Business

Your Loss is Our Gain: Pawn Shops Thrive in Recession

Unemployment numbers are high, gas prices are up and everyone feels strapped for cash. However, despite the recession, there are some corners of the market that are doing well.

According to the Associated Press:

“Profits at pawn shop operator Ezcorp Inc. have risen by an average 46 percent annually for five years. The stock has doubled from a year ago, to about $38. Several market analysts predict that it will continue to grow at a rapid pace.”

Why?

Simple: with the jobless rate hitting 9.2 percent, the unemployed are broke and desperate. They are willing to seek help from cash advance stores, thrift stores and they will lease instead of purchasing.

According to The Associated Press, stock in payday lender Advance America Cash Advance Centers has doubled from a year ago, to just under $8. Their rival, Cash America International Inc., is also having a good year. Their stock rose by 64 percent, to $58.

Encore Capital Group, a debt collector that deals with people with unpaid credit cards bills and other debts, rose nearly 50 percent last year.

Additionally, Stock in Rent-A-Center, which leases televisions, couches, computers and more, is up 57 percent from a year ago to nearly $32.

Although it may seem vulgar for a business to prosper from desperation, it is nevertheless a lucrative market. But they should be careful; their prosperity may be short-lived.
Your Loss is Our Gain: Pawn Shops Thrive in Recession

Connsumer spending, adjusted for inflation, has fallen for two months in a row — the first back-to-back fall since November 2009. On Friday, the government reported the unemployment rate rose to 9.2 percent in June, sending stocks into a tailspin. On top of that, one in seven Americans now live below the poverty line, a 17-year high.

Pawn shops, thrift stores and leasing centers have constructed a business model that capitalizes from unprofitable times. But they have to recognize that they are working with limited resources. If things continue the way are now, there will come a time when the desperate have nothing left to pawn and will instead have to choose between leasing a couch or buying groceries.

(The Associated Press contributed to this report)

Comments (31)

  • Bernard
    Posted on July 12, 2011 at 3:38pm

    Second comment:

    I have painful memories of US pawn shops. When we arrived to the US in 71, my dad, a Medical Doctor got a job at a hospital. But my nation of origin put a limit of the amount of dollars one can take out. My dad started his job at the beginning of the month and salaries being paid at the end of the month, we soon ran out of money.
    Before we left a thankful jeweler who my dad treated, handed him three enormous blue star Sapphires. In desperation to put food on the table he took these Sapphires to a local pawn shop. I still remember as a boy protesting, begging, pleading with my dad not to do so, claiming that we can manage till the end of the month if we just found some manner to feed ourselves. He refused to listen to me and sold all three Sapphires for 600 dollars.
    Recently I returned to my land of birth and met with some jewelers who once they heard this story told me that each of those Sapphires would now fetch a price of over one hundred thousand dollars each. I went through many jewelry shops and never found any blue star Sapphires of that size or even close to that size. Most were about the size of a finger nail and the prices was outrageous.

    Report Post »  
  • Bernard
    Posted on July 12, 2011 at 3:26pm

    “On top of that, one in seven Americans now live below the poverty line, a 17-year high” This is unsustainable and the real numbers of those unemployed is closer to 17% than this 9.2 percent. As for me I see that every indicator shows that Obama is systematically taking this nation down in every manner possible.
    There will be a backlash of the kind not seen in this nation since Obama still has over a year before elections. That is a long time for him to push his policies that he knows will only worsen an already bad situation. Impeach the man, Get rid of him before he has a chance to deadly stab this nation once and for all before he exits his position. That means the worst is still to come..

    Report Post »  
  • Southernguy
    Posted on July 12, 2011 at 8:20am

    I hate pawn shops. They don’t pay much for an item, then try and sell it at retail prices. Who wants a used item, when you can buy it brand new for the same price, lol

    Report Post » Southernguy  
  • bobbyj1
    Posted on July 12, 2011 at 7:37am

    TBL10 – Yes, exactly. Illegals and blacks.

    Report Post »  
  • tbl10
    Posted on July 11, 2011 at 6:18pm

    They forgot to add the fact that while us hard working Americans are at work, the illegals break into our homes and sheds and steal are stuff and sell it to the pawn shops. Then us hard working Americans have to rebuy our stuff that was stolen. Cycle just repeats, cops are useless, they just come out and fill out the police report and tell you to have a nice day. Who says crime doesn’t pay.

