John Barrette - Sunbelt Digital Media
The consumer credit crunch is leading to more business at Nevada pawn shops and payday loan offices.
Mark Schmidt of Carson Jewelry & Loan in Carson City says he is seeing more customers who in flush times might have shopped Macy's or other well-known and pricey retailers.
"People are looking to stretch their dollars," he said. But that doesn't necessarily mean the retail side of his business is booming.
Neither his North Carson Street business nor his online store through e-bay is going gangbusters, though the online outlet lets him reach folks anywhere. "It does fine; it holds its own," he said.
Getting inventory is another matter. Schmidt's store inventory in the past quarter zoomed by 17 percent, a sign that goods are available as times grew tougher.
"But there again, that inventory isn't going to do me any good just sitting on my shelf," he says. "Money has been very easy to spend." He isn't talking for his customers, but for himself as he operates a business in a down economy.
Schmidt said it is his opinion the pawn shop business works best in good times, not bad, and he would just as soon his redemptions for 120-day loans be up rather than down. He said in such cases, the business works well and customers become repeat customers without unredeemed inventory spiking.
Redemptions right now are about 75 percent but can go as high as 88 percent, he said, and such a higher rate would please him.
In Reno, Orion Cuffe of Check Advance says applications for payday advance loans are up 25 percent but business actually hasn't increased significantly. That is because not everyone qualifies.
What also went up in 2008, he said, are defaults on the short-term loans. He said they were up from 8 or 10 percent before the economy tanked.
"This year it has been up, say to 13 or 14 percent," he explained.
The family-owned firm's average loan is about $300 and runs a couple of weeks, though the options are a week at 10 percent, two weeks at 20 percent, three weeks at 30 percent and 31 days at $36 per $100 of borrowed cash.
Requirements for loans include three-months of employment and a current bank account, $1,000 or more gross monthly income, some documentation and a positive report from Teletrack, a Norcross, GA-based firm.
In the Las Vegas area, Bargain Pawn's business is brisk in guns, gold and plasma TVs but not much else. So says Angela Bramlette, whose father owns the North Las Vegas pawn shop outlet and also has an online outlet. Guns are the big thing of late.
"We're selling them off the walls," she said. She said what she is hearing from folks is fear that an Obama administration may restrict access to weapons despite his campaign statements on the issue. But not everyone wants guns. Some sell them.
"A guy came in and sold us his whole gun collection," she said, recalling there were several weapons involved. "Can't eat ‘em, you know."
Gold, she said, can always be shipped off with the price over $700 an ounce for melting down and reuse. Plasma televisions are a plus, but other items, such as tools or furniture, aren't moving. "Nothing else is really selling right now," she said.
