As retailers like Tiffany & Co., Saks Inc., Best Buy Co. and Wal-Mart Stores Inc. vie for last-minute holiday sales, customers are being drawn away by a growing crop of competitors: pawn shops.
From Las Vegas and Los Angeles to Miami andOrlando, pawn shops appear to have shed their stigma and become a holiday-shopping destination.
“It’s crazy. Our stores are just packed right now,” said Lawrence Kahlden, chief executive of La Familia Pawn and Jewelry, which has two stores in Miami, one in West Palm Beach, 12 in Orlando and nine in Puerto Rico.
Overall, sales are up 40 percent from last year, he said, with smartphones, laptops, flatscreen TVs and jewelry ranking as top sellers. The Miami store at 1823 NW 79th St. is the company’s No. 1 store.
“The acceptance of pawn shops has increased due to the reality shows on TV,” Kahlden said. “It has become more acceptable to come into a pawn shop — you’re curious to see what kind of deals you can get.”
Holiday season traffic is also up at publicly traded Cash America, which has 800 stores in 23 states, including 75 in Florida and a half-dozen in South Florida.
“We have a broad spectrum of customers that come in for the holidays,” said Dennis Weese, chief operating officer of Cash America.
No longer are such outlets focused solely on lending to low-income consumers in downscale neighborhoods. Many pawn shops are expanding in more-affluent areas and increasingly are seeing white-collar and higher-income shoppers — who not only may borrow money, but also buy new or used jewelry, luxury watches, game consoles and electronics, often at deep discounts compared with regular-priced retail merchandise.
“The new customers are coming from all segments of the population. What’s central to all of them is getting a good deal,” Weese added. “The consumer is very value-oriented today regardless of socioeconomic status. They put us in the consideration set the past three or four years. The stigma associated with used merchandise has gone away.”
To better compete with mainstream retailers, Cash America has its own holiday-layaway program and stages its own annual customer-appreciation event on the first Friday of December, which Weese said “gets bigger every year.” Demand for that day serves as a good indicator of its sales for the month.
Pawn shops traditionally have been seen as a last-resort source of financing for those barely making ends meet (or worse) in the U.S. economy. Yet the recession stemming from the housing bust and the financial crisis of 2008 led many middle- and upper middle-class shoppers to visit pawn shops for the first time, mainly to seek financing. That’s how they discover there are good deals to be had there, according to pawn-shop operators. Meanwhile, shows such as History Channel’s Pawn Stars have helped lower the negative impression that consumers may have about shopping at such stores.
The National Pawnbrokers Association estimated there were about 10,000 pawn shops in January, up from about 6,400 in 2007, when the most recent U.S. Census data were available. As evidence of their broadening acceptance, many of the new pawn shops are being opened in more-upscale neighborhoods across the country, the trade group’s spokesman Emmett Murphy said.