Reality shows have been huge for the past few years. Of course, there are some tried and true reality shows that have been around for nearly a decade. The Hardcore Pawn show, based in Detroit, is one such show. And not only is the show established, but the pawn shop where this show is filmed is a well-established business as well. One thing that people often overlook is how high profile pawn shops can actually tell you a lot about current economic trends.
Take for instance that back in 2007, prior to the Great Recession, the stock at American Jewelry and Loan was flush with tools and other construction equipment. Of course, we were all on the cusp of a major financial meltdown at the time. The reason so much construction equipment showed up at the pawn shop, according to the vice president of the company, Seth Gold, is that the housing bubble had burst and construction contractors were in a hurry to dump their tools. This scenario is a perfect example of how pawn shops can act as literal barometers for what is going on with the economy.
According to Mr. Gold, the stock that was present in the shop for this past year’s holiday time sales tell a different story. As the winter rolled around and we got closer to the Christmas gift giving/receiving season, the pawn shop was doing great business. In fact, Gold said that the sales for the shop went up about 5 to 10 percent, and loan balances started to level out a bit. Pawn shops may not come in as your picture-perfect place to shop for holiday gifts, Gold and his family have worked hard to establish American Jewelry and Loan as a lasting establishment in Detroit; one where people regularly shop for all sorts of gifts. In fact, the shop has plenty of return customers; folks that come into the shop a few times a month, sometimes pawning an item, sometimes getting their items back and sometimes just making retail purchases.
A full 20 percent of the location on Greenfield Road is set aside for merchandise that is for sale. These items roll into pawn shops via people who sell their items or who use them as collateral on cash loans, but fail to pay the loans back. More of the space is behind locked doors. From lawn mowers and guitars to electronics and tools, this place is loaded with all sorts of goodies. Gold said that flat screen TVs are a particularly popular item to pawn. The store has about 6,000 TVs in all.
For those that think pawn shops are predatory, Gold had something to say: “People think around 10 to 20 percent (of people) come back” to pick up their pawned items.” The truth is, though, that between 80 and 90 percent of customers come back to the shop to get the things that they pawned. Others offer to at least pay interest until they are able to pay those pawned items off in full.
Everyone knows that Detroit residents have dealt with some difficult financial challenges in recent years. And while a lot of businesses have folded up and pulled out of the city, Gold, his father and their employees continue to provide a place for residents to get temporary financial help, while also having a place where they can purchase high quality products at very reasonable prices. It seems that this family is very proud of the service that they offer to people in this community, and that the people are glad to have a longstanding establishment like this one at their disposal.