The Humble Pawn Shop Gains Mainstream Acceptance

The United States, as well as most of the industrialized world, has endured the longest and most severe economic downturn since the Great Depression of the 1930’s. The causes of this recession are still being debated, as well as the possible solutions, with no conclusive or unifying opinion. Regardless of the numerous expert opinions that have been offered, there is fundamental agreement that the middle class has been extremely hard hit by these economic conditions. This has resulted in fundamental changes in a group that has been the proverbial “backbone” of American society and is known for playing by the rules and working hard to build a better future for the next generation.

The principal of working at a manufacturing assembly job for 20-30 years and then retiring with a pension is largely a thing of the past. Fewer private employers are offering benefits such as health insurance and the “trump card” of rising home values has largely vanished. Long periods of unemployment, vanishing retirement savings and the devastating effects of major illness while being uninsured have also devastated many middle class families. All of these factors combined have had a remarkable and long lasting impact to principles that middle class have held dear for generations.

While these bedrock principles of middle class America have been under tremendous assault, the ability and/or desire of the banks to lend money to this hard working group of people has also ground to a halt. In the opinion of many former borrowers, their banks seem quite content to invest in large corporate entities, manipulate huge quantities of money for short term profits and simply no longer view the middle class as anything other than a possible checking account with the associated fees and surcharges. Because of this a particular resentment has been fomented amongst those who have been displaced from the former financial norm and alternative methods of financing have risen in popularity.

It is due to these circumstances, and many others, that the humble Pawn Shop has fundamentally changed from the role of “Lender of Last Resort” to a mainstream entity that has filled the role of “The Bank” for many struggling middle class members of American society. The previously held stigma that pawn brokers were experts at obtaining high value items for very little money, by presuming that the customer would default on the loan, has largely vanished. With an average of 85% – 87% of pawn loan customers paying back their loans and retrieving their items, there is hard evidence now that the pawn shop has indeed become a primary financial partner for many struggling Americans.

The recent development of several popular television programs such as “Pawn Stars”, which is currently one of the most popular programs on The History Channel, has gone a long way to further dispel the stigma that has saddled pawn shops for generations. It is through these programs that large segments of the population, who had no idea what services pawn shops actually provide, have become educated and openly accepting of the traditional pawn shop. This programming has reinforced the truth that pawn shops are owned and operated by real people, with high standards of ethics and moral values, who while constrained by the financial realities of running a business, will indeed do everything they possibly can to help their customers.

While many middle class families are choosing to turn unneeded items into much needed cash through yard sales and popular Internet “bulletin boards” such as Craigslist, many families have concerns about the security of these sales methods. In this day and age, the thought of strangers arriving to look at jewelry or a yard full of unknown people at a family sale raises serious concerns for many. Once again the pawn shop fulfills the needs of the customer by purchasing unneeded items such as jewelry, electronics and collectibles in a safe and secure environment, often times paying much more than the seller expected. Factor in the expense and genuine hassle of private selling items and the pawn shop is an unbeatable source of cash for many sellers.

Another fundamental change in middle class America, which has occurred due to the lengthy economic downturn, has been the popularity of being thrifty and frugal. It is no longer viewed as a bragging point to proclaim how MUCH one has paid for a particular item, but now it is viewed as a “Badge of honor” in many middle class social circles to announce how LITTLE was paid. It is in this role that pawn shops have truly gained valuable acceptance. Typically, top quality items can be purchased at pawn shops for 30% – 60% less than even the offerings of the ubiquitous “Big box retailers”. Therefore at a social gathering or during casual conversation, the savvy pawn shop customer easily has the upper-hand in the now popular game of “Who paid less?”

Finally, pawn shops have picked up a rapidly growing demographic of customers who are heavily environmentally focused and also keenly aware of the explosive “Buy Local!” movement. For many purchases the massive amount of packing materials that must be disposed of is nonexistent at the pawn shop. The item is purchased, removed from the display shelf and ready to use without the pile of foam, cardboard, plastic and holding straps that accompany a purchase from a “Big box retailer”. Additionally, through the efforts of groups such as Local First Arizona, recession weary consumers have become keenly aware of the importance of buying from locally owned businesses. Consumers are much more aware now, due to the current economic conditions, that buying local keeps more dollars within their communities and allows the merchant to invest more dollars in hiring, expansion and growth within the community.

In conclusion, it is apparent in 2012 that the destructive economic conditions within this recession will eventually dissipate somewhat and that things will begin to improve. What remains to be seen is what type of middle class will emerge after suffering for such a long time and having to fundamentally change in order to survive? If history has taught us anything, it is that the American middle class is quick to help those in need and does not forget those who have helped THEM in their time of need. If anything of value has emerged from these historically difficult times it is that the principals of right and wrong still hold an important place in the American middle class and this foundation of American society will not forget who has genuinely helped them when the going got tough. It also seems that through this recession, the humble pawn shop has genuinely shed the undeserved “stigma” that has long been a part of the industry and finally found genuine mainstream acceptance.