PHOTOS: Pawn shops now a bigger gold mine for people needing fast cash

Gold Store Plus Moore owner Gary Moore, right, determines the quality of two gold chains and a crucifix owned by Naples resident Adrian Gonzalez, left, at the gold buying store on Wednesday, July 28, 2010 in North Naples. David Albers/Staff

Photo by DAVID ALBERS // Buy this photo

Gold Store Plus Moore owner Gary Moore, right, determines the quality of two gold chains and a crucifix owned by Naples resident Adrian Gonzalez, left, at the gold buying store on Wednesday, July 28, 2010 in North Naples. David Albers/Staff

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— Halfway through a job building custom shelves for a customer and in need of a quick infusion of cash to finish his work, Mike Rupp turned to an old standby — Capital Pawn in Bonita Springs.

Rupp, a 37-year-old contractor, made four stops at the shop the last week of July, pawning a guitar and some fishing poles so he could pay for paint, a paint sprayer, and other supplies to finish his job.

When he gets paid for the work, he will head back to Capital Pawn to retrieve his items, just like he always does.

“I’m a single father,” Rupp said. “I have to put food on the table. I’ve got to do what I’ve got to do.”

Rupp said he’s been going to the pawn shop on and off for about 18 years — the first time being when he needed cash for a date. But as a contractor, Rupp was hit hard by the economic downturn, and during the past few years has been doing more pawning to make ends meet.

He’s not alone.

Records maintained by the Collier County Sheriff’s Office show that the number of pawn and secondhand dealer transactions have about doubled since the beginning of 2006 in Collier County, and continue to increase despite claims by some economists and government officials that the economy is in a slow recovery. There were 5,173 transactions in January 2006 and 3,573 in February 2006 compared to 9,911 in June 2010.

When looked at in total dollars, pawn and secondhand dealer transactions have almost quadrupled in Collier County during that period, reaching $234,346 in February 2006 and $890,069 this past June.

Records maintained by the Collier County Sheriff’s Office show that the number of pawn and secondhand dealer transactions have about doubled since the beginning of 2006 in Collier County, and continue to increase despite claims by some economists and government officials that the economy is in a slow recovery. There were 5,173 transactions in January 2006 and 3,573 in February 2006 compared to 9,911 in June 2010.

* * * * *

When looked at in total dollars, pawn and secondhand dealer transactions have almost quadrupled in Collier County during that period, reaching $234,346 in February 2006 and $890,069 this past June.

“Some people do it every month or every two months. They’ll pawn that same watch and use it kind of as a cash advance to get them by until their next paycheck,” said Lt. Chad Parker, of the Sheriff’s Office’s Financial Crimes Bureau.

In addition to the down economy, people in the industry also point to the skyrocketing price of gold as a significant factor contributing to the increase in secondhand transactions.

As part of his job, Parker monitors the transactions of Collier’s 10 pawn shops and nine registered secondhand dealers. Most of the secondhand dealers — jewelry stores and gold-buying outfits — weren’t buying a few years back, and some didn’t exist at all.

Because of all the new people buying gold, including some who may not be reporting correctly, some in the industry believe Parker’s numbers are low.

“Probably once every week we’re getting an inquiry from a gold company looking to start up in Collier County,” Parker said.

Lender of last resort

Even when banks aren’t lending money, Tom Sams is.

As the president of Capital Pawn, which has eight shops in Southwest Florida, and chairman of the United Pawnbroker Group of Florida, Sams, 70, has had a bird’s-eye view of the economic downturn that has hobbled the region. In addition to pawning — loaning money toward capital — pawn shops also buy and sell items such as jewelry, tools, electronics, DVDs, etc.

“We are the bank for people that need cash immediately, especially for those that have collateral to pledge so that it is not risk for us,” Sams said. “We can do a loan immediately.”

From his perch, Sams doesn’t like what he sees, and doesn’t buy claims that the economy is in a recovery.

A collection of gold jewelry is sorted by karats awaiting to be sent to a gold refinery at Gold Store Plus Moore in North Naples. David Albers/Staff

Photo by DAVID ALBERS // Buy this photo

A collection of gold jewelry is sorted by karats awaiting to be sent to a gold refinery at Gold Store Plus Moore in North Naples. David Albers/Staff

“We’re now into people that are coming in here substantially that are middle income, and also the wealthy,” Capital Pawn president Tom Sams said. “They’re the people today that are in need of capital, and it doesn’t take a lot, even for wealthy people, to get into a bind.”

“The frightening thing is, our industry feels ... that we have not seen the end of the decline,” Sams said. “We deal with the people every day. I mean, you can look at the stock market and say, ‘Oh, things look great.’ But when you deal with the people one-on-one, it’s not so good.”

