Today’s Shops No Longer Mere Pawns in Retail Game

For Rosemary De Yoe, Christmas couldn’t have come at a worse time this year.

Just three months ago, De Yoe became the victim of corporate downsizing. Without a job, the Moorpark mother of two still had to get gifts for her sister, her mother, her boyfriend and, most importantly, her two kids. That job became just that much harder when 14-year-old Anthony asked for an electric guitar.

But last week, De Yoe--who says as a single mom she has to be resourceful even when she has a job--braved the metal gate at Loans R Us in Thousand Oaks and got lucky.

In her first ever visit to a pawnshop, she found a reasonably priced guitar. After a bit of friendly bargaining, store owner Todd Arron threw in an amplifier, a guitar pedal and a strap, all for the same price.

“It’s going to make one teenager very happy,” De Yoe said.

While holiday shopping at pawnshops is something not many people are comfortable with, pawnbrokers across the county say their business definitely increases this time of the year.

Sales are up 25% to 30% this month, said Larry Kelmanson, owner of the Pawn Shop of Ventura. At Olde Towne Jewelry and Loan in Ventura, a store manager said business sometimes can double during the holidays, but this year has been slow. And at Loans R Us, Arron said he expects half of the store’s merchandise will be gone by Christmas Day.

Those who get past the metal gates of some shops, the neon “cash loans” signs of others and the stigma many attach to “collateral lenders”--as some pawnbrokers prefer to be called--often walk out with good deals.

Some shops specialize in jewelry or guns. Others emphasize consumer electronics or tools. Some have an eclectic mix of items that includes toys, sports equipment, musical instruments, cameras, tools, antiques and other collectibles.

Last week, business was brisk at many of the county’s pawnbrokers.

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Sitting on the floor of the Pawn Shop of Ventura, Cheryl Mackey picked wrench sockets from a metal shelf one by one, a Christmas gift for a friend who had his tools stolen. She walked out with 36 sockets for $26. The Ventura computer consultant said she would come back later to look for compact disks for her 9-year-old daughter.

At Loans R Us, a young man from Simi Valley was shopping for a watch for his girlfriend. The shelves around him were packed with everything from television sets, lawn mowers, autographed posters of celebrities, fishing rods, old pocket watches and a bunch of collectibles, like a mechanical doll, draped in a red-and-white Christmas gown, that Arron said he won’t part with.

“People don’t know what they’re getting until they come in,” Arron said, adding that his customers include movie people from Los Angeles who come looking for something unique.

Something else people don’t know, many pawnbrokers say, is what their business is about.

Pawnbrokers are primarily moneylenders who give out cash loans against some kind of collateral--an object of a certain value that determines the amount of the loan. If the goods go unredeemed after four months plus a 10-day grace period, the pawnbroker is allowed to sell them.

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Pawnbrokers deal mainly in small amounts. The average loan is around $50. The customers are people who could not, for a number of reasons, get a loan from the bank.

John P. Caskey, a professor of economics at Swarthmore College, who in 1989 conducted the largest nationwide study of pawnshops while a visiting scholar at the Federal Reserve Bank of Kansas City, called them “banks for the little man.” And, maybe adding to their shady reputation, pawnbrokers have often set up shop in low-income neighborhoods shunned by banks.

“We are problem solvers and we are kind of proud of it,” said Dennis Hooker, president of the Collateral Loan and Secondhand Dealers Assn., an industry group with about 400 members in California. “People need $50 right now to deal with the car that has been towed away or to pay their utility bill. The banks can’t cope with this kind of problem.”

Something else most people don’t know about pawnshops is that they are highly regulated, both in terms of the interest they can charge and the reporting requirements for the merchandise that passes through them. Every item is reported to the police along with the customer’s identity, address and thumbprint.

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That means, contrary to what many believe, that hardly any of the merchandise at pawnshops is stolen--less than 1%, according to Ventura Police Department Cpl. John Leach, who as an investigator of property crimes deals with many of the county’s pawnshops.

“They are very reputable businesses,” Leach said. Over the last few years, the industry has united and attempted to clean up its tarnished image, Leach said.

“I’ve noticed a real change,” Leach said. “In our county, the pawnshops are all in good neighborhoods, and we have no problems with them.”

But the brighter image pawnbrokers have been trying to promote has been slow in reaching the general public.

When she began calling pawnshops, De Yoe said she didn’t know what she was getting into.

“I got some gruff people on the phone,” she said. But when she finally walked into Loans R Us, she was pleasantly surprised.

“It’s just like going into any store,” she said. “You have to know what the going price for what you want is. And you have to know how to bargain.”

Pawnbrokers admit that because of their tarnished image, many of the people that are comfortable shopping there are their own past customers who first came to them in time of need.

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“The people who pawn with us today are our customers tomorrow,” said Hooker, whose three San Francisco Bay Area stores advertise to Christmas shoppers.

“I love to see someone get out of a cycle of having had to struggle,” Arron said. “Then they come back as customers.”

Mike Weisbecker is one return customer who came to Arron’s shop because of the holidays. The 19-year-old Kinko’s salesman came to get extra cash for his Christmas shopping needs and because he wanted to unload a gold chain.

Weisbecker said he pawned the chain before for $150 and retrieved it just two weeks ago for an additional $25. This time he was looking to sell it.

But Arron, who says his main business is lending, not buying and selling, persuaded him to pawn it again. This time however, he gave Weisbecker $185 for the chain--a courtesy to a repeat customer.

“That helps me a lot, man,” Weisbecker said.

“I know he likes that chain,” Arron said. “I could have bought it. But it wouldn’t have felt right. He’s a customer, and I want repeat customers. I want people who are happy to come in here.”

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With the $185 in his pocket, Weisbecker was happy. He turned around and began browsing in hopes of fulfilling his Christmas shopping needs--gifts for his parents and his two brothers.

That old watch in the glass cabinet is pretty cool, he said. Almost what he wanted. But not quite, he added as he walked out of the store.