On past visits to the pawnshop near her Kirkland home, Sharon Epps bought a TV and a VCR. When she's ready to buy a bicycle, she plans to shop there.
It wasn't until a couple of weeks ago that she herself pawned something to help tide her over until her next paycheck. Laying a necklace on the counter of the Yuppie Pawn Shop in Kirkland, she explained she wanted a $20 loan that she would repay the following week.
"I just ran put of money yesterday," said Epps, a state mailroom trainee. "I can't go through the weekend with no money. I don't mind pawning for my kids, I really don't."
Epps is among a growing number of suburbanites who are turning to pawnshops as a new source of credit.
The new suburban pawnbrokers are doing their best to overcome the old image as seedy places on Skid Row with bars on the windows, racks of guns on the wall and, too often, stolen merchandise on the shelves.
"People are wanting nicer, cleaner environments. You should feel as comfortable coming in here as you do at Nordstrom," said Brian Lurie, who opened the Yuppie Pawn Shop in downtown Kirkland five years ago before moving to a more visible location in a strip mall beside Interstate 405 last year.
Pawnshops are a growth industry. Nationally, the number has roughly doubled from 6,900 shops in 1988 to somewhere between 12,000 and 14,000 today, according to the National Pawnbrokers Association.
The potential for profits from high interest rates - up to 20 percent or 25 percent a month in some Southern states - has led to the creation of several publicly traded companies running pawnshops in recent years. So far, stricter limits on interest rates in Washington have deterred the national chains, Cash America, Ezcorp, First Cash and U.S. Pawn, from opening shops here.
In Washington, the maximum interest rate is 3 percent to 20 percent a month, plus a one-time setup fee of 2 percent to 40 percent, depending on the loan amount. The loan expires after three months, unless extended by the pawnbroker.
The bargains sought by shoppers are made possible by people who sold the goods or who used them as collateral and ended up forfeiting them. If the borrower doesn't reclaim the pawned item, the store can sell it for whatever the market will bear.
"We are a cash machine to a lot of people who, for whatever reason, don't have a relationship with a bank," said Rob Robinson, a former Key Bank vice president who operates the Western Cash pawnshop in Bellevue.
While national companies are staying away from Washington, plenty of local entrepreneurs are setting up shop.
Woodinville got its first pawnbroker nearly three years ago when Doug Elburn and Nick Barnes opened the Baby Boomer Pawn Shop in a strip mall. The Baby Boomer advertises in local newspapers, circulates discount coupons and belongs to the Chamber of Commerce.
Now the Baby Boomer has competition from the Woodinville Pawn Shop across the street.
The region's biggest chain of pawnshops, Bellevue-based Pawn X-Change, has grown from one store in 1993 to 12 stores between Olympia and Everett. The atmosphere of its downtown Bellevue store, with its open aisles and its attractive displays of merchandise, has the feel of a well-run retail outlet.
Bellevue Police estimate that the number of transactions at Bellevue's three pawnshops has doubled over the past two years.
Since the Seattle City Council loosened zoning restrictions on pawnbrokers several years ago, shops have spread from downtown to West Seattle, Capitol Hill, Aurora Avenue and Lake City Way. The number of pawn transactions reported annually to Seattle Police has doubled from 70,000 to 150,000 over the past three years.
Pawnbrokers must report all their loans and purchases so police can verify they aren't accepting stolen goods. Seattle Police recovered stolen merchandise in 300 cases last year.
"The business still has a pretty bad stigma. We're working hard on changing that," said, Pawn X-Change President Brad Shane. "I want it to be a place where my wife, if she didn't know me, could come into our store and feel comfortable, where she could come in and buy a ring or a TV for her son."
Efforts by pawnbrokers to improve the image of their industry suffered a setback in December when David Israel, at the time Pawn X-Change's president, was charged with knowingly buying stolen goods.
Israel, who no longer runs the chain of pawnshops, pleaded not guilty. The case has not gone to trial.
Business apparently has not suffered at Pawn X-Change, which plans to open two more stores this year.
John Caskey, a Swarthmore College associate professor of economics and a chronicler of what he calls "fringe banking," sees the boom in the pawn business as a reflection of the hard times facing people on the lower rungs of the economic ladder - and of more laissez-faire government policies.
"There's been a move toward looser regulation of high-risk lending," Caskey said. "That's more an attitude about free markets: As long as a person understands the transaction, let him borrow at 200 percent a year."
Among the items most commonly pawned on the Eastside are jewelry, televisions, VCRs, bicycles, power tools, CDs, and, at some stores, guns. More than four-fifths of all pawned items are retrieved by their owners, said Robinson of Western Cash.
During the afternoon Sharon Epps pawned her necklace at the Yuppie Pawn Shop:
-- A woman attempted to pawn a ring but kept it after being told it was of such low value she could only borrow $3.
-- A Redmond machine-shop worker made an interest payment on the golf clubs he had pawned.
-- Mike Ballew, assistant manager of a U-Haul dealership, sold the store two nearly new bicycles, two sets of in-line skates, helmets and protective padding. After some bargaining, he agreed to take $175 plus five compact discs for the lot.
"I'm a typical American. I overindulge and I buy - and I pay for it," Ballew said.
On the same day, at the Baby Boomer Pawn Shop, a woman paid off her loan and took home the ring she had used as collateral. A man pawned a 25-inch television. A woman came in looking for a cellular phone, and co-owner Doug Elburn added her name to his Rolodex list of people looking for specific items.
Pavlo Chornenki, a general contractor, made one of his regular visits to the Baby Boomer in search of power tools and collectibles. He eyed a shrink-wrapped professional version of Microsoft Office for $19.95 and wondered aloud if his wife would want it.
The owners teased him that he couldn't buy the software because it's only for professionals. "Well, I am one," he retorted in their ongoing banter.
No one questions that pawnshop loans are pricey. But for many people, they're one of very few available sources of credit, and they're a way of getting past a financial rough spot.
Western Cash owner Robinson suggests borrowing money from a pawnshop in the way one would use a credit card. "Don't go in and borrow $5,000 or $10,000 from a pawnshop that you think you're going to pay back over a year or two. That's not good economics," he said.
Keith Ervin's phone message number is 206-515-5632. His e-mail address is: kerv-new@seatimes.com
Back