High gas prices driving people to pawn shops

Pawns of the pump

Posted: Sunday, May 07, 2006

To pawn or not to pawn, that is the question some central peninsula residents are asking as they dig a little deeper into their pockets in an attempt to pay pump prices that continue to soar.

“You bet we are,” said Allen Wiser, owner of Kenai River Trading Post on Kalifornsky Beach Road, when asked if he is seeing an increase in pawning business as people look for fast cash for gas.

“It’s a real impact on people. Every day it seems like more and more are coming in just to make it to work the rest of the week, or to make it until payday,” Wiser added.

Employees at Soldotna Pawn Shop and Alaska Trading Company and Loan in Soldotna said the story was largely the same at their businesses.

People turn to pawn shops and trading posts because they offer easy money, either buying merchandise outright or lending money in trade for personal possessions.

In the latter arrangement, the borrower is given 30 days to repay the loan, and an additional 30 day grace period to repay the loan along with the loan’s interest fee, Wiser said.

“Twenty percent is pretty much the standard interest fee,” he said.

Wiser said that items that come in for pawn come from people of all walks of life.

“We get things from all classes,” he said.

While Wiser said lower-, middle- and upper-class people all bring in items, what they bring in often varies significantly.

Wiser said the lower-end merchandise he sees typically includes inexpensive jewelry, cheap DVD players, DVDs, video game systems and video games.

“People often will move games out of their collection, games they’ve had for awhile or already played a lot, as they need to fill the (gas) tank,” he said.

At the higher end of the spectrum, Wiser said merchandise includes tools, such as those from DeWalt or other high-performance industrial tool makers, and jewelry with large diamonds or other precious gems.

“Sometimes we even see things like snowmachines, four-wheelers and motorcycles, but that’s more for people trying to make house payments or rent,” Wiser said.

While this surge of incoming merchandise may seem like a boon to Wiser’s business, he said it’s actually a mixed blessing.

The same rising gas costs that cause people to pawn items may also keep people from buying items or making loan payments for items pawned.

“It helps, but it hurts too because I need to be able to sell things and collect that service fee to make money. I can’t pay my HEA bill with a 20-inch television.”

That’s why Wiser said he tries to be fair as possible when people are strapped for cash.

“I know it’s tough and I try to work with people as best I can,” he said.

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