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Anti-scam for Internet sales

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Another insight from this year’s National Pawnbrokers Association convention. This one came during the roundtable on Police Confiscations, but the speaker did not identify himself, so I don’t know whose good advice this is.

When selling electronics, like a laptop, over the Internet, he said he puts an identifier somewhere hidden on the item. He uses Whiteout or a scratch tool.

He also photographs — not just writes down — the serial number.

That way, if a “buyer” has a broken laptop, then buys a good one from you, then “returns” the broken one for credit, you are in a strong position to defend yourself when Paypal or eBay starts a dispute.

burglar

This won’t protect you from someone sophisticated enough to swap the good memory module in your machine for the bad one in  his, then return a “broken” machine to you, but it will screen out the less akamai scamsters, and that’s most of them.

Good to know.

#mauipawn #mauiretail

 

 

 

Pawn your sneaks? Sure, why not?

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You can do it in Harlem now.

Smell this

Smell this

A 16-year-old kid with 200 pairs of sneakers had the idea. It works about like any other pawn, which is to say, if there is a market for used goods, a pawnbroker somewhere will make a loan on them.

As we say at our Maui pawn shop, we’ll take in anything that doesn’t eat. And no doubt somewhere in the world there’s a pawnbroker who does take livestock, we just haven’t heard from him yet.

At Sneaker Pawn, there is a bit of a different wrinkle. If the shoe owner wants to sell, instead of making a straight purchase, it operates more like a consignment: Sneaker Pawn makes the sale and splits 80/20 with the seller — 80% to the seller.

Biggest drawback from the pawnbroker’s point of view: He has to sniff each shoe.

 

 

Ain’t nothin’ like the real thing

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As Smokey Robinson so wisely taught us long ago.

It appears that the magic of “Pawn Stars” is limited to the actual Gold & Silver Pawn Shop cast, at least if you value the opinion of critic Steve Bornfeld.

There’s a Vegas show called “Pawn Shop Live!” that’s supposed to be a spoof of the top-rated cable “reality show.” Vegas Steve didn’t like it when it opened early this year, and now that it has been revamped, he likes it even less:

Flashing back to the original Pawn Shop Live! at the Golden Nugget in February, I labeled it “an amateurish misfire of major proportions.” Updating to the rewritten Pawn Shop Live! at the Riviera, I amend that to “an amateurish misfire of TITANIC proportions.”

We suggest authenticity counts with tongue in cheek. Much as we like “Pawn Stars” and appreciate how much it has done to enhance the reputation of pawn shops everywhere, life with Rick and the family is not really what pawnbroking is like.

Pawnshops, including our Maui pawn shop, do get fascinating, rare and curious items from time to time, but emphasize time to time. Not all the time, like on “Pawn Stars.”

Here’s a secret: TV reality shows are scripted. And not only that, but a show like “Pawn Stars” has agents who comb the country for telegenic items to “pawn.” The owners, who get a chance to explain their treasures on a big stage, cooperate but those are not real transactions.

The valuation offered by Rick may be authentic,  but it’s all for show not dough.

If you think about it for a moment, you can understand. It costs thousands — in the case of “Pawn Stars” tens of thousands — of dollars to create each minute of program. The producers cannot wait around until the next interesting customer walks in.

Even “Antiques Roadshow,” which does draw thousands of hopefuls to each city it visits, sends out advance agents to recruit good antiques and even arranges to transport the big items (like Federal-period highboys) to the auditorium where the show is taped.

If you want to see a real pawn shop in action, come down to 52 North Market Street any day of the week. But you might have to wait several days for any excitement.

Why they pawn — playing the long iron game

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As we often say here at Kamaaina Loan blog, unlike at the bank, you don’t have to tell us why you want to borrow money. It’s don’t ask, don’t tell at the pawnbroker.

You could call it a sad iron

You could call it a sad iron

But sometimes we wonder, all the same.

From Bangkok, an unusual example of how a customer uses a pawnshop:

It seems he pawned an iron — Lovestar brand — 15 years ago and has been paying interest on it regularly ever since. Since he’s not rolling over the interest, it isn’t a case of owing much more than the iron is worth.

According to the Bangkok Post, pawn shop employee Nattarak Peekklang thinks, “The customer may think that his iron is better kept inside the shop’s safe than at his home.”

Maybe. But he isn’t taking the iron out to use it from time to time then returning it to “storage.” He isn’t even using his iron the way David Copperfield’s old nurse, Peggotty, did in Dickens’ novel, pawning hers for sixpence each Friday and redeeming it each Monday because she never can keep to a budget.

But Mr. Nattrarak follows the international Code of the Pawnbroker:

 

I never ask him why he doesn’t pay it all off at once

 


#maui #mauipawn #mauiloan

Seedy maybe, but not dark

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Reporters who show no interest in the millions of ordinary working people who patronize the nation’s 13,000 pawnshops are endlessly fascinated by the small number of threadbare millionaires who — when down to their last Patek Philippe — do the same.

