Mesa police, council discuss $3 pawn shop fee

JoAnn Baldenegro isn't pleased about the City Council's ongoing discussions with the police department that are likely to lead to a $3 transaction fee for every item bought or sold in Mesa pawn shops.

But Baldenegro, who owns The Pawn Man on Country Club and Sixth Street, also knows that there isn't much hope that the council will reconsider the idea.

At a meeting today, the council heard a proposal from the police department, which seeks the $3 transaction fee to be able to recover the cost to process paperwork related to monitoring transactions.

This documentation helps the department track stolen items, but is time-consuming and is estimated to cost $337,000 for this fiscal year, assistant police chief Mike Denney said.

A one-time $500 fee also is proposed to be charged initially to the shops to cover the cost of new equipment and software that will help automate the reporting process online.

The council also favors imposing the $3 fee on for-profit secondhand stores. Nonprofits such as Goodwill, which sell secondhand items but get them as donations, would be exempted from the fee.

But from Baldenegro's point of view, the city would be asking pawn shop owners to charge customers $3 for each transaction to process paperwork.

"I feel we're here to help our customers, and a lot of our customers come to us because they need money. This will only hurt them," Baldenegro said.

She added that the shops have a lot of repeat customers who pawn the same item and then buy it back. They would be especially hurt by this additional fee, because these items are already known not to be stolen, Baldenegro said.

Pawn shop industry representatives have expressed opposition to the transaction fee.

Pawn shops charge a $5 setup fee for every loan to handle paperwork and storing of merchandise.

The city is yet to define exactly what kind of secondhand items will fall into this net. There may be a minimum value set before an item would need to be recorded with the police.

Mesa is basing its proposed ordinance on a similar one already in use by Phoenix. Tempe, Chandler and Scottsdale also are considering a pawn shop transaction fee, according to a city report.

Denney and the council agreed on one thing, though, and wanted to make it clear.

"We do not want to be in the business of regulating a college kid selling a pair of jeans to buy a movie ticket," Denney said.

Councilman Scott Somers said after the meeting that the person selling three pairs of jeans to a used-goods store like Buffalo Exchange is not someone the city wants to target.

"We're looking at things that are typically stolen and sold, like electronics, computers and golf clubs," Somers said.

Denney added that it's up to the stores to charge a $3 fee to the customers or pay for it themselves.

By law, pawn shop operators must report each transaction for a police check. The number of items that go through a pawn shop has risen from about 72,000 in 2003 to 123,000 in 2007.

In a previous meeting, council members Somers and Dina Higgins had raised the idea that stolen goods don't necessarily only go the pawn shop route, but can also fall through the cracks at other outlets, so it may be unfair to only target pawn shops.

Secondhand dealers are not regulated by state law.

There are 19 pawn shops and 87 secondhand stores in Mesa.