Pawn shops boom in Virginia
March 29, 2010 | Virginia, alternatives, industry | Comments (0)Is it a coincidence that since Virginia created a more difficult operating environment for payday loans pawnshops are booming? This is the second story we’ve post in the last two weeks:
The back room of Vinton Pawn Shop Inc. looks like a pi-rate’s cove, a hardware store and grandma’s attic combined as one.
It has shelves of fishing poles, chain saws, weed whackers, hunting rifles, guitars in cases, vaults of engagement rings and gold necklaces, a slot machine and a Rascal scooter. With 13,000 square feet of storage, there’s hardly room for more stuff.Shops such as Vinton Pawn straddle the line between banking and retail — two business models that have been less than stagnant in the past year. Stagnant or not, almost 1,000 pawn shops opened in the past few years in the U.S. and at least two new storefronts have lit up in the Roanoke Valley: 220 Pawn & Gun Inc. in Roanoke County and Bargain Pawn in Salem.
The shops loan money — usually $100 or less, plus 5 percent to 10 percent interest — and keep collateral, such as DVD players or hunting bows, in storage. If a customer defaults on the loan after 30 days, the item in pawn becomes mer-chandise.
A deflated economy has increased the stores’ revenues from loans and gold sales while slowing retail sales.
Johnny Hill, a 16-year industry veteran who works at Vinton Pawn Shop, says it’s the “golden age’‘ and the “heyday’‘ of pawn shops.
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