Pawnshop business heats up as economy freezes

 As the wallets of Valley residents continue to thin, many are heading to local pawnshops — hocking their power tools, jewelry and electronic devices — in hopes of securing a loan to make ends meet.

East Valley pawnshop managers said that they have seen a spike in their money-lending businesses as the U.S. economy continues to worsen.

Tammy Naylor, manager of Albert’s Chandler Pawn Center in Chandler, said in her 12 years in the pawn business, she’s never seen anything quite like it.

She said more women are coming in with family heirlooms — like rings and earrings — and more men are willing to part with their guns and power tools for a few weeks, looking for a quick financial fix to fill up their gas tanks or pay off bills.

“Looking at these items, you know people are hurting and hurting badly,” she said. “These are things that people typically hold on to, no matter the circumstance.”

Seeing these items, Naylor said, she doesn’t need government numbers to know how bad things are in the Valley economy.

But those numbers are in.

The government reported last week that U.S. employers cut 159,000 jobs in September, making it the ninth consecutive month of job losses.

With so many people now out of the work force, Albert’s and other pawnshops like Pawns Plus in Mesa have seen an influx of power tools.

Aaron Nelson, manager of Pawns Plus, said the appearance of power drills, power sanders and welders has doubled in the past six months.

At Albert’s, Naylor said, the shop now has so many tools that it has stopped pawning them altogether.

“As each day passes, we’re seeing more and more new faces looking to pawn items,” Naylor said. “We thought that the stimulus check might slow things a bit, but it hasn’t.”

By law, Arizona pawnshops hold onto customers’ pawned items for 90 days. Customers then have a chance to buy their property back on interest. The rates are 8 percent for the first month, 16 percent for 60 days, and 22 percent for the full 90 days.

Typically, Naylor said, customers come back in time to retrieve their items, before they are put on the shelf for retail. But recently, she said, fewer customers make it back. They need the cash.

“More people are willing to walk away,” said JoAnn Baldenegro, owner of The Pawn Man in Mesa.

Baldenegro said that on the lending end, her shop is doing well, up 30 percent. But the shop isn’t selling the items after the 90 days are up. So, she has had to find new creative ways to sell the items, such as using online auction Web sites like eBay.

Also, the clientele has changed, she said.

It isn’t rare for someone to drive up in an expensive car, looking to pawn jewelry just to pay a bill or two.

Carl Richardson, a retired pawnbroker with more than 25 years’ experience, puts in a few hours at The Pawn Man here and there. Over the last six months, he said, people have come in with all kinds of stories on how tight their budgets have gotten.

“Working in this business, you’re like a bartender, you hear it all,” he said. “Now, there isn’t just one kind of clientele you’re dealing with. It’s everybody.”