BEVERLY HILLS PATCH - Turn Unwanted Bling Into Much Needed Cha-Ching
via Beverly Hills Patch
The price of gold is high so now’s the time to sell that gold at the bottom of your jewelry box.
By Sharon Cotal | April 28, 2011
With the price of gold skyrocketing and the economy tanking, many people are looking through their jewelry boxes for items to trade for some cold, hard cash.
“We see everything from the things that have been in the bottom of the jewelry box to some very significant pieces,” said Bryan Abbott, owner of Los Angeles Gold & Silver on North Camden Drive in Beverly Hills. “We’ve seen Tiffany’s, Van Cleef & Arpels and Bulgari coming in with everything else because the price of gold is so high.”
The one ounce spot price for gold as of Tuesday was $1,505, according to Abbott. That’s 25 percent higher than this time last year and three times as high as it was in the 1980s, which is the last time the price of gold experienced huge increases, he said.
“I put someone’s gold on the scale and I think, ‘That can’t be right—it can’t be that high,’ so I do it again and I find out I was right,” Abbott said. “It really is that high.”
Unlike 30 years ago, Abbott believes the current gold market is much more solid and long-term.
“In the 1980s, the market rose and fell very quickly,” he said. “But this market has been gradually rising and I think these prices are going to be around for a while.”
Jordan Tabach-Bank, CEO of Beverly Loans in Beverly Hills, known as the “Pawnshop to the Stars” because of its elite clientele, has also seen an increase in the number of people coming in to sell their gold jewelry.
“Gold has been higher than ever for a number of months now, but when it broke $1,500 per ounce people started emptying out their jewelry boxes and selling jewelry that they no longer want or need,” Tabach-Bank said. “Also, there are people who have a financial need who bring in their jewelry—not to sell it—but to get a collateral loan on it.”
While Beverly Loan oftentimes caters to high profile individuals, Tabach-Bank sees clients from all walks of life. He recommends that those thinking about selling their gold jewelry or other gold items go to a reputable gold buyer where the scales are properly calibrated and the seller will be treated fairly.
“Everyone is trying to get into the gold-buying business because of the price of gold,” he said. “But people need to go to those who have been doing this for years and are licensed and reputable.”
Pawnshops Go Upscale and Online
With more middle-class borrowers looking for cash, pawnbrokers are cleaning up their image.
By ANNE KADET
When Jim De Lisa’s chain of six furniture stores went belly-up midrecession, the New Jersey father of five found himself in a fix. He was suddenly unemployed and broke, and his credit score, he says, was “in the crapper.” Pushed to the edge by looming house and car payments, he did the unthinkable: He pawned his wife’s $18,000 engagement ring. But no one ever saw him visit the pawnshop De Lisa hocked the 1.7-karat stunner over the Internet.
Is no industry immune to the inexorable forces of technology and gentrification? These days, even the pawn business is going upscale. Pawn merchants say the recessionary credit crunch is bringing in more middle-class clients along with small businesses seeking collateral loans to meet payroll. Jordan Tabach-Bank, CEO of Beverly Loan Co. in Beverly Hills (“Pawnshop to the Stars”), says he’s seen a flood of doctors, lawyers and accountants hocking valuables to keep their kids in private school. There’s a pawn store reality show airing on the History Channel and an iPhone app to help high-tech indigents locate the nearest pawnbroker. If the trend continues, hocking the family jewels may become as mainstream as applying for a credit card.
While pawnshops still charge eye-popping interest rates (up to 25 percent in some states), the once shady industry is rapidly going Disney. Pawn consultant Steve Krupnik says the sector’s three publicly traded chains took cues from traditional retailers, deploying clean-cut employees, suburban locations and efficient technology. “They’ve forced the marginal operators to clean up,” he adds.
Some of the nation’s 13,000 pawnshops lure the (formerly) affluent with private appointments and house visits. In New York, EZ Pawn, an eight-store chain, is placing ads in local magazines. Pawn magnate Craig McCall, whose 13 Oregon and Arizona locations are in traditional shopping centers (two are in former Hollywood Video stores), decorates some shops with wainscoting and leather chairs at the loan desk: “There’s no bars anywhere!” He even tried dressing his associates in shirts and ties, but they got too grubby lugging pawned lawn mowers and power tools. He settled for red polo shirts and khakis.
Perhaps the most intriguing new model is Jim De Lisa’s lender: Pawngo.com, an online pawnbroker backed by $3.8 million in venture capital. Clients get an online estimate, FedEx their valuables to the company’s Centennial, Colo., office park vault (Pawngo pays the shipping and insurance), and get a loan wired to their bank account within 24 hours. CEO Todd Hills says most of his clients wouldn’t dream of frequenting a pawnshop they’re hocking Cartier watches, Louis Vuitton bags, even a Picasso. His typical loan runs about $1,700, 17 times the $100 pawn-industry average.
The upside: Like all pawn loans, Pawngo transactions are never reported to the credit bureaus. If you default, all you’ve got to lose is your dearly departed mother’s wedding ring. But the price for discretion is stiff; Pawngo’s annual percentage rates range from 48 to 84 percent, depending on loan size. De Lisa says he paid more than $4,000 in interest on his 15-month loan worth less than $8,000. At least he’s getting the ring back in time for his sixth wedding anniversary. And the experience has him considering new options: “I should open my own pawnshop!”
This entry was posted on Thursday, April 28th, 2011 at 5:22 pm
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