Few show much evidence of ever having visited a pawn shop themselves.

Kamaaina Loan -- neither dark nor seedy

Kamaaina Loan — neither dark nor seedy

Take, for example, a story that got nationwide exposure yesterday on National Public Radio.

Ashley Milne-Tyte — sounds rather posh, doesn’t she? — of the Planet Money team did a segment about a “new” (not really) sort of pawn shop that caters to the well-off. These shops are not, she said, “dark and seedy” like other pawnshops that deal with the “desperate.”

While traveling around the country, I stop in pawnshops of all sorts. Some are really gun shops that do a little loan business, others are really jewelry shops that take in a small amount of household goods. Others are primarily second-hand goods stores that will buy a gold ring or two.

Most are like Kamaaina Loan, full service lender/traders whose customers are primarily working people. They may need to even out their cash flow (especially if they work on a tourist island where many jobs are intermittent or subject to wide swings in income) but are hardly desperate.

Some pawn shops I have visited are definitely seedy. These tend to be on the outskirts of town, in areas of low-paid work, cheek by jowl with mobile home sales lots, dealers in not-too-new used cars, second-hand furniture stores and apartments and houses that have not been repainted since the Reagan administration. The people they deal with seldom acquire high-quality merchandise in the first place, and what they have to offer for a pawn loan will not impress the likes of Ashley Milne-Tyte.

But dark? Never dark.

#maui #maui gold

Gold: S.O.S.

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There’s a reader forum at the Kitco.com website where followers can discuss Kamaaina Loan’s second favorite subject, the price of gold. (The favorite is our customers.)

Even Kitco describes the recent behavior of the world gold price as “carnage.” The New York market is about to close as this is written, and it looks as if today’s price will be $90 an ounce under where it was (briefly) just two weeks ago.

So the forum asked the S.O.S. question, are the followers going to Stay with gold Or Sell? The unanimous answers were STAY.

In a way, that’s bad news for our Maui pawn shop. If nobody sells gold, what will we do?

Well, we could lend money on gold, and we do that, but sellers are an important part of our business.

Oh. Not only are most of the Kitco Kommenters staying, most are planning to buy more gold! That’s a relief. We sell gold, too.

Thank goodness somebody is buying this stuff

Thank goodness somebody is buying this stuff

 

Kitco is mentioned  because it publishes a moment-by-moment price statement on the Internet, very convenient for pawnbrokers, who need a daily fix of gold info.

Nyah, nyah, Vladimir Putin

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We guess the world — at least the part of it that buys gold — is not afraid that Russia will invade the rest of Ukraine. Gold dropped under $1300 an ounce and has stayed there for two whole days.

7,783 of these per ounce

778 of these per ounce

This suggests that the blip up in the past couple of weeks was due (in part anyway) to war jitters (almost always good for gold if not for anyone else) and now it has resumed its predicted long decline until . . .

$1300 itself is probably not an important price level. It’s easy to remember, and when I was a business reporter nice round numbers were often described as “important psychological marks,” but there’s not much evidence that this works for something that is traded by so many people in so many countries and in so many currencies as gold.

India is a big market for gold, and the $1300 price point in dollars does not work out to a round number of rupees. In fact, it’s 77,831 rupees.

Like a deer in the headlights

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Iraq has purchased 1.1 million — yes, MILLION — ounces of gold, according to Kitco.

Some of Kamaaina Loan's gold inventory.

Some of Kamaaina Loan’s gold inventory.

Analysts speculate that this quiet buying helped support the world gold price recently. Shucks, we thought it was because the world was afraid Vladimir Putin was starting World War III.

In any event, if Putin spooked the market, that’s over. Gold was back down to $1312 in New York today. It had nudged up to $1380, which was $100 an ounce higher than at the beginning of the year.

That’s a gain of nearly 8%. All gone now.

Here at Kamaaina Loan, we feel like we imagine a deer feels in the headlights — transfixed but helpless to do anything about it. For our Maui pawn shop, transactions in fractions of ounces are our bread and butter. A  purchase or sale of 10 ounces would be a red letter day.

We, of course, like to see the price of gold go up. We have a sizable amount of gold in our jewelry store at 98 North Market St., so rising prices make that more valuable. Even more important, if gold goes up, we can lend our pawn customers more, earning more interest for us.

If the smart money is right, though, the trend is not in our favor. Goldman Sachs and Societe General, big playas, are looking for an average 2014 price as low as $1225. Bloomberg News reports:

Bullion, which slid last year by the most since 1981 as some investors lost faith in the metal as a store of value, rebounded 9 percent in 2014 as the global expansion faltered and tensions escalated in Ukraine. Those bullish influences are “transient,” and the U.S. economy will recover from a weather-driven slowdown, pushing gold lower, Goldman’s Jeffrey Currie reiterated in a March 20 report.

