New Yorkers are rummaging through their jewelry boxes and taking the findings to local pawnshops, swapping gold for cash to make ends meet.
The economic recession, high unemployment and rising gold prices have meant booming business for pawnshops nationwide.
“Everybody and his brother who owns a shop is buying gold,” said Steve Wohl, an employee of Modell Pawnbrokers. “We’re seeing an increase of people who want to sell gold, as well as people who want to borrow money.”
Gold trading has reached an all-time high. According to Goldprice.org, gold rose to $1,483 per ounce April 15. Stock values of the three publicly traded pawnshop companies—Cash America International, First Cash and EZ Corp—have also increased since 2009, according to Nasdaq.
The National Pawnbrokers Association reports that U.S. pawnshops brought in 30 million customers in 2010. Most of these patrons earn an annual salary of about $29,000, but even some of the country’s most affluent have cashed in their goods.
“I’ve been seeing more higher end clientele coming in during the past few months and that could be because of the economy and times are hard,” said Lauren Kaminsky, who works at EZ Pawn Shop.
Yet some American consumers steer clear of pawnshops for fear of being shortchanged.
“They take advantage of people because of the way of the economy,” said Richard Garcia of Harlem. “When the economy goes bad, pawnshops pop up all over the place. They’re in the business to make profit from you, not you profit from them.”
Keeping tabs on the city’s 200 licensed pawnshops can be a challenge; most are not publicly traded companies and therefore are not required to report their earnings.
Still, each store must obtain a license from the city’s Department of Consumer Affairs, a policy that keeps most storeowners in check.
“We don’t sell guns, we don’t rip people off,” Kaminsky said. “We’re not trying to scam anyone and we really do help the communities that we’re in.”