Pawnshops Rise Above Reputation

When picturing a pawnshop, it's hard not to imagine a stern-faced pawnbroker, his suspicious eyes flickering over a collection of cameras, jewelry and rifles, all locked behind fire safes and barred windows.

But that imagery constitutes a stereotype, and a diminishing one, according to several Arkansas pawnbrokers.

Tim Collier's shop, Pacer Ltd., barely resembles anyone's image of a pawnshop. Collier, a man with a white beard and rosy cheeks, sits behind a cozy desk in his Little Rock office on South University Avenue. His office is his shop, where there's nary a camera, rifle or jewel in sight. Visitors are instead treated to photos of Collier's family and Arkansas Razorbacks keepsakes.

Collier didn't come from a pawnbroker family. He started in retail jewelry, moving to the pawn business when he realized very few pawnbrokers had jewelry specialization.

"That's what makes our business so unique," he said. "More than half of traditional pawnbrokers don't have the knowledge to look at a Rolex, or a diamond of any size, and determine its authenticity or any enhancements made or adjustments that would affect the value."

Diamonds and other precious stones can be laser treated or drilled, Collier said, and it takes a trained eye to notice these changes.

"That's why I got into the pawn business, to offer an alternative to traditional pawnshops," he said.

Now, he's the head of the Arkansas Pawnbrokers Association. Pawnbrokers perform normal retail buying and selling, but their main business is the regulated activity of pawning, or lending cash based on the value of an item. The borrower has a certain amount of time to redeem the item by paying back its value plus fees, and most items are redeemed - about 80 percent, according to the National Pawnbrokers Association. But pawned items that are not redeemed by the original owner can then be sold.

Collier's customers don't bring him their TVs or guns, because Collier doesn't buy them. He also doesn't buy musical instruments, cameras or video games - only gold and jewelry.

And even though Pacer doesn't have curbside appeal - nobody is going to walk into University Tower looking for a pawnshop - Collier still gets calls every day from people looking for iPods, extension ladders, anything.

"They're just going down the list of pawnshops," he said. "They don't read the fact that we don't do anything but jewelry. But that's generally how they find us."

Collier stores his customers' pawned items at a different location. When a pawn is not redeemed, he sells it to wholesalers rather than walk-in buyers.

Customers looking for curbside appeal might be surprised to find that Braswell & Sons, a shop on Markham Street in Little Rock, isn't a jewelry store.

That's certainly the vibe the store gives off, as shoppers are treated to bright lights and suited employees polishing glass display cases. But the LCD televisions and DVDs against one wall reveal the shop's true identity.

Douglas Braswell joined his family's business in 1993 after deciding against a career as an accountant. He now has two shops in Little Rock, one in Conway and another opening in Bryant. He's made it one of his goals to create inviting environments.

"We try to have a clean, inviting place," he said. "It's what you wouldn't anticipate; it's a place you wouldn't call a 'pawnshop.' We try to expand our market by surprising people. They come in, they're treated nicely, and hey, they're going to come back."


Corporate Pawnshops

Shops like Pacer Ltd. and Braswell & Sons are typical of the pawnbroker world, where businesses tend to stay local and family owned. "Our business is largely about relationships," Braswell said. "We're taking care of people."

"The majority of pawnshops across the country are mom-and-pop shops," said Collier. "According to the National Pawnbrokers Association, pawn customers tend to do business within a 20-mile radius of their homes."

During the Christmas season, pawnshops find themselves in competition with big retail.

"We try to compete on a level like some of the big-box stores do," said Stan Thomas, proprietor of Big Brothers Pawn, which has four locations in northwest Arkansas. "We have the right type of merchandise displays, they're clean and orderly, and we're customer friendly."

Thomas said he considers his 5,000- to 8,000-SF shops "upscale," intentionally selecting premium locations to foster that impression.

Environment makes a big difference, said Collier. "It's hard to get that warm, fuzzy feeling if you're walking into a big Wal-Mart superstore," he said.

But some competition has appeared from large pawnbroker chains, Collier said. "There are at least three publicly traded pawn stocks," he said, "Cash America, First Cash and EZ Pawn. They are corporate stores, if you will."

Those large shops will move into a location they like, buy an existing pawnshop and stick their branding onto it, Collier said. But that's not happening much in Arkansas, it seems.

"We haven't seen some of the publicly held companies really aggressively look at Arkansas," Thomas at Big Brothers said.

"I'm not aware of any of the chains opening in Arkansas," said Dale Barber, owner of United Pawnbrokers in Jonesboro.


Strength of the Business

Arkansas pawnbrokers think their business is healthy, and the main fuel comes from firearms and shiny stuff.

"It's mostly gun and gold," Barber said. "There is quite a bit on the electronics, dollar-wise, but it's mostly guns and gold, about 50-50."

"It has always been jewelry," said Braswell. "Traditionally, the pawn business in the South, especially, would be jewelry or firearms."

No firearms are present at Braswell's Markham shop. He has a whole separate store just for them.

Several factors have also boosted pawnshops in recent years. One of them: The History Channel's "Pawn Stars" reality series.

"I don't think people associate pawnshops today like they did 30 years ago," said Thomas, of Big Brothers. "I feel like the pawn industry as a whole probably garnered a better name for itself based on the reality shows that are on TV right now."

"'Pawn Stars' opened up opportunities," Braswell said. "We're excited that there's a depiction on TV showing us in a good light."

And Collier, at Pacer, said the negative stereotypes surrounding pawnbrokers originated from the same place: Hollywood.

"Less than 1 percent of stolen property shows up in pawnshops," he said. "There are local ordinances requiring shops to take information on the people they're buying from for that very reason."

"Pawn Stars," Collier said, has created an influx of new pawnbrokers inspired by the show, but even its positive depiction tends to spread some inaccuracies of its own.

"That's not pawning," Collier said. On the show, "As soon as they ask on camera, 'Do you want to pawn it or sell it?' they cut away. That's because they're buying stuff; then they're making a profit down the road. That's why many people don't understand what the pawn business is like."

Another factor working in pawnbrokers' favor is the rise of Internet-based commerce.

"Commerce on the Internet ... has made competition much more fierce for retail industries across the globe," Collier said.

Pawnbrokers are now able to find the cheapest prices for specific items quickly, Collier said, letting them immediately quote a fair asking price.

Also, eBay and other sites let pawnbrokers find customers willing to buy rarer, more collector-oriented items.

"Anything that comes in the door, whether it is sterling silver flatware sets, designer Lagos pieces, David Yurman pieces, Cartier pieces or anything with a trademark, those are the types of pieces that you'd want to put on eBay," Collier said.

Braswell said he didn't use eBay as much as he once did. "But eBay is very good for selling unusual items," he said, "not so good for the things we deal in mainly. But when someone comes in with an item we've never seen before, we can Google it and put a value on it."

Braswell said unusual items like Super Bowl rings had occasionally come through his shop, but most of the goods were commonplace jewelry, firearms and electronics.

Thomas, in northwest Arkansas, said he used Craigslist to gain greater exposure to some rarer items, but he also didn't like to exclude his local crowd. "We have kind of a philosophy that we would rather not sell all of our premium stuff on eBay," he said. "We like to keep it visible for the local customers."

Finally, it seems pawnshops will be around as long as humans desire precious metals.

"What's really driven us has been the ever-rising price of gold," Collier said. "That has really been a boon for pawnbrokers, and a boon for pawn customers."

With the price of gold skyrocketing, Collier added, the size of pawn loans has risen across the country.