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Slumping economy drives pawn shop sales
The recent economic decline has hurt many businesses in Loudoun County, but some are thriving in current economic conditions.
For the past 18 months or so, business has been booming at Leesburg Pawn.
Owner Tim Davenport said the downturn in the economy has boosted the success of the pawn shop, with more people coming in looking for some extra cash.
Stephanie Sumner, of Hamilton, recently brought in her PlayStation II and some games to sell. "I don't play them, and I need a little extra money," she said.
She said it was her first time in the store, and she would put the extra cash toward gas.
Davenport said this is typical.
"It's the economy. ... It's the housing market going down," he said. "The price of gas has gone up and everything costs more. It's hard to get by."
Davenport has had about 20,000 people sell or pawn items at his store since 2001, and that number is steadily climbing.
Leesburg Pawn allows people to sell items or put them in storage for collateral loans. A collateral loan is a loan against an item for a monthly fee. The item can be repurchased at any time for a higher price.
Davenport said he has noticed an increase in the amount of jewelry coming in, often for collateral. He's also seen an increase in the number of people who don't come back to pick up their items.
On a recent afternoon, a customer dropped off three rings. Davenport handed her $225 to hold them for 30 days. She can come back at any time and buy them back for about $50 more.
But once her 30 days have expired, she'll have to pay again to keep them in storage for another month, or they'll go out on the floor for sale.
Davenport said the housing market crash also has sent people through his doors.
"I've seen people who come in and sell stuff to make that first escalated payment," he said. "With mortgages the way they are, I think I'm seeing an increase in divorce too."
Divorce and other domestic disputes often send valuables to the pawn shop, he said.
Leesburg Pawn also benefits from the fact that with money so tight, more people come in to the store to save money on items like jewelry, DVDs, tools and electronics.
"In every city, there are flea markets," said customer N.M. Henry, a Leesburg resident who often comes to the pawn shop to look for good deals. "The pawn shop is the everyday open flea market."
Davenport said, "Our sales are pretty steady. We have better prices than those stores at the malls.”
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