Pawnbroker owners say sales and lending remain low amid COVID

FALL RIVER – Daniel Jaynes says that contrary to what some people might assume, pawn shops have not been murdering in the wake of the nearly year-long pandemic.

“That’s what people might think, but we saw a lot less (walking) traffic,” said Jaynes, who runs Pawtucket Pawn Brokers Too at 302 South Main St.

“People think the business must be booming, but I’m talking to pawn shops across the country, and everyone’s down,” he added.

Fall River has three downtown pawn shops on South Main Street, all within a block and a half of each other.

Andrew Jaynes, Daniel’s father, opened Pawtucket Pawn Brokers Too in 1993 with his late brother Howie in what was once a jewelry store.

Howie, along with another partner, previously owned and operated Pawtucket Pawnbrokers in Rhode Island, which is still in business and has no affiliation with Pawtucket Pawn Brokers Too.

New England Pawnbrokers at 407 South Main St. has been owned and operated since 2007 by Andrew’s brother-in-law, Jack Frank.

“It’s a friendly competition,” Frank said. “We help each other when we can and see each other during the holidays. We try to behave.

Across from Frank’s pawnshop is Fall River Pawn Brokers, which has three stores in the city and nine other locations in Massachusetts, Rhode Island and Connecticut.

Messages for Fall River Pawnbrokers were not resent. But Frank and his nephew Daniel were more than willing to talk about how the COVID-19 pandemic of the past 11 months has affected their results.

Fewer loans and one layoff

Frank says he has been forced to tighten his belt in terms of personnel.

Before the COVID-19 state of emergency was declared in March 2020, it employed two full-time and two part-time workers. He eventually cut the store’s hours of operation and, at the start of the summer, laid off a full-time employee.

“I want to bring him back,” Frank said, although he couldn’t predict when that might happen.

He says short-term secured loans using a client’s personal assets as collateral represent 70 percent of his income; the remaining 30 percent comes from sales of items that cash-strapped customers sold to the store.

Frank said the U.S. government’s 2020 stimulus package – which provided a lump sum of $ 1,200 to people earning up to $ 75,000 per year and an additional $ 600 in weekly unemployment benefits from March through July – had reduced its lending activity.

“Everyone was getting their loans back then, which was not good for me,” he said. “They picked up but didn’t come back. “

Frank added, “They didn’t need us” for loans based on the value of personal items that were pledged or pledged.

“They were buying things, but as far as the pledge goes, it was almost non-existent,” he said.

Frank says his loan balance from year to year is down 40 to 50 percent.

The federal government approved a smaller $ 900 billion economic aid package last December offering a one-time stimulus check of $ 600 and nearly three months of a $ 300 supplement to weekly unemployment insurance checks. .

“I’m glad my clients are going to get the money,” Frank said. “But it’s not going to be continuous, and we’ll be there when they need us.”

Frank said many “unbanked” clients who don’t have bank or credit union savings accounts either live paycheck to paycheque or have a fixed income.

These are the people, he said, who rely on short-term loans with a reasonable interest rate, which in his case, he says, is three percent.

But he says it’s also not a surprising phenomenon that some middle-class workers who have lost their jobs in the past year have also turned to pawn shops to help them out.

“If I’m laid off, I can’t go to the bank and ask if I can have a loan of $ 100 or $ 200 for two weeks,” Frank said. “And there is no stigma attached here.”

The other obvious reason foot traffic has declined since last March, he said, is the fear factor of catching COVID-19, which has so far killed more than 300 Fall River residents.

Frank said he and his staff were ready to go out to meet a client who was too nervous to enter.

He said that a week before a standard 90-day loan was due, he or an employee would call the client and then send up to two letters.

Frank said if the client still cannot afford to pay it back at that point, they will usually extend the loan term by 30 days before it is lost.

“We are getting to know these people,” he said. “It’s not just a face coming in through the door. We get to know them.

Frank said he had held monthly sweepstakes for the past four or five months. Anyone who takes out a new loan is eligible for the prize, which includes a gift card for a supermarket or other store as well as electronics.

“People love it,” he says.

As difficult as it is to run a pawnshop, Frank says he knows other types of businesses face even greater challenges.

“I wouldn’t want to own a restaurant today. These people are definitely much worse, ”he said.

Pawtucket’s pawnbrokers too

Daniel Jaynes says there was a short-lived surge in in-store sales last spring at his Pawtucket Pawn Brokers Too following the first round of stimulus checks.

But he said that had changed by the time summer arrived.

Jaynes also said those unemployed and earning an extra $ 600 per week from the federal government were less likely to pledge their assets for loans or sell personal items.

And this has resulted in a significant reduction in inventory.

“Summer is usually busy, but it was just brutal. It was a bad, bad, bad summer, ”he said.

“We’re a little mom and pop business, and we had no inventory,” Jaynes said. “Our summer shelves were just bare. People would ask us if we were going bankrupt. It was scary.”

He says his inventory levels remain well below what they should be.

Pawtucket Pawn Brokers Too owners Andy Jaynes, daughter Maura Muller and son Daniel Jaynes are seen here in their South Main Street store.

Jaynes, 35, runs the pawnshop with his sister Maura Muller. Their father also comes almost every day to help.

When business slowed down last year, Jaynes said he had to lay off one of three part-time workers.

He says he is not opposed to the federal government giving a helping hand to those who need it, even if it means a reduction in pledged items.

“I think government help is needed – it’s great,” Jaynes said. “We don’t want to see people struggling.

But he says the extra $ 600 a week in unemployment benefits last year “nullified what we were proposing.”

Jaynes said the key to the long-term survival of pawn shops in this uncertain era of the novel coronavirus is to “be aware of what’s going on and be competitive.”

Staying competitive, Jaynes said, can sometimes mean making less profit by paying a customer more for certain items than what would be offered under normal circumstances.

“We can survive but not prosper,” he said, when asked to assess the months ahead.

Pawtucket Pawn Brokers Too is located on South Main Street in downtown Fall River.

Jaynes pointed out that having a trustworthy reputation is “98%” of what it takes for a pawnshop to stay in business when times get tough.

“We are very lucky because we have a great reputation,” he said.

Jaynes said pawn shops will continue to exist as long as people need money quickly.

“We do the kind of banking services that banks can’t. We are the oldest form of banking, ”he said.

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Paul Cox

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