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  • Current Industry Trends – Pawn Industry

    Current Trends for the Pawn Industry

    Hello to all of our Pawn Family!

    Jerry Whitehead here from the Pawnshop Consulting Group and I am delighted to be able to provide some introspect as to what we are witnessing in the Pawn Industry today and how it is currently trending.

    AS many of you know, we have serviced hundreds of clients in our history around the world and DO have our hands on the pulse of the industry in real time.

    We have many active clients in the USA that participate in our subscription services that PCG and PawnTrain service, and as a result we are monitoring all of our active client’s metrics in real time and are up to date on the trends we are monitoring, witnessing, and reporting on.

    I am going to provide all of our readers out here a brief overview of the current trends as we see them with some brief footnotes.


    It should be denoted that the USA is experiencing the highest inflation rate the country has witnessed in more than 40 years according to the experts.

    AS a citizen, I am also confused on how they calculate these trends because what I am seeing, as are most of you makes absolutely no sense!!

    Gas had doubled in price here recently, and I noticed eggs in our local superstore have gone up 3 – 4 X in price that they were a year ago, and beef and other products have gone up dramatically as well.

    As a consultant I do a lot of traveling, and airline tickets for many destinations have increased dramatically, in most case by more than 25% for what used to be routine stops for my growing global consulting business along with hotel rooms.

    Inflation has risen at a rate far faster than income has for a broad spectrum of our citizens and our customers.

    AS most all of us know, the Pawn Shops are one of the first bell weathers of what the economy is doing and here is what we are seeing in trends today.

    Cash Demand

    The demand for cash in the US markets is on a steep incline. We are seeing loan dollars and store level buys from customers moving upward in the last 90 days at a faster pace than the first 5 months of this calendar year.

    Current industry averages for medium size pawnshops dealing in general merchandise and operating in higher yield markets (20% + in Pawn Convenience Fees) are seeing AVG loan balances currently up about 24% as an average since January 1 of this year.

    Customer buys are moving up as well, as more people are just dumping their goods knowing they are unable to service a new loan or loans at all. Buys on AVG thru July of this year are up about 20% as a floating AVG.

    We have been informing the industry and certainly our clients, we can continue to loan or buy (A) goods at the upper end of the spectrum, we are advising to pull back on (B) goods and perhaps only lend on those types of goods to preferred or well qualified customers in regards to (B) goods in general.

    This is coupled with a steep to a complete halt on all (C) goods together unless they are pure courtesy loans or other.

    Default Trends

    With the loan trends just described, we are seeing default rates increasing in the US Markets as well. The current default trend averages for our groups of stores as described are seeing default trends on AVG up about 19% from January 1 and trending upwards.

    With the increases in defaults, inventory levels are growing, aging inventory is also moving up at a more rapid pace for many.

    Here is a snapshot of just one client, and the range of aging inventory and increases overall in just the last 90 days:


    Aged Inventory 180 days+>  $            150,654.73 Aged Inventory 180 days+>  $            163,908.47 Aged Inventory 180 days+>  $            171,555.87
    % of Aged INVTY: 55.10% % of Aged INVTY: 62.32% % of Aged INVTY: 60.88%


    Unfortunately – many operators do not place enough emphasis on liquidating overstock and or aging inventory and it’s catching up to many operators out there.

    Too few operators understand the concept of inventory yields VS margins, and as a result, get hung up on price margin, VS turning the inventory and increasing their overall inventory yields. Too many are also just in LOVE with their inventory VS cutting it loose.

    I should footnote that eliminating inventory is and remains pricing.

    If operators placed a sign in front of their store(s) indicating everything in the store is $10,000 each, the operator will probably sell nothing at all. For the same if the same operator put out a sign out front, everything in the store(s) is one cent each, everything in the store(s) would be gone in theory.

    Translation, price has everything to do with eliminating inventory period.

    If your much needed capital is sitting in a lot of inventory, your ability to move it and convert it into cash is based purely on the prices you are willing to take for it!

    There are 3 types of operators in this industry from my experience: retailers, collectors, and hoarders.

    Which one are you?

    We are seeing cash tightening up for many pawnbrokers and we are now working with several groups that are offering funding to groups that may be struggling with capital requirements as a result. (Pawn Specific)


    AT the end of the day – we need to be dumping aging inventory, overstock inventories, qualifying our customers at the next level, keeping loans and layaway payments current and monitored at all times, minimizing non-essential expenditures, hoarding cash and liquidity, and hunkering down for what is coming – which is an unknown I might add at our current pace of lunacy at the helm(s) today.

    I recently heard one of my Wall Street focus groups indicate that what is coming was described this way:

    “Were on a high-speed train heading to the Grand Canyon quickly and there is no bridge ahead”

    I believe the translation could be – we are heading for some significant longer term economic turmoil, coupled with more unrest in the streets and cities across America as more desperation sets in, and criminal behavior continues to run amuck in our country.

    Recession coming, click here!

    Self-Storage Financing Strategies to Hedge Against the Next Recession ...


    AS one last foot note, please be conscious of your environment, practice all safe behaviors, be cautious, be courteous, help your customers as best you can, seemingly those who yield truly good Karma, are less likely to be targeted by some of the chaos going on across the streets in America today.

    God bless all of you, and God bless the Pawn Industry!

    Jerry Whitehead

    Pawnshop Consulting Group, LLC.

    Alan Nelson – PawnTrain