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In recession, pawn shops fill up on jewelry, tools -- and stories

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The Orlando Sentinel (MCT) - Twenty years ago, Trent Dale jumped out of an airplane to earn a nickel-sized military pendant of 14-karat gold.

Highlights

By Jim Stratton
McClatchy Newspapers (www.mctdirect.com)
3/2/2009 (1 decade ago)

Published in Business & Economics

Last month, he walked into a pawnshop and traded it for $20 cash.

"That's gas money that'll get me up to see my son," said Dale, an Army veteran from Orlando with a barrel chest and imposing biceps. "You want to hang on to mementos, but life goes on."

As more people feel the pinch of a contracting economy, pawnshops are seeing a different type of customer. Instead of the chronically under-employed, these are folks like Dale _ people who a year ago were on stable, if not gold-plated, financial footing.

They had decent jobs and a little money left at the end of each month. But as the economy slid into a spiral, they got dragged down with it, leaving them scrambling to pay the bills. Many have turned to their neighborhood pawnshop.

"What's changed is that people are desperate," said Ron Luttrell, owner of Diamond Pawn in Orlando. "They're trying to pawn anything they can."

The evidence covers the walls and floor at Lee's Pawn and Jewelry on Colonial Drive in west Orlando. The shop sits in the shadow of a billboard hawking Krystal fast food and Tanqueray gin.

Richard Palmer has owned the shop for almost 25 years, having taught himself the business after leaving mobile-home construction.

Today, he sits in a forest of professional-grade drills, power saws and air compressors pawned by out-of-work builders. Six flat-panel televisions are tuned to six different stations. A banjo leans in a corner just below a set of steel drums.

A bank of display cases is packed with gold chains, rings and watches. Palmer is seeing plenty of those nowadays, as laid off white-collar workers look for new ways to make ends meet.

"We're seeing people who live in better sections of town come over here," Palmer said.

Some look "a little embarrassed," he said. "They don't want to be seen in a pawnshop."

He has also noticed an uptick in the amount of stuff people never reclaim. Two years ago, about 40 percent of the items became his property to sell. Now it's up to about 75 percent.

That creates its own problems for the pawnshop dealer.

"We've got more stuff than we can (get) rid of because people aren't buying," Palmer said. "The store is full, the back room is full. I've got a storage unit that's filled.

"We used to take whatever came through the door. We're getting very picky now."

Pawnshop transactions take two forms.

If customers need quick cash, they get a loan and leave the item behind as collateral. When they're flush again, they return to the shop, repay the loan plus interest and pick up their property. Some dealers will hold an item almost indefinitely if an owner pays a monthly charge. That prevents treasured belongings from being sold, but it comes at a price.

Last month, for example, George Green scraped together $140 to reclaim two diamond rings he had pawned two years ago. He has been paying about $30 a month, he said, to ensure they weren't sold.

"I know. I know. It doesn't make any sense," said Green, 62. "But we didn't want to lose them."

Lately, many customers are just looking to cash out. That's what Dale did with his medallion.

The 43-year-old father of two said he was laid off from a management job in October and since then has struggled to make ends meet. He lost his SUV _ he's driving a Chevy Cavalier _ and earlier pawned a PlayStation 3.

The $20 he made last month was going straight into his gas tank, he said, so he could visit his son in Leesburg, Fla. The boy lives there with his mother.

"Just getting around is expensive," Dale said.

He still smarts from the layoff, saying he'd been with the company almost 10 years. When he was let go, he was a manager with a benefits package. Now he's working as a security guard and has no health insurance.

"I was doing great," he said. "But the economy just got everybody."

Diamond Pawn's manager Bud Schreiber knows the story by heart _ only the faces and the pieces of property are different.

In this downturn, Schreiber has taken in Jet-Skis and motorcycles. People have used the money to pay for everything from school supplies to mortgages.

Last month, Schreiber took in a 600-pound, stainless-steel mixing machine worth about $3,000. A restaurant owner brought it in because he needed quick money and was temporarily shutting down.

"He's been hurt just like everyone else," said Schreiber, who works the counter with a pistol on his hip. "But he wants it back. He's going to try and hang in there and start up again."

___

© 2009, The Orlando Sentinel (Fla.).

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