Are you resorting to pawn brokers? - Money Talks - MoneyTalks's Blog - Bakersfield.com

Mar 28, 2008 at 07:03 AM : As someone who used...

As someone who used to work at a local pawnshop I would urge extreme caution is utilizing most of the pawn shops.

Not because they are places to fence stolen wares, The legal controls in place negate that. The pawn shop depicted in the photograph is owned by the same guy who owns two other cash-for-merchandise businesses here in Bako.

While I won't go on record as saying there is price-fixing, I will say they communicate VERY regularly between stores to see what to offer for a specific piece of merchandise. Further, with the price of gold, I can absolutely guarantee your jewelry will be melted down in a nanosecond if you forget to pay on your loan. You won't get ANY breaks and the pawnshop will get $1,000 bucks for loaning you $75-$100 bucks. Not a bad return on their money.

All the other pawn shops are owned by out of town interests EXCEPT Globe Loan and Jewelry Company. If I absolutely had to use a pawn shop I would ONLY go to Globe Loan. They are the only pawn shop I can categorically and completely say is above board. Beyond that, I won't comment. I'll let you draw your own conclusions

Mar 28, 2008 at 07:03 AM : I agree that...

I agree that Globe is as Curt says, legit, but raking in the cash!!! Do they take Hummers?

Mar 28, 2008 at 07:03 AM : A local muscian guy...

A local muscian guy I knew used to pawn his equipment on a regular basis then as soon as he'd get a gig, he'd go pick it up. I always thought it was crazy since he nver got much for it but I guess it allowed him to suvive another day. No telling how much he lost over the years by not having the money to get all of it out of hock.

Of course this is the guy who put all his possessions in his car and put it in storage to go drive trucks. I guess he got down and out because he let it go and lost the car..along with everything he owned.

Mar 28, 2008 at 07:03 AM : Are you resorting to...

Are you resorting to pawn brokers?

No.

Mar 29, 2008 at 09:03 AM : After...

After working at a local pawnshop for over 15 years, I can tell you first hand it's a terrible and vicious cycle for the vast majority of pawn shop customers. Getting cash for your merchandise is the easy part., getting your merchandise back is a completely different matter.

I have seen three generation customers: Mother, daughter and granddaughter use the pawn shop to "make ends meet" but the truth is, those who continuously use the pawn shop will often pay ten to twenty times the actual value of their merchandise in interest charges before they actually manage to pick up their merchandise - If they ever pick it up at all!

One stunning example is a lady who borrowed $100.00 on a diamond ring. Every four months, she paid between $17.50 and $23.00 to keep her ring in pawn (and thus not lose it). It's not too hard to see that over time this will add up - especially when the customer has not just one, but five (or more loans) that must be paid on every four months.

If the financial need is a one time thing, pawn shops are a valuable financial tool for those who have a difficult financial month. They can get a loan, recover, and pick up their merchandise. HOWEVER, the reality of the matter is quite different. Most pawn shop customers get sucked into a revolving-door of financial insolvency where they pay and pay and pay never once thinking of the actual cost of their loan.

The only winner is the pawn broker. Grandma's beautiful ring will be dissected, melted down and sold at many many times what was paid for it.

As with ANY business, I would urge the pawn shop customer to carefully evaluate the business's before signing any contract. If possible, avoid the "chain store" pawn shops where personal service takes a back seat to the bottom line or where the owner of several stores fixes prices to eliminate competition.

Also avoid any pawnbroker that insists each and every ring be written on different pawn tickets. While it seems smart to put each item on a ticket of it's own, the math works against you: The interest on a five dollar loan is 100% whereas the interest on a $100.00 loan is only 17.5% and each loan written has a set up fee of between three and five dollars. If you absolutely have to use a pawn shop, you have to your your brain and THINK!

Finally and most important of all, READ AND UNDERSTAND THE CONTRACT COMPLETELY! If you do not understand ANYTHING have it explained to you. If you read the pawn ticket in it's entirety, you will be amazed at how few rights you have as recourse if something goes wrong.

Last year, my recommendations would have been different. However, recent changes in the ownership of pawn shops here in Bakersfield has changed the pawn shop business here completely - and not for the better.

The only store I can recommend is Globe Loan and Jewelry. Steve and Gail Magnus are wonderful people who will do their absolute best to work with you (even if you are having trouble). You won't find that kind of customer service at any other pawn shop in Bakersfield.