Why pawn is so popular

It’s official – pawnshops are back in business, but with a difference. Forget the images of Andy Capp off to pawn an item which he might never get back. Instead, think of the well-heeled who are flocking to high cost pawnshops in droves.

So what’s the attraction? Well, pawnshops offer quick and easy loans with no credit checks and no hanging around. Just take in your item, agree a price and walk out with cash. Then all you have to do is come back within the stated period to pick it up again.

Most people think that pawnbrokers make their money from selling on unredeemed items, but that’s not true at all. In fact, most pawnbrokers have lots of repeat business from people who pawn and redeem, pawn and redeem, pawn and redeem. And since the business went legit, even if they sell an item, pawnbrokers are only allowed to recover their costs. Any extra has to be sent to the person who pawned the original item.

Interest on pawned items can be as high as 7 per cent a month, but that may seem a small price to pay for the lure of quick and easy cash. Pawnshops now also offer cheque cashing and other financial services, which people with poor credit might find attractive.

But what’s the reason for the influx of well-off customers. Well, if you’re out shopping for property at the weekend or need to slap down a deposit on an auction item, going to the pawnshop can be the quickest way of getting hold of your cash.

The pawnshop industry has operated under the Consumer Credit Act for some time and is now regulated by the Office of Fair Trading, so it’s now squeaky clean, with not a dodgy item in sight. And it’s very profitable too, with some pawnshops seeing their loan books increase by more than £1 million in a quarter. Pawn, anyone?