Randy Cohen, co-owner of Royal Redemption, a downtown pawnshop, has never seen anything like the current parade of cash-strapped customers forced to sell their stuff.
"Anything people can possibly get ahold of to bring in to pay their mortgage and get gas in the car, they're doing it," he says. "I actually have lines when I open at 9. The economy just fell apart, and people really need cash."
Want a 30-foot boat? Cohen has one. A big diamond? Cohen has plenty. Two Segway scooters? No problem. Many of his new customers are once-wealthy suburbanites. "They're so embarrassed when they come in here," he says.
The miserable economy is a boon for pawnshops and consignment stores across the USA. The National Pawnbrokers Association does not track trends, but managers say they're seeing lots of first-time customers who are feeling the pinch — and new bargain-hunters who are looking for used jewelry and other high-end items at reduced prices.
At Charleston Gold & Diamond Exchange in Mount Pleasant, S.C., manager Brandon Burke says the number of customers selling gold and other precious metals "has skyrocketed." Gold sells for more than $700 an ounce. Firearms and electronics are also popular.
"You're looking at some desperation and some people who are taking advantage of the market," Burke says. "Anything that's collecting dust is getting melted."
It's the same story in Portland, Ore. Blake Swearingen, sales manager at Silver Lining Jewelry & Loan, says his clientele includes new "middle- and upper-income people who … due to mistakes they've made or the environment, need to find ways to take care of their responsibilities."
Dealing with customers who are sometimes reluctantly selling their possessions "takes tact and explanations," Burke says. "It's untread ground for a lot of people."
Louise Wright never thought she'd be lining up at a Chicago hotel to sell her son's long-neglected coin collection and the silver utensils she inherited from her grandmother to a company set up in a conference room for a few days to buy such belongings.
"I'm embarrassed," says Wright, 59, a retired nurse, "but not too embarrassed to do this. I have no use for these things, and to be honest, with Christmas coming up, I need the money."
Daniel Lebovitz, manager of Chicago Pawners & Jewelers, sees more people in that predicament. He's also noticed that the redemption rate — the percentage of people who reclaim their pawned goods — has dropped from its usual 65%. His store is jammed with jewelry, iPods, guitars and TVs.
Dealing with people who are parting grudgingly with prized possessions or family heirlooms is difficult, Lebovitz says. "I always tell people, 'Before you do it, take a second,' " he says. "I try to have a lack of all emotion, though. You'd be out of business if you worked on emotion."
Joseph Barats, president of Chicago's Fullerton Pawners, sees plenty of emotion. "Day in and day out," his customers include people who are selling their grandmothers' jewelry and other precious heirlooms, he says.
Barats is asking $500 for a mink coat priced at about $10,000 when it was new. It was pawned for $200 by a well-dressed woman who said she'd be back for it, but never returned. "She said she needed the money," he says.
Luxury goods for cheap
People accustomed to buying the best also are making their way to Cynthia's Consignments in Chicago, says manager Simone Hale. A $4,000 Gucci handbag can be had for a bargain price, she says. A woman who was recently laid off brought in a pricey pair of Christian Louboutin shoes. "She needed the money," Hale says.
Those sorts of bargains are attracting a growing number of upper-income customers who want luxury goods but won't — or can't — buy them at retail prices, Hale says. "Everything's going very well for us," she says. "The bad economy is good for business."
Reyna Kulinski, 61, has changed her behavior because of the sagging economy. She brings gently worn items to Cynthia's to be sold and urges her daughter Lauryn, 20, to do the same.
"I'm not shopping at all," says Kulinski, a retired flight attendant who works for the Census Bureau.
Kulinski did go shopping recently for something to wear to a wedding. "It was all full price, and I didn't buy anything," she says. She borrowed a dress from a friend.
Cohen expects frugality to benefit his business for the foreseeable future.
Even though it's good for the bottom line, he empathizes with his new customers. "I feel so bad for them," he says.