Read the full story at Biz Journals.com: Portlanders are turning more to pawn shops for loans, easy cash and cheaper goods as inflation pummels their purchasing power.
Customers can forage in their homes for items to bring as collateral to procure short-term loans from pawnbrokers or sell their stuff outright. The shops don’t take everything, since they have to make a profit to stay in business, but tend to trade well in the likes of jewelry, luxury handbags and firearms.
What makes them coal mine canaries: Pawn shops usually go against the business cycle by benefiting from worsening macroeconomics, according to research firm IBISWorld.
Brokers with shops in Portland and the Willamette Valley say they’ve seen an uptick in loans issued and customers bringing in items. They forecast a souring economy, falling in line with Oregon state economists’ predictions that the state could drop into a mild recession in 2023.
Capital Pawn’s loan balances started to climb around nine months to a year ago, said company president Adam Anundi. People have been coming in not just to get money, but also to buy goods so they don’t have to pay full retail. Capital Pawn has stores in downtown Portland and Beaverton, as well as elsewhere in the valley.
“What we’re seeing right now in the growth of our loans and sales is, it’s definitely an indicator to us that the market is continuing to deteriorate,” Anundi said. He declined to detail how much loans have increased but said they are increasing steadily month-to-month. He expects to see more people in need of Capital Pawn’s services.
“We’re making those changes as our backrooms and our storage areas fill up with people’s belongings. It’s going to get to a point where we’re going to run out of room, and then you have to be more selective on what you bring in,” he said. “You don’t have room for those big generators or air compressors or TVs and things like that. You have to be more selective with smaller things.”
Josh Oller, owner of Silver Lining Jewelry & Loan, said he knows most of his customers so well he’s almost on a first-name basis with them. People are uncertain, and they’re seeing the effects of inflation, whether in gas or their grocery bills, he said.
“The dollar is not going nearly as far as where it used to be, so we have seen an increase in people coming to us,” Oller said.
People are bringing in tools, game consoles and jewelry, he said. Buyers found a lot of stuff at the beginning of Covid that they may no longer want, he said, so they’re taking those in to sell.
Customers are still turning to Silver Lining for less expensive purchases.
“People have a psychological need to buy. It makes us feel good. And right now, people are really worried about where the next paycheck’s coming (from), how expensive things are,” Oller said. “So they start to turn to stores like us that have quality products at well below what retail values are.”