    Report Post »  
  • Sound The Trumpet In Zion
    Posted on July 11, 2011 at 5:31pm

    This will be short-lived only if we are able to get obama and his goons out of office right NOW!!!

    Report Post » Sound The Trumpet In Zion  
  • banjarmon
    Posted on July 11, 2011 at 4:58pm

    BO is the BIGGEST pawn broker of them ALL…selling off America Cheap to china.

    Report Post » banjarmon  
    • saranda
      Posted on July 12, 2011 at 11:37am

      What an ill informed opinion this is. Every president since Nixon has contributed to the process of selling America off, and Reagan probably was most responsible by chasing jobs offshore.

      Report Post »  
  • Rational Man
    Posted on July 11, 2011 at 4:37pm

    Pawn shop people are vultures taking advantage of folks in a bind. They pay nothing for your stuff and turn around and sell it for new retail value to someone who doesn’t know any better.
    Just watch ‘Pawn Stars’ on TV and you’ll see what I mean. And they aren’t as bad as some who lie about things like whether or not a gold watch is solid or plated gold…..I know from personal experience! One guy tried to sell me a pocket watch for 1,000.00 as solid gold. When I showed him the markings inside the case that proved it was plated, he flipped on me and all but ran me out of the shop. The watch was worth about 100.00, and he probably paid 50.00 for it.

    Use Craig’s List. It’s free and your stuff gets alot of exposure. And you set the price!
    Ebay and combined Paypal fees amount to about 12 or 13%. If you play the game right, (like setting reasonable starting bids and buy it now), you can do much better than a pawn shop.

    Report Post » Rational Man  
  • Silat
    Posted on July 11, 2011 at 4:27pm

    Why be a pawn when you can be the POTUS? “Let them eat cake!”

    Report Post »  
  • fireyogi
    Posted on July 11, 2011 at 4:25pm

    Those pawn shops are also for robbers to sale their stolen items. Pawn shop owner don’t care as long as they make money. Legal fencing operations for the robbers.

    Report Post »  
  • Viking64
    Posted on July 11, 2011 at 4:11pm

    I think Pawn shops are like most other business’s, sometimes a business does better in hard times, generally they don’t, but if they help people during hard times, I say more power to them.
    Obama is a Pawn Dealer’s dream, a out of control spender on a massive scale, will always cause total chaos all the way to the bitter end. People start now to buy guns ,ammo, food, supplies and get prepared !

    Report Post »  
  • Grapesofwrath
    Posted on July 11, 2011 at 3:52pm

    Good thing Obama “Pawned America” to China

    Report Post »  
  • Anonymous T. Irrelevant
    Posted on July 11, 2011 at 3:41pm

    Yes, so I’ve noticed. And people actually sit and watch other people sell their junk to pawn shops, on tv.

    Report Post » Anonymous T. Irrelevant  
  • BenInNY
    Posted on July 11, 2011 at 3:40pm

    Wonder how much of the stats can be attributed to the show Pawn Stars reminding people that these shops exist.

    Report Post » BenInNY  
  • BIGJAYINPA
    Posted on July 11, 2011 at 3:39pm

    We must free ourselves now. This insult to America must be removed from office immediately. He is truly an enemy of our Constitution and our country. Our armed forces would do well to remember the oath they took when they enlisted….Just sayin’

    Report Post » BIGJAYINPA  
  • Eric_The_Red_State
    Posted on July 11, 2011 at 3:33pm

    Just wait until the housing market crashes (again)
    We are at the beginning of the crash of a lifetime.
    The dollar is about to tank –
    Housing is about to tank –
    Entitlements are about to tank –
    Government owns 97% of the mortgages –
    and it’s broke.

    Hold on to your crackers – it’s going to be a bumpy ride.

    Screw gold – buy food and ammo.

    Report Post » Eric_The_Red_State  
    • docmd
      Posted on July 11, 2011 at 3:47pm

      Yes buy food and ammo . That is one thing about America that most households have guns . If we are ever attacked we can defend ourselves unlike other countries like the UK. In the UK the Govt. has taken away their guns and citizens can no longer defend themselves. They will be under sharia law soon !

