July 22, 2024

Bucks: An Online Pawn Shop That Seeks to Go Upscale

Pawn shops have traditionally been associated with rundown neighborhoods and shady dealings — think of that violent scene in the movie “Pulp Fiction.”

An online pawn shop, Pawngo, aims to change that perception. But can the site bring a fresh, perky attitude to the inherently depressing tradition of selling one’s valuables out of desperation? “We’re reinventing the customer experience of getting a pawn loan,” said Todd Hills, the site’s co-founder and chief executive.

Mr. Hills, who spent years in the brick-and-mortar pawn business, said online pawning appeals to more affluent clients — or at least, clients who were once affluent but may have hit a rough patch in a tough economy — who may never have set foot in an actual pawn shop. Credit is tight for traditional bank loans, but upscale customers have expensive watches and jewelry they can use as collateral for a quick cash infusion on Pawngo.

The company operated for about a year in a different iteration but restarted early this year as Pawngo, with a redesigned Web site and financial backing from the investment group Lightbank, which is run by the co-founders of the deal site Groupon.

Here’s how it works.

You enter a description of your item, ideally with a digital photo, as well as your contact information on the Web site, and Pawngo sends you a preliminary loan offer. If you accept it, you provide other information — like a copy of your driver’s license and your date of birth — to verify your identity. Then, you print out a FedEx label and ship the item to Pawngo (it pays for shipping and insurance), where it is assessed to prepare a formal offer, typically, a percentage of the assigned value. If you like the offer, Pawngo stores the item and wires the cash to your bank account. The site will also offer to buy the item outright, if you prefer.

If you pay back the loan on time, your item is returned to you. If you don’t, Pawngo keeps it and resells it. (Right now that may happen on eBay, but a companion sales site for reclaimed items is in the works, Mr. Hills said).

The company makes loans for as little as $250 or as much as $100,000, but the average so far is $2,000, Mr. Hills said. (A running total on the Web site says the company has done more than $1.5 million in transactions to date, on items like Nikon cameras, Rolex watches and Louis Vuitton bags.) Terms are for three to six months (most pawn shops allow just 30 days), at a maximum of 6 percent interest. That can add up. Recently, a real estate agent pawned expensive jewelry in exchange for $2,500 to repair her car, Mr. Hills said. Her interest amounts to $150 a month, or $450 — a fifth of the loan amount — if she keeps the loan for three months.

The benefit, Mr. Hill said, is that she was able to get the money quickly, fix her car and keep working. A local jewelry store might have sold it on consignment for her, but that wouldn’t have produced the money quickly enough for her car repairs. Assuming she pays back the money, she’ll not only be able to earn commissions driving clients around to see houses but also to have her items returned to her. “We solved a huge problem in this person’s life,” he said.

Other customers include a woman who pawned her engagement ring to finance the start-up of a nonprofit group to promote children’s Internet safety, the company says.

There’s no getting around that for most people, pawning is a last resort. But at least, Mr. Hill said, it’s one that won’t put you into debt or hurt your credit rating. There’s no credit check involved in pawning — just handing over your family heirlooms.

Would you ever considering pawning an item online?

Article source: http://feeds.nytimes.com/click.phdo?i=3ad33d746a5ef9525e913467343347f4

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