Strapped for cash: The “Pawnshop Society”
Over the weekend, I was watching the G4 Network (I’ve already ‘fessed up to being a Ninja Warrior/Unbeatable Banzuke geek). But it wasn’t the programming that caught my interest. It was the commercials.
There were several new local ads for auctions, flea markets, and pawnshops. “WE’LL BUY YOUR GOLD AND BROKEN JEWELRY!” “Get cash quick!”
Have you noticed an increase in similar advertising? Are you using these services yourselves?
Apparently, it’s a growing trend–and as Mish’s Global Economic Trend Analysis puts its, “a telling sign of overconsumption.”
Here’s a piece about booming pawnshops in Philly.
And another on flea markets and Craigslist for-sale listings flourishing:
The for-sale listings on the online hub Craigslist come with plaintive notices, like the one from the teenager in Georgia who said her mother lost her job and pleaded, “Please buy anything you can to help out.”
Or the seller in Milwaukee who wrote in one post of needing to pay bills — and put a diamond engagement ring up for bids to do it.
Struggling with mounting debt and rising prices, faced with the toughest economic times since the early 1990s, Americans are selling prized possessions online and at flea markets at alarming rates.
To meet higher gas, food and prescription drug bills, they are selling off grandmother’s dishes and their own belongings. Some of the household purging has been extremely painful — families forced to part with heirlooms.
“This is not about downsizing. It’s about needing gas money,” said Nancy Baughman, founder of eBizAuctions, an online auction service she runs out of her garage in Raleigh, N.C. One former affluent customer is now unemployed and had to unload Hermes leather jackets and Versace jeans and silk shirts.
At Craigslist, which has become a kind of online flea market for the world, the number of for-sale listings has soared 70 percent since last July. In March, the number of listings more than doubled to almost 15 million from the year-ago period.
Craigslist CEO Jeff Buckmaster acknowledged the increasing popularity of selling all sort of items on the Web, but said the rate of growth is “moving above the usual trend line.” He said he was amazed at the desperate tone in some ads.
Moreover, consumer bankruptcies are up nearly 50 percent from last year.
Chickens coming home to roost, as they say.
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I love Unbeatable Banzuke and Ninja Warrior, but I can’t stand the commercials on G4…
You’re right about overconsumption. What do you expect from a culture that teaches instant gratification as the *only* means to happiness, and paints anyone who delays pleasure as a backward prude?
No, thank God.
I don’t use these services but before leaving school my professor was throwing out some old arcane books that I took for myself. I listed them on half.com and have made over $600.00. No kidding.
One man’s big screen t.v. is another man’s treasure. There are some pretty good deals at pawn shops. All this stuff that others are pawning off comes at a really good price.
So it’s a trend because…an editor told a reporter to write a story? Or could it be that these markets are coming into existence owing to the strength of America’s information networks?
Truly, Michelle. You need to get out of your neighborhood once and a while and start visiting some economically diverse urban areas. Pawn shops, check cashing stores and appliance rental shops are a way of life for many. Notwithstanding the societal judgments, fact is that these places exist and people use them.
hey if anyone needs to sell a 2008 ducati 848 superbike or a newer ford f250 crew cab diesel….i pay top dollar..and by top dollar i mean thousands less then you owe.
OMG!!! i’m a ninja warrior freak too!! i’ve downloaded all of the podcasts; the user submitted podcasts are great.
as for the commercials, since i TiVo them, i never catch them. i have, however seen those ‘gold for cash’ scam, and i have to wonder how stupid you are to send your gold to some faceless organization where they rook you for the value of your gold.
moving from DC to suburban NJ, i see a lot less check cashing spots. have you ever read the fees?? they take 3% of your money just to cash it. i don’t know how people live without bank accounts these days…and quite honestly, i don’t know how bad you have to screw up to not be able to open a bank account.
had i not had any moral fiber, this business model is a cash cow.
The videos on the link are “no longer available”.
In Hawaii everyone watches Korean soaps. Better than that sounds…and another station runs some Japanese game shows.
Japanese television is awesome. Especially Iron Chef. I used to DVR Takeshi’s Castle on Spike - a little more entertaining than Ninja Warrior. Just noticed Banzuke recently. Pretty awesome stuff.
Her last sentence hit the nail on the head big time.
It’s about time people learn to live within their means. This is what happens when you overextend. Should be a lesson there somewhere but those in the government are sure making it hard to learn.
Those ads are on in my neck of the woods quite often. The one I really like is sell your “OLD” gold. As if it is worth any less than the new gold. Guess they give them a LOT less for the old stuff. Let the seller be aware.