      Report Post »  
  • jakartaman
    Posted on July 11, 2011 at 3:30pm

    Well – The Obama depression is only going to get worse – He is going to try and double down on more spending to “stimulate ” the economy. Unfortunately being a Socialist he firmly believes the Government is the solution!
    GOD help us!
    Can 2012 come fast enough

    Report Post »  
    • JRook
      Posted on July 11, 2011 at 3:39pm

      @jakartaman Please check any reliable graph of the economic indicators. The severe recession began and depended under Bush. While they have not returned to pre Bush levels, the same economic indicators are moving in the right direction. Perhaps it would be better if not saddled with the Bush wars, Bush tax cuts in the face of higher spending. But hey don’t let the facts get in the way…never bothers Rush.

      Report Post »  
    • IAMMADDOG
      Posted on July 11, 2011 at 3:48pm

      The Bush tax cuts helped our economy. The “Bush wars were all OK’d by the dems (there is video footage to prove it. We need Obama to stop the friggin spending…pure and simple. The govenment would get wayyyyy more tax revenue if he let us keep our money and spend it ourselves. Some questions for you..How would letting the Bush tax cuts expire create jobs? How would raising ANY tax create jobs?

      Report Post »  
    • Blackhawk1
      Posted on July 11, 2011 at 4:25pm

      JRook

      I notice how you didn‘t mention Obama’s failed stimulus, Obama’s Libya War, Obama continuous money flow into Fannie Mae, and Freddie Mac, how about the 1.65 Trillion in deficit spending this year, or the 4.3 Trillion in debt that the Democrats managed to rack up since they gained power in congress and the Whitehouse.

      Time to get over the Bush Derangement Syndrome, We the People are not buying it!

      Report Post » Blackhawk1  
    • cessna152
      Posted on July 11, 2011 at 4:57pm

      @rook,

      I am not a defender of Bush, but for 7 years of his presidency there was low unemployment, plenty of jobs and a strong economy. I really don’t care about the “R” and “D”… all I care about is “am I better off than I was 4 years ago”? Am I “freer now than 25 years ago”? The answer, a resounding “NO”! Obama is a Marxist and UnAmerican… he supports our enemies and hates our friends. He attacks honest, hard working citizens and the government has went from “semi trustworthy” to “Mafia” in several short years. No system is perfect and as more people call for government to solve these problems, our founders would call for government to STOP getting involved with problems.Seriously, what government has resolved problems? Silly regulations, saddled with debt, spending our money uncontrollably! This is no different than what Bernie Madoff did… the government is stealing TRILLIONS upon TRILLIONS of dollars and it has been going on for quite a long time. Americans are saying “enough”!
      So, please tell me what the 40% FORCED out of you pay is getting you? Constitutionally the FEDERAL gov’t is to lay taxes for a Post office, roads, some regulating and defense… that is it. The free market can and WILL take care of the rest. That is MY money, I earned it! To have $40,000 of my hard earned money going to radical,lazy morons makes me sick

      Like i said, get off the “R” vs ‘D”.it is principal vs corruption. Right now corruption has “the pedal to the med

      Report Post » cessna152  
    • JRook
      Posted on July 11, 2011 at 5:07pm

      @Blackhawk1 So you are ok with the $10 trillion in debt racked up under Reagan, Bush Sr. and Bush Jr. And don’t give me the congress was at fault line. If any of these Presidents were serious about balancing the budget they could easily veto the budget. Both sides spend. We spend as much on defense as the rest of the world combined. How’s about you get over the government is the problem derangement and begin to see how the federal spending is an ATM by military contractors, hospitals, physicians, big pharma, infrastructure contractors, etc. We have the best politicians money can buy on both sides of the isle. You think Haliburton getting paid $10,000 for empty trucks on convoys in Iraq is representative of a good corporate citizen. If we talked we would probably agree on a number of problems, but clearly disagree on the real cause. There are a lot of executives and bankers who have gotten very wealthy off of excessive government spending over the past 30 years. Time for them to pay some of it back. Because clearly our children and grandchildren should not cover it.

