Pawn shop popularity on the rise

MOBILE, Ala. (WALA) - The owner of Holly’s Pawn Store, Tom Morgan, said he is in the business of collateral banking.

"We’re an old profession. We've been here a long time, so when somebody needs a little bit of money they do come to see us," said Morgan.

It's not just to sell personal possessions though. Shop owners said more and more people go to pawn shops to borrow cash.

Morgan is not the only one who has seen the trend. Pawn shops across the port city said these new-wave banks have become a popular alternative.

“Right now, people are pawning more because we are in between income tax and Christmas, and school started, so people are getting money for school supplies,” said Chris Smith, co-owner of Port City Pawn in Mobile.

Dealers said pawn shop popularity has sky-rocketed since the great recession. Many however agree that after so many years, the recession is starting to take a toll on their business.

“At the beginning of a recession you do fairly well,” said Smith. “People start pawning that have never pawned. People shop at pawn shops that have never shopped at pawn shops. A recession is good for a year or two, but after that you start running out of nicer things.”

Pawn shop dealers said there is one item they see more often these days: gold.

Whether it's selling, pawning or buying gold, shop owners said it means big business.

“The gold market is going up, so we see lots and lots of jewelry. It's old stuff and even stuff they bought just a year ago,” said Morgan.

"Not that long ago, gold was $400 an ounce, and now it's $1,600 an ounce. Thats a big difference,” said Smith.

The current price of gold is a record in terms of dollars. The price of silver and platinum have also gone up over the years.