Pawns in the game

THINK pawnbroking and you think Dickensian drudgery, with wretched unfortunates reduced to swapping their treasured assets for just enough cash to keep them out of bother.

But pawnbrokers appear to be enjoying a renaissance. They say their services have changed and that their diverse customer base appreciates their quick, non-judgmental and costeffective services.

The National Association of Pawnbrokers (NAP) argues that, far from being about grinding poverty and unhappiness, going to a pawnbroker is a positive choice. It even claims that pawnbrokers offer a much-needed alternative to big banks, where customers get little face-to-face attention or immediate decisions.

While this point is arguable, the presence of pawnbrokers on high streets, unlike that of banks, is on the increase - 10 years ago, there were just 100 members of NAP, now there are more than 360. Altogether there are between 700 and 800 pawnbrokers across the UK, with 60 advertising in the Yellow Pages for the London area alone.

Nathan Finch, NAP assistant secretary-general, says: "It is being denied credit that leaves people feeling unhappy and desperate. When people get credit from pawnbrokers, they come out feeling happy. The experience should be a pleasant one - it's a very simple transaction."

While not even the NAP would promote pawn shops as the first choice for large or long-term borrowing, pawning an item of jewellery for a quick fix of cash stacks up surprisingly well against the likely alternatives.

Pawnbroking charges should be compared to the cost of overdraft usage fees, or unauthorised borrowing charges, which can be up to pounds 25 at major banks.

Alternatively, they should be weighed up against gas, electricity or phone reconnection charges, as most customers will pawn goods to pay their bills.

Charges are around six per cent per month on borrowing, typically between pounds 80 and pounds 350. While this sort of rate will not top the best-buy tables, pawning can be an attractive and instant way to avoid running up black marks and excess charges with your bank, utility company or landlord.

Before buying her two-bedroom house on the Isle of Dogs, Frances Corrin, 30, used pawn shops to help meet her monthly rent. But while Frances is up front about it, there remains a stigma about the industry.

She says: "I recommend pawning to friends who run out of cash, but I know some people who've used pawn shops and are ashamed of it. Around 80 per cent of most pawnbrokers' trade is repeat business from satisfied customers."

Pawnbroking can be attractive because of the emotional ease involved in getting your cash, compared to begging family and friends or letting your bank manager know your spending habits. Finch says: "A pawnbroker won't make any moral judgments, whether you are looking for pounds 80 to pay a bill or for pounds 350 to put on the favourite at the 3.15 at Newmarket."

So what actually happens when you walk into a pawn shop? Most brokers deal largely in gold jewellery, but others also deal in electrical and other goods. Counter staff take a few minutes to value your item and tell you how much they would be willing to lend on that basis. Many customers find the amount they are offered is larger than they need.

There are no credit checks, as your item is their security, but reputable brokers will make identification checks to guard against dealing in stolen goods. At the end, you receive a proof of ownership, reminding you that the item is legally yours for at least the next six months.

After that period, the pawnbroker is obliged to give you two weeks' written notice to pay off your loan and reclaim your goods. If you fail to reclaim your item and if it is sold on for more than the cost of your loan charges, you will be sent the difference.

Some borrowers might shun pawnbrokers because they are afraid of being associated with stolen goods, or with drug addicts pawning for their next hit. But Greville Nicholls, chief executive of Albemarle and Bond, which has 50 pawn shops nationwide - seven in London - says: "All our staff are trained, so if owning the jewellery seems at all out of character with the customer, we won't accept it.

All new customers require identification, such as a bill with their name on it. Because we keep items for six months, pawning stolen goods is not a good way for thieves to blur their trail.

We also film all transactions."

While Nicholls admits that typical customers are blue-collar, if there were fewer misconceptions surrounding pawnbroking, more of us might prefer it to bank or bill charges.

Copyright 2002
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