      Report Post »  
    • JRook
      Posted on July 11, 2011 at 5:20pm

      @cessna152 I agree 100%, but let’s keep in mind we have the best politicians money can buy. Who do you think got the majority of the $14 trillion in excessive spending over the past 30 years. Not the welfare moms and not the kids on Medicaid. A large amount of Medicaid is actually spent on nursing home care, too often for individuals who shift their assets to their kids so you and i can pay the bill. Military contractors, infrastructure contractors, hospitals, physicians and government service providers through privatization that turns out to cost more in the long run (AZ prisons). Hey I’m for balancing the current budget and making those who benefited most from the $14 trillion pay it back through anything you want to call it, earmarked towards the long term deficit. But I am not in favor of making our children or grandchildren foot pay the bill either directly or indirectly. As far as corruption let’s start with the black market economy and individuals who cheat the system through off the books cash receipts and payments that lower their taxes. I have been fortunate in business and therefor paid more in taxes then I will ever get back in SS, Medicare or government services. But it is time to fault all leaders, not just those in government for our economic situation.

      Report Post »  
    • let us prey
      Posted on July 11, 2011 at 5:31pm

      @jrook
      You didnt answer the obumma questions:
      Failed stimulus, Libya War, continuous money flow into Fannie Mae, and Freddie Mac, 1.65 Trillion in deficit spending this year, or the 4.3 Trillion in debt that the Democrats managed to rack up.

      Report Post » let us prey  
    • JRook
      Posted on July 11, 2011 at 5:49pm

      @let us prey Yea I did you just are filtering the answer based on some ideology or unsubstantiated belief regarding who is at fault and who is benefiting. To say that the last $1 of the deficit is somehow worse or more deserving of our contempt than the first $1 is convenient perhaps but untrue. Again, who really benefits from continuing the deficit levels left by Bush and continued under Obama. Please try and avoid labeling me as a D or an R, a L, P or C. You would be wrong in all cases. I don’t constrain my analysis of an issue based on some ideological filter. Time to balance the budget which can only be done by cutting everything proportionately, including Defense. Time to get out of our “war of the month” industry and invest in the US. Time to get the government out of our lives as much as possible, all of our lives which means no imposed morality or convenient interpretations of the constitution. Time to stop social engineering based on religious beliefs. Time to simplify the tax code, eliminate corporate tax breaks and severely punish those who cheat. Time bring back the concept of citizenship for individuals and corporations. Just to name a few.

      Report Post »  
    • let us prey
      Posted on July 11, 2011 at 6:04pm

      @jrook
      We have been behind the 8 ball for so long it is hard to tell where it began. The world police job is too expensive and we should wall off our country and let them all fight it out. I am not filtering, I reject them all because they cannot be trusted. We have been shafted for so long, and this baby dictator is double tapping us right now. Never in my life time have I seen someone so aginst this country. It is positively disgusting that he renames all his ideas and the sheep follow him[ex: kinetic military action,shared sacrifice etc]. If the country does not realize this before 2012, it will be too late. IMO

      Report Post » let us prey  
  • JRook
    Posted on July 11, 2011 at 3:21pm

    How insightful

    Report Post »  
    • CatB
      Posted on July 11, 2011 at 5:42pm

      How much of this “BUSINESS” is fenced goods stolen from TAXPAYING Citizens and businesses .. seems daily we hear about another break-in or home invasion or job site stolen from.

      Report Post »  
    • Mike N
      Posted on July 11, 2011 at 6:03pm

      While you make a few cogent arguments, you’re just far enough off of the point to miss the core issue.
      Federal government is too many administrative levels from where the dollars actually do the most good, and therefore is inherently inefficient, ineffective and wasteful.

      With few exceptions, the only reason Washington is relied upon to provide so many services is because state and municipal governments of whom funding was previously requested were smart enough to refuse funding, either for a lack of merit, or because of the knowledge that the Washington gravy train would do it for them.

      Our federal government was formed to serve TWO purposes only . . . (1) to provide for the common defense and (2) to resolve disputes between the states. Had that not changed so radically over that past centuries, we would all likely be less dependent on our bloated central government, have stronger local participation, and be better for it.

      Socialism, communism, totalitarianism, progressivism, whatever you wish to call it . . . be damned. If you believe it works well, you are no less naive than the idealists that the SCROTUS consults with. Their plan is outed, and it’s time to find some other location for that grand experiment, because the masses are awakened, and the USA will pull itself back from the brink.

      Report Post »  

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