Since the year is already almost one quarter over, it will take a 6+% decline just to get to $1225. To get to an average of $1225, the bottom price would have to go lower still.

What can we tell you? If you want to sell or pawn your gold jewelry sometime this year, Goldman Sachs thinks you should do it now rather than later.

We have no idea.

Pawn shops take over the Big Apple

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According to an article in Crain’s New York Business, there are now 493 pawnshops in New York, up by 50 percent (when you include secondhand dealers) since 2010. The big growth is in high-end pawnshops, which cater to the pawn-my-Picasso set.

Blogging for gold -- what we do at Kamaaina Loan blog

Blogging for gold — what we do at Kamaaina Loan blog

This from CNBC’s Robert Frank, who blogs about “Wealth.” He opines:

I could understand why the wealthy needed pawn shops in 2009 and 2010. But with stocks and other asset values so high, and with the wealth of the wealthy back to all-time highs, I’m having a hard time figuring out just who these cash-strapped “rich” are today.

Huh. He must not know many wealthy people. For every one who can plunk down cash for a McMansion, there’s another whose assets are tied up in lettered (temporarily unsalable) stock; stock options; real property; or otherwise something that they feel reluctant to liquidate.

Like gold. Gold has been rising for a few days (thank you again, Mr. Putin!), but it is still no higher than $1,356. While that is a pleasant $25 an ounce more than it was 30 days ago, it is an unpleasant $300 or $400 less than it was if you bought gold a year or two ago.

Lots of people (we surmise) who bought gold for the long term, and still expect that to pay off, would rationally be willing to pawn their gold to meet current obligations, rather than realizing their losses, and be able redeem it next month (or 2 months) and keep on keepin’ on with their long-term strategy.

Even people who bought gold last May when it dropped near $1,200 and would therefore show a profit if they sold today might still expect plenty of upside and be reluctant to sell out now and miss that.

The reputation of pawnshops as the resort of the desperate is not incorrect. In fact, our Maui pawn shop takes pride in being willing to help desperate people who no one else will deal with.  But most of Kamaaina Loan’s customers are not desperate.

Fingertips -- no good for paying your utility bill

Fingertips — no good for paying your utility bill

Typically, they are evening out cash flows. If you are a person who works for a fixed wage, life would be very different if you were in the visitor industry and saw your income yo-yo up and down with the seasons.

MECO bills tend to run around the same amount each month, and MECO wants to be paid each month, even if some months your tips or commissions drop to almost nothing.

 

Yes, we are regulated, duh

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It seems the Michigan State Police raided a “pawnshop,”  and now the “pawnshop’s” “customers” are

  wondering if they will ever be able to buy their items back.

Aside from the evident confusion of the Fox reporter — pawn customers do not “buy back” their collateral, they repay a loan and redeem it — this story does raise some questions. The “pawnshop” was (allegedly) operating without a permit. That means, we suppose, that the “customers” were without the protections that regulations provide for real “customers” of real “pawnshops.”

Just hanging out a sign doesn’t make you a pawnbroker, any more than  hanging out a shingle makes you a lawyer or a doctor.

The story does not say low long the “pawnshop” operated without a permit, or whether it had any sort of business license at all. In other words, was this a totally fly-by-night operation, or was it an example of a (more or less) legitimate business that crossed the line into pawnbroking unintentionally?

 

We have been around long enough for our guardfish to get huge

We have been around long enough for our guardfish to get huge

Generally speaking, you shouldn’t have to check the Business Registration division of the Department of Commerce and Consumer Affairs (in Hawaii, or whatever the equivalent is in Michigan) before doing business; although maybe that wouldn’t be such a bad idea. Our Maui pawn shop has  been in business at the same location for decades, so you can assume — and you would be correct — that it has its proper licenses and is supervised by (among others) the Maui Police Department.

A pop-up shop that hasn’t been around for long, all assumptions are chancy.

Before you pledge your wedding ring — we will assume here that it has both sentimental value and precious metal value, and the sentimental value might be higher than the gold value — maybe you should check DCCA for complaints. Just because a pawnshop has a license doesn’t mean it also has a good record of complying with the mandatedc hold perios (15 days on purchases, 60 days on pawns). We know of a local pawnshop (not ours) that has been sued — more than once — because a customer went back to redeem a pledge and discovered that it had been sent to the smelters.

Pawnshopsa are not the only businesses where people leave  valuable property and expect it will be there later when they want it — banks, escrow companies, stockbrokers, property managers  and storage companies come to mind in this respect. Think Bernie Madoff.

The adage, know who you are dealing with, applies across the board.