit.

History

Pawnbrokers date back to ancient China and the Greek and Roman civilizations. Queen Isabella is reported to have pawned her royal jewels to finance Christopher Columbus’ voyage to the New World.

The traditional pawnbroker symbol is three gold spheres hanging from a bar. The story is that St. Nicholas, often referred to as the patron saint of pawnbroking, left three bags of gold so that the daughters of a poor man could afford to marry. This saved them from a life of slavery or prostitution. This idea of helping others during a time of need is at the heart of pawn brokering.

For us who love words, the term pawn came into English in the late 15th century (as a noun): from Old French “pan” meaning pledge or security, and of West Germanic origin related to Dutch “pand” and German “pfand.”

Loaning/Buying

The loan process (pawning) at a pawn shop is straightforward. You bring in an item of value. The pawnbroker appraises the item and offers a percentage of the sell value. A person also has the option to sell the item.

At Premier Pawn, the amount for the item is the same whether you are selling or pawning. Other pawn shops might give you a bit higher price if you are selling versus pawning.

If you accept the pawn offer, you accept a renewal 30-day loan with interest. At Premier Pawn, the interest rate is a flat 10% every 30 days. 

Compare this to an average 17.25% interest rate on credit cards or 15% to 30% on a payday loan that are typically for two weeks.

Per state regulations, when you pawn or sell an item, you must provide some form of identification, your signature, your picture and your fingerprint.

Loans can be renewed every 30 days by paying only the interest. Often there is a grace period because "life happens."

At Crown Jewelers & Pawn, 85% of loans are paid and items are returned to the owner. Most loans are for 30 to 90 days.

Shopping

Because of the nature of the business, the inventory of a pawn shop varies. Many pawn shops specialize in certain items. Premier Pawn specializes in firearms. However, they have a variety of items ranging from DVDs to luggage to electronics to power tools.

"Our prices are way below retail," Alex said.

The key to finding the item you want is to have patience and keep checking the pawn shops.