And if you need a payday loan……call me. I’ll ONLY charge you 40% interest. Im also very competitive on 30yr no-termination Adjustable Rate Mortages. 0% the first month and I will only raise your rate 1/8th of a percent every month thereafter.
lol, I almost feel ripped off just offering this to you.
The problem with this country is that our nation’s leaders have encouraged consumption over saving. National Savings (government and house-hold savings) is negative and has been for years. The only reason why there has been any investment in the US has been by foreign investors…and if they are ever given sufficient reason to pull out of the US, we are going to REALLY feel it.
Moreover since so much our debt is held by foreigners, it means we are going paying them back instead of reinvesting in the US…our standard of living for many of us ultimately has to go down.
(Only savings by corporations has been positive, but it can’t overcome the negative savings by house-holds and government for the longterm)
Instead of encouraging people to spend their rebate check, they should pay off bills and start SAVING.
Well, here in CA, panning for gold is the new thing. Apparently it’s out of control, and now the envirowhackos are concerned because these gold “miners” are trampling on their “pristine” Sierra Nevadas.
Having spent my last twenty years in the US in Nevada, I once noted with dismay that the number of pawnshops was roughly equal to the number of attorneys there. My sister managed one of them though and I always took care of the broken computers they took in and got an employee discount so I did personally benefit from it.
Still, I wondered at so many people walking out of the casinos and coming in to the pawnshops hawking watches and anything else they happened to have on them. One guy came in and wanted to hawk off a cheap pen. The manager told me to watch, gave him a dollar and we did … we watched him walk right back into the casino with his new found fortune.
It seems any more that most people want something for nothing and they will spend all of their money to get it.
Go figure huh?
We live in a society where we are barraged from the time we get up to when we go to bed, to “buy now” and “call today”. We are also told repeatedly that we have to have the “latest and the greatest”. With credit cards so easy to obtain, it’s no wonder that many people fall into the “instant gratification” trap, only to find themselves overextended. Managing money and budgeting is something very foreign to many people. It’s a “put off to the future concern” if I can have it today. How some people can rack up $30K+ in credit card debt is surprising to me. Suddenly that “future” comes and they are flat broke. Got to sell everything to just get by. The ultimate solution is easy. Declare bankruptcy and start over. Legalized stealing since they keep everything and the companies that loaned them the money lose out. Sad part about it is that, as soon as they go bankrupt, credit card companies start on them again, reasoning that they can only declare bankruptcy once every 7 years, making them a little safer bet than someone who never did declare bankruptcy. The cycle starts again.
#4
We are trying to teach our 13-year-old that the person who saves his money is the person positioned to take advantage of unexpected opportunities — like picking up “stuff” for a fraction of what it costs retail. Personally, I have rather fond memories of the early 90’s — bought our first house back then when the prices dropped to a range we could afford.
To quote the character George Bailey from It’s a Wonderfule Life: “Potter isn’t selling! Potter’s buying!”
I moved into Pasco County, FL in 2004 and was struck by the sheer number of Pawn Shops and Bail Bondsmen. I was told it was a sign of a poor, crime filled area. Thanks for warning me after I bought two acres…
I can only speak for myself and don’t pretend to represent any trend but we’ve been using Craigslist and Ebay quite a bit to make ends meet lately. I can’t imagine ever selling to a pawnshop again. Ebay’s middleman role derives its profit by devaluing then marking up rather than simply making a percentage of the market driven sell price.
Correction on my previous post…”Pawn shop’s middleman role derives its profit from devaluation of the product, NOT Ebay.” That’s what I get for posting before coffee.
I apologize in advance for not having my source readily at hand, but…
Most definitions of saving don’t include long-term assets. For many American families, the majority of assets are held as home equity. So people are saving, but not in an asset class economists measure.
NINJA WARRIOR FTW!
OK, now that all of that is out of my system…
I’ve used craigslist to buy and sell various small items. It’s convenient, its easy, and i sell stuff that almost exclusively is bought by people locally. i sold an old car I have yesterday on there, as a matter of fact. As far as I’m concerned, its fast and easy, which makes my day a little easier.
Schools need to put Dave Ramseys books on their required reading list. We buy “toys” occasionally, too. But our bills are paid first.
The fact remains, however, that a fool and his/her money are soon parted.
I’ve sold old game books I don’t use at half priced books, and pick up old nicknacks and books via half and e-bay.
Right now I’m in the process of getting rid of old comic books, and it’s a matter of room as much as cash. *shrug* It’s almost an underground economy.
Are we using pawn shop services?
Only to BUY things at bargain prices. We had been saving for over a year to buy a cargo trailer. We got one for a steal at a pawn shop.
