Heavy Traffic on Boulevard of Broken Dreams : Battered Middle Class Flocks to Pawnshops

Clutching a yellow-and-black Mom’s Taxi key chain, Pam Wright shoved the Super Nintendo set across the counter and plunked her thumbprint on the contract. The 37-year-old unemployed mother of three then collected her $35.

As Wright slid away, a woman with two daughters offered two Nintendo game cartridges, telling the man behind the counter that she needed $30 to send her son to camp. He smiled and said OK.

Meanwhile, a middle-aged man sold a leather jacket that no longer fit, a woman laden with gem-studded rings perused the jewelry cases in search of a gold watch and a nurse’s aide turned over $100 for three gold chains and a ring she borrowed against after being laid off earlier this year.

“It’s convenient for quick cash. They take just about anything,” said Wright, whose visit to Anaheim’s Hock It to Doc pawnshop this week was her third since being laid off six months ago.

“It’s a last resort,” she said, pocketing the $35 she would stretch to cook dinner for her kids over three nights. “I’m not happy about it, but I’m content.”

Pawnbrokers say they have seen hundreds of new customers like Wright recently, as people borrow against their possessions to wait out the recession.

There are more than 600 pawnshops across the state, about 30 in Orange County, and their image and clientele are changing, said Dennis Hooker, president of the California Pawnbrokers’ Assn.

Once perceived as sleazy places with sleazier customers, pawnshops are capitalizing on the sluggish economy by offering bargains on used goods as well as being an easy source of instant cash.

“We are now getting middle-class people at the end of their rope,” said Blossom Torres, owner of Butch’s Jewelry & Loan in Placentia. “We’re hitting people that I have to explain how pawns work.”

A pawn is basically a loan, no questions asked, against goods, the most common of which in Orange County are jewelry, guns, tools and electronic equipment, pawnbrokers say. They typically offer about 10% of an item’s value and charge more than 10% interest to hold the item for four months. All loan terms are state regulated, and each transaction is reported to a police department, which checks for stolen goods.

Customers can roll over their loans when they expire, but if they default the items become the property of the pawnshop. Then they are sold for two or three times the loan amount, still significantly under retail price most of the time.

Although the interest rates are high, pawnshops are attractive because they process small loans quickly without regard for prior credit history, as long as the customer is over 18 and has photo identification.

“When we first started, we were serving strictly the blue-collar worker who couldn’t make it to the next paycheck,” said Paul (Doc) Kilgore, a retired dentist who opened Hock It to Doc seven years ago. Now the store serves “anybody from a stockbroker to a car dealer to a construction worker,” said Rex Kilgore, Doc’s son and co-owner of the shop.

Several pawnbrokers said customers have included small-business owners who borrow against gun collections, television sets or computer equipment to meet their payroll. They have regular customers in construction workers who put their tools in hock whenever they are out of work. In between there are senior citizens, single parents and young people just starting out who simply find themselves short of cash when the bills come due.

“I see this place as the local bank--instant cash,” said Liz Young, who opened a pawnshop at the corner of Newport Boulevard and Bay Street in Costa Mesa 18 months ago. “They just need a loan for a few days. It’s not a big loan, just $20 to $25 to buy Pampers or milk or cigarettes--or maybe pay the rent.”

Gino Arriola, manager of a Newport Beach pawnshop where a Lamborghini sports car and Bayliner boat were among the recent pawns, said he sees people “from all walks of life” in his store, which opened about two years ago, when the recession began.

“I get the big-buck people, and then I get the people who are really hurting,” Arriola said, recalling a well-dressed business owner with a Rolex watch who recently drove up in a Lincoln Town Car and hocked his golf clubs. “A lot of people come in with sunglasses, they’re so embarrassed. They don’t say a word.”

For Doc Kilgore, the recession has brought expansion. Loans have increased by about a third, and sales have remained steady, he said.

In addition, defaults are down from about 15% in previous years to 8% in 1992, a change Kilgore attributes to his new middle-class clientele.

But at Butch’s Jewelry & Loan, both loans and default rates have skyrocketed, Torres said. Only about half the merchandise is claimed on time these days, compared to 90% before the recession, she said.

“It’s a two-way street. We suffer right along with them,” said Hooker, president of the pawnbrokers’ association. “If that person’s unemployed and is never going to pick it up, the pawnshop is going to have to eat it.”

Orange County pawnbrokers say they are proud to help people in a pinch. Although many of their customers are depressed and financially desperate, the ones who get a job and return to redeem their wares and maybe buy something else make it all worthwhile, they said.

“You have to be humanitarian with people,” said Arriola, standing in his well-organized shop, where a poster captioned “Boulevard of Broken Dreams” overlooks an inventory of rifles, fancy jewelry, cellular phones and wet suits. “Every night I go home and I think, ‘Yeah, I helped a lot of people.’ ”