United States pawn shops are among many businesses and industries that were impacted by the COVID-19 pandemic. However, some pawn store owners expected to see loans and pawned items increase due to many families struggling to pay their bills among mass closures and income decreases.
One Pawn Shop Owner Sees the Positives
Some pawn shops have found ways to adapt, keeping consumers in mind during uncertain times. One pawn shop owner in central Illinois, Perry Lewin, has owned and operated Decatur Jewelry and Antiques for nearly thirty years. He has admitted that 2020 was an immense struggle, but also reports hopeful information about pawn trends.
““We couldn’t keep a bicycle in the stock to save our life,” Lewin said during a Vox interview. He also added that tools were a hot-selling item and estimated gun and ammunition sales to continue to increase — he suspects his own numbers are up by as much as 500 percent.
During the initial days of the pandemic, certain items were hugely popular for purchasers, including televisions, musical instruments, video game systems, desktops and laptops — items that would keep individuals occupied while they were experiencing quarantine in applicable cities and communities.
Pawn Shop Statistics
Sources like National Pawnbrokers Association® suggest that, nationwide, there are around 10,000 pawn stores in operation — many of these pawn shops happen to be family-owned and classified as small businesses.
Pawn shops across the nation employ somewhere around 35,000 individuals, which contributes an estimated $3 billion to the United States economy.
Why People Use Pawn Shops
The FDIC reported in 2017 that about 6.5%households in the US were classified as “unbanked,” which means that not a single person in the household had a checking account linked to a US bank or credit union.
Around 18.7 percent of United States households were classified as “underbanked” — households that have at least one bank or credit union account but also needed to utilize
financial products and/or services that operate outside of the United States banking system.
These are the sorts of people who are among the 39 million who use pawnshops as a crucial avenue and lending option when they’re in need of fast cash on the short-term.
In the state of California, to pose one example, there was an average household debt of $0.16 for each dollar of personal income in 2019. These debts might include vehicle loans, student loans, and credit cards. Most of these types of bills were still in need of being paid, even amidst mass national lockdown.
Fast Cash Options for Americans in Need
Pawn shops are still a popular option for people who are in need of cash quickly. One option is a vehicle title pawn. In exchange for a fast money loan, an individual can give a lender their title to an owned vehicle until their loan is fully paid plus any interest agreed to.
These might be appealing loans due to the fact that they don’t require a credit check. Average application processes for title loans are around 15-45 minutes. Most importantly, individuals who take out a title pawn are allowed to continue using their vehicle.
Although the pawn market is declining about 1.6% per year between 2016 and 2021, many pawn shop owners are staying optimistic about their own small businesses.
