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The evolution of pawn shops

Marketplace Staff Mar 28, 2008

The evolution of pawn shops

Marketplace Staff Mar 28, 2008


Tess Vigeland: Wouldn’t it be nice if during tough economic times when your savings account is running kinda low, the Fed would look at you and say “Hey, I like you; let me arrange for a $30 billion loan.”

Unfortunately, that privilege is reserved for the likes of Bear Stearns. For the rest of us, it might be time to get a second job — maybe even sell the family jewels.

Here’s reporter Jaime Bedrin.

Jaime Bedrin: My husband Scott and I are starting a baby fund. Even though babies are small, we hear they’re expensive and we live in New York City, where everything is overpriced.

We figure it wouldn’t hurt to comb through our stuff and see what we could sell, especially with the price of gold so high. I decided to think outside the box — or, in this case, with my box: my jewelry box.

My first stop: a 5th Avenue jeweler named Frank Pollack. He’s been in the bling business for four decades.

Frank Pollack: Hi Jaime. Frank Pollack.

Bedrin: Hi. Thanks so much for agreeing to meet.

Pollack says whenever the price of gold spikes, people rush to unload old jewelry — mostly stuff they don’t wear or things they inherited or received as gifts.

Pollack: When it approached $800 — which was the previous high from 1979 — when it got to the $800, people came running to sell gold quickly. There was a big flurry of people selling what they had.

Bedrin: Do you mind if I show you some of my things?

Pollack: My pleasure.

Bedrin: OK. I brought a couple of things that are mine, that are my mother’s, things that were family pieces.

Pollack: Let’s see what this is. This is Barry Kisselstein-Cord and this actually has more value as jewelry than it does as scrap.

It’s a thick gold link necklace — Pollack says there’s always a market for this type of jewelry. He says it’s worth $6,000, but it’s my mother’s and I don’t think she would be happy with me if I sold it. As for my stuff, Pollack says he’d only pay a few hundred dollars for it.

Back on the train. I head uptown to a pawn shop in the Bronx. It’s called Pawnbrokers, Inc.

It’s not what I expect. It’s clean, well-lit, not scary looking. Blaine Messinger owns the place. He says pawn shops have evolved.

Blaine Messinger: Most pawn shops — the ones that are thriving — are going to busy areas and they’re putting in clean retail store-like outlets that don’t look like a small little mom and pop store.

The place isn’t that busy. I figured with the shaky economy, people would be ready to sell their stuff, but Messinger says most customers stop by for small short-term loans — the kind of loan that’s tough to get from a bank, especially if you don’t have good credit.

Messinger: The bad thoughts of it are gone. People are now realizing that there is a place out there where they can go get $200-300, $500 for a month or two.

Messinger says 85 to 90 percent of his customers redeem their merchandise, usually within a few weeks. The pawnbroker collects 4 percent interest on the loan. But it’s not a loan I’m interested in; I’m trying to offload this gold choker my mother gave me; it’s so eighties.

Back on the train. I’m headed to Midtown to New York City’s diamond district for a rendezvous with jeweler Roman Malayov.

When he weighs my necklace, he says my “cash out” value would be a shade more than $400. That seemed a little low to me.

Roman Malayov: For a piece like this, I mean, it still seems to be in pretty much good shape. Before I would consider melting it…

Melting it?

Malayov: …I would try, let’s say, just polishing it up a little bit and cleaning it up and maybe selling it on eBay and getting a couple of more dollars for it.

Malayov says it’s a great time to sell your stuff. He’s fielding calls from clients from all over the world right now wanting to invest in gold.

That gets me thinking: rather than handing over my necklace for a paltry $400, maybe I’ll hold off. After all, with the price of gold soaring and the commodities market going crazy, you never know… it could be worth something some day.

In New York, I’m Jaime Bedrin for Marketplace Money.

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