State pawn shops see rising business-WEB ONLY

The nation’s deepening recession has boosted business at Indiana’s pawn shops as people shed possessions – particularly electronics – for cash to pay bills.

At Ace Pawn Shop in Bloomington, manager Chris Banul said business is up and he’s seeing more high-end items brought to the shop for collateral, or sold outright, as the economy has worsened.

“We’re seeing a lot of expensive video game systems … and a lot of [flat-screen televisions],” Banul said.

Cash America, the nation’s biggest pawn-broking conglomerate, with 613 stores, topped $1 billion in revenues for the first time in its 25-year history last year.

And Greg Engstrom, president of the Indiana Pawnbrokers Association and owner of stores in northwestern Indiana, estimates that pawn business statewide is up about 25 percent over the past two years.

That increase was initially caused by the sharp rise in gasoline prices, which he said caused low- and middle-income workers to begin pawning valuables to fill their gas tanks.

“Now it’s spread beyond traditional pawn customers to people from all income levels fearing the loss of their homes,” he said. “Some of those people have high-level items – better cars, better guitars, whatever – a higher grade of merchandise than what we might have seen in the past.”

Tom Haggerty, co-owner of TomCat’s Pawn in Bloomington, said the store has been getting lots of flat-screen TVs and game systems. He said those items are selling fast.

Haggerty said he always has had a steady business with small contractors and construction workers who might pawn tools between jobs, but is seeing a broader spectrum now.

“It started pretty heavily in 2008, but now we’re seeing a lot of people who had held steady jobs coming in,” he said. “We’re starting to see a layoff factor.”

It’s not just the recession that’s brought new business to pawn shops. In the past year, so has the price of gasoline, the price of gold and the housing crunch.

Ace Pawn Shop owner Jack McCrory, who owns two pawn shops in Bloomington and one in Bedford, said he’s buying more items outright, and that the redemption rate on pawned items has seen a slight decline as the economy has worsened.