pawn shop business

Pawn Shops Continue To Flourish During COVID-19 Recession

Pawnshops are one of the few businesses that have continued to thrive during the Covid-19 Recession. As unemployment in the United States and the rest of the world skyrockets, the pawn store industry is facilitating income supplementation, especially in low-income communities. More and more people have been visiting pawn shops for short term loans, selling precious family heirlooms, and valuable items such as engagement rings, necklaces, and rare ornaments. Pawnshops continue to flourish and profit in these uncertain times.

Pawn Businesses Thriving During the Pandemic

Pawn stores are prospering during the COVID-19 crisis. With pawnshops like Time Pawn and Gun in Hampton remaining open throughout the pandemic and lockdown. In an interview, Tommy Staton of Time Pawn and Gun stated that they experienced the most successful period of sales during the first month of the crisis. They have witnessed a huge hike in sales of firearms as well as a sharp rise in people pawning their valuables to ease them through this unfortunate time.

When customers need extra money, they pawn a valuable item in exchange for a certain amount of money. For example, if John needs some extra cash and he pawns a ring for $100, the pawnshop retains the ring for a period of time, if the customer wants the item back, they will have to pay the pawn store $100 plus a fee to pick up the ring. If the customer cannot afford to pick up the ring, they will then be asked to pay a renewal fee which is less than the amount they would need to pick up the ring.

Firearms sales have increased drastically because most people are apprehensive that they might need extra ammunition during the global crisis. People have essentially been panic buying.

Games consoles and televisions are also selling out because the schools are closed. Children are at home and their parents need something to alleviate the boredom. Whole families staying at home means that entertainment is in high demand.

Items that are flying off the shelves include, smart devices such as tablets and phones, laptops for those working from home and gardening equipment. Many pawn shops have been in full operation throughout the crisis and employees have continued to work during the pandemic. Pawn store owners have generally steered clear of applying for business emergency business loans or funding since other businesses need it more.

Pawnshops Are Adapting

Most pawnshops have put social distancing measures in place with stores restricting the number of customers that can occupy the store at any given time, coupled with thorough hygiene practices, these measures have facilitated the process of ensuring the stores remain open during the coronavirus pandemic.

Some pawn stores have extended their timeframes and changed terms to ensure that people have more time to get their items back. Most stores provide a 30-day window for items to be picked up however, some stores are offering an extra 30 days to make it easier for customers to pick up their items without incurring extra charges.

At Titlelo in Fort Lauderdale, owner Dwayne Dumesle stated that the coronavirus pandemic has prompted an increase in car title pawns. Dumesle also observed a spike in other pawn-like loans such as title loans and auto equity loans. He attributed this increase in sales to the COVID-19 lockdown.

Other COVID-proof businesses include technology backed companies in education, agriculture, health, and content creation companies (read McKinsey for more insight on this). Health and wellness delivery services such as a juice cleanse companies and supplement companies are seeing a spike in sales due to fear and apprehension associated with the spread of the coronavirus.

The coronavirus has harmed the global economy and many businesses have collapsed or been adversely affected by the virus. However, pawn stores and many online businesses such as eBay and Amazon have seen a massive rise in sales.

Also, supermarkets and food delivery services such as Instacart and UberEats have profited from the pandemic. Although, pawn store owners have stated like those mentioned in this article have stated that they predict that things will return to normal once the pandemic completely dies down. However, in the meantime, pawn stores continue to flourish, even as lockdowns are eased and things begin to return to normality.

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George Meszaros is the editor and co-founder of Success Harbor where entrepreneurs learn about building successful companies. Success Harbor is dedicated to document the entrepreneurial journey through interviews, original research, and unique content. George Meszaros is also co-founder of Webene, a web design and digital marketing agency.

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