Not sure this is a trend. When I was in Balitmore I lived less than a half mile from at least 5 pawn shops, and being in urban areas of significant poverty for the last 10 years I can tell you that they been thriving for years before the “economic crisis.” What you’re likely seeing now is that they’re doing a better job of targeting their advertisements. Given that the G4 network has a lot of people who play video games and if you look in any new urban shopping center with a high level of poverty you’re bound to see a Game Stop store, it’s not shocking that they’d advertise on that network.
Besides it’s not like pawn shops are advertising on American Idol. this is G4 we’re talking about, the local ad rates aren’t going to be that high.
In terms of the Inquirer article, it goes against every standard metric that we’re seeing in Philadelphia right now. This is on e of the few cities that hasn’t been hit by the sub-prime mortgage problem too badly. An interview with one pawn shop owner in a wealthy area of town (gee, you think that my be why his clients are middle class?) and two interviews with patrons does not make a trend. The article oozes with liberal humanism, but never cites any metrics other than the ambigious rising gas and food. Yeesh.
“Borrow. Spend. Repeat.” Sounds like a description of the Bush administration. Doesn’t anyone in Washington believe in balanced budgets anymore?
Many years ago I discovered I could go to pawn shops and by gold. I has been very lucrative for me
What’s the big deal? Pawn broking has been around since commerce exists. It’s basically offering something as collateral in exchange for a loan, and the simplicity with which it can be done is one of its advantages. I don’t see what there is to dislike about that, it just another aspect of a financial system.
Or would you rather make everything as bureaucratic as possible, rather than “Sir, this watch is worth 200 dollars - that means that you can have a 200 dollar loan. You don’t pay it back in time, we keep the watch. Are we agreed? Then sign here and here are your 200 bucks”. What is there to dislike about such a system? Personally I’ve never used a pawn shop but if I needed a smallish amount of cash to I would be glad to have the option of using one, rather than having to go visit the bank manager or ask friends or family.
To Antaradus in #29:
I think the point of this post is less about trashing the pawn shop industry, and more about the apparently endemic financial irresponsibility that’s lead to the recent “subprime crisis” and the Bear Stearns debacle.
I’m a Ninja Warrior addict too, Michelle.
I love buying used CDs and visiting thrift stores. My mother loves garage sales and I’ve gone with her to these sales since I was a little kid.
I’ve been doing those things for years. In my case, it has nothing to do with the current economic situation. I just like to find good deals and rare items.
My husband and I have always gone to flea markets, rummage sales, and auctions where we spend CASH for things we find. In fact I ran a huge once-yearly parish rummage sale at our church for several years. We did a gigantic business. This is a regular part of the economy.
Doesn’t anybody see the other side of the coin? It’s not just people who are willing to sell ’cause they need money — it’s also people who have READY CASH to pay. Plug that into the equation.
My husband mostly looks for tools and things for his hobby auto and machine shop. He sees plenty of people with plenty of cash to fork over. Other than high gas prices and food going higher, we’re just not seeing a big bad hit on people’s pocketbooks in this cash-on-the-barrelhead economy that very few bean counters bother to notice and which is thriving right under the noses of all the smart economists.
I don’t know, but I just don’t think that an increase of people listing things to sell is a portent of doom. They will find their match in cash buyers as the economy rights itself. That is if (Lord save us) the government doesn’t start regulating this aspect of our lives too.
I’d be willing to bet that in many cases it’s a vanity thing. . .folks who refuse to part with their prize lifted F-250 or Suburban in favor of something that gets reasonable mileage. Of course, some people do have it legitimately rough, to be sure. That’s nothing new either though.
I just remembered hearing a few years back about people who make their living buying and selling things on Ebay.
While I wouldn’t have believed it normally, my dad actually spent a lot of time on Ebay while he was out of work for 2 years. He didn’t make enough to make a living, he was able to turn products around and sometimes make a few hundred dollars a week. Again, not enough to make a living, but it’s a nice supplemental income, or a nice way to make a few extra bucks while out of work.
So I agree with everyone who says that this is sort of an underground economy in our country.
Economist- one who makes a living by telling us how, in our market- and service-driven economy, we need to continuously buy things.
“Genius economist” is therefore, an oxymoron.
We had a yard sale recently, primarily to reduce clutter but partially to finance our summer vacation. We did pretty well because we participated in a neighborhood-wide sale. We’ll enjoy our trip a lot more because it will be paid for before we leave.
We practice a simple philosophy:
I buy most of my clothes at the thrift stores for pennies on the dollar. Bought my 30MPG Nissan ten years old at a fair price (then donated my 20 year old 26MPG Toyota to charity).
Nuthin’ wrong with that!
8^)