Shane’s – The Pawn Shop, Inc

Pawnbrokers Report Increase in Loans but Less
Cash for Gold

National Pawnbrokers Association

The National Pawnbrokers Association (NPA) today announced the results of NPA 2012 Trend Survey that assesses how the changes in the U.S. economy affected the pawn industry since the beginning of 2012. According to the survey, the average pawn loan amount increased to $150, nationally. This estimate is up from 2010, in which the average loan amount was $100. Additionally, over 80 percent of pawnbrokers report an increase in the dollar amount of loans being extended.

“Pawn store customers are from all walks of life and tend to borrow only what they need, as indicated by the average national loan amount,” said Kevin Prochaska, president of the National Pawnbrokers Association. The Trend Survey indicated that over 85 percent of all pawn loans are repaid, which is consistent with the national average in 2010. “The increase in the average pawn loan amount indicates that American families were seeking financial relief by turning to their local pawnbroker.”

Contrary to popular belief, the most common transaction pawnbrokers make, by far, is a pawn loan. While cash for gold transactions and retail sales are important to the pawn store business model, over 80 percent of pawnbrokers reported that pawn loans are the most common transactions.

What may come as a surprise, however, is that cash for gold buying has fallen off. With the downturn in gold prices, which dipped to $1550 in January after skyrocketing to over $1,900 per ounce in 2011, 70 percent of pawnbrokers are reporting a decrease in gold buying transactions. This trend is viewed as temporary, as customers are opting to borrow against their gold or hold it for a potential future spike in value.

“The pawn business model is complex,” added Kevin Prochaska. “While many stores benefited from the increased amount of pawn transactions, there were also many shops that suffered from sluggish cash for gold activities.”

The forecast for 2013 was lukewarm. Pawn store owners believe that next year will bring an increase in all business, but they are skeptical that the retail side will grow as much. “For years, pawn shops have been providing safety net loans to families that encounter sudden financial emergencies,” adds Prochaska. “These vital, small-dollar loans simply aren’t offered by banks and other traditional lending institutions. This year will be no different, but the industry will have to adjust to the new economic environment.”


Shane’s Pawn Shop, Inc

413 W. Lincoln Hwy 
Chicago Heights, IL 60411 
(708) 747-1171
E-mail: Shane’s Pawn Shop

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