People typically take loans from pawn shops to make ends meet — to buy gas or put food on the table until their next paycheck. Prior to the downturn in 2007, Sams said his average loan was $89. Since then it has about doubled, he said.

Sams hasn’t noticed an increase in defaults.

Sams said he’s had fewer new customers since the downturn, but the customers he does have are borrowing more. And the new customers are of a different stock.

Like other pawn shop owners the Daily News spoke to, Sams said he’s seeing fewer customers on the lower rungs of society. Previously they were some of his primary customers, but now they “have nothing to borrow money with. I mean they’re done,” Sams said.

“We’re now into people that are coming in here substantially that are middle income, and also the wealthy,” Sams said. “They’re the people today that are in need of capital, and it doesn’t take a lot, even for wealthy people, to get into a bind.”

Rupp said he has seen a new clientele at the Capital Pawn in Bonita Springs.

“There’s a whole new group of people going there; older men, older ladies, people selling their heirlooms, jewelry,” he said.

Parker monitors pawning and second-hand transactions by known criminals, and keeps an eye out for people who pawn or sell a lot of new, in-box items — a strong indicator of shoplifting.

Despite the downturn, cases of defrauding a pawn broker have remained relatively flat in Collier County, with 31 cases in 2006; 37 in 2007; 53 in 2008; 35 in 2009 and 20 through July 8, 2010, according to Sheriff’s Office statistics. Instead, thieves are selling their illicit wares to less-stringently regulated buyers.

“If they’ve been arrested for it in the past, they tend to shy away from going to a pawn shop in the future,” Parker said. “Some do learn from their mistakes.”

The gold explosion

A construction worker by trade, 56-year-old Gary Moore now spends his days inside a bare storefront with a single computer and register near the intersection of U.S. 41 North and Old 41 Road in North Naples.

Standing at the intersection, a young woman wearing denim shorts and a pink tube top over a bikini holds a sign reading “We Buy Gold.”

“They bring us 80 percent of our business,” Moore said of his sign holders.

Facts about the pawn and secondhand dealer industry

■ Secondhand dealers buy used merchandise from customers. Pawn shops either buy merchandise from customers or accept the merchandise on a loan basis.

■ Clients who pawn an item have 60 days to reclaim it with interest, but often extend their loan for 30 days.

■ The maximum interest rate a pawn dealer can charge is 25 percent for 30 days on smaller loans, generally under $100 depending on the pawn shop. The most a pawn shop can charge in interest annually is 304.17 percent.

■ All pawn shops and secondhand dealers in Collier County are required to report their activity to the Sheriff’s Office once a week.

■ Pawn shops must hold merchandise for 30 days if purchased, and 60 days if pawned. During this time the merchandise must not be visible to the public.

■ Secondhand dealers are required to hold items for 15 days before they can sell or dispose of them.

■ Pawn shops and secondhand dealers are regulated under separate statutes in Florida.

By the time Moore moved permanently to Southwest Florida from New Hampshire in 2008, most of the construction work had dried up. But Moore had some money to invest, and ended up in the gold business.

In addition to opening Gold Store Plus Moore in Collier County a couple of months back, Moore also owns similar stores in Cape Coral and Port Charlotte, and is opening a fourth store in Sarasota.

In January 2006, gold was selling at somewhere between $500 and $600 per ounce. Since then, the price has more than doubled, and now is selling between $1,100 and $1,200 per ounce, hence all the gold investment ads on TV and radio. The price of gold is influenced by several factors, including investor activity, the strength of the U.S. dollar, political tensions, oil prices and buying and selling by banks, according to Reuters.

Moore, who is a licensed secondhand dealer in Florida, acts as a middle man, buying gold jewelry and coins from customers, holding it for 15 days as required by law, and then selling it to refineries for a profit. So far, business has been “good,” Moore said.

When asked if he viewed buying and selling gold as a long-term career, Moore said no. He said he intends to be in business for three years, maybe five. It all depends on the economy, the gold market and whether there will be enough people left with spare gold to sell.

“This type of business you can open and close the doors tomorrow because there’s no inventory,” Moore said.

Like pawn shop owners, Moore said he has customers come in every day to sell old jewelry simply to make ends meet.

“We have people bringing in a single item that gives them $12,” Moore said. “It’s because they need food or gas or whatever that is.”

In a way, by providing people with cash, Moore said he feels like he’s helping people in need.

“I didn’t open the store for that,” Moore said, “but my heart generates to that.”

__ Connect with Ryan Mills at www.naplesnews.com/staff/ryan-mills/

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