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Online pawn shops a blossoming mode of credit

Mar 28, 2012 Sean Albert

Due in part to television shows, the pawn shop business has become a popular way for customers to establish alternative credit by pawning items for fast cash and paying the loans plus interest back to the business. The pawning and selling process has become even easier as of late, with many companies taking their business to the internet, allowing them to reach more consumers. The Bulletin recently hailed the practice as a quick and private way to pawn items, and online shops have not decreased revenue in traditional walk-in pawn shops. Nikoleta Panteva, senior analyst at IBISWorld, told the source that pawn shops have seen a revenues increase by 2.6 percent each year from 2006 to 2011, though she predicted that online pawn shops will eventually overtake traditional stores. The Bulletin explained that regular pawn shops may want to explore the online avenue, as companies can save the costs incurred in hiring employees and the overhead costs of physically running a store. Pawning is an easy way for unbanked Americans to establish a line of credit and obtain money quickly. Reuters reported that alternative financiers like pawn shops are on the rise because of the introduction of bank fees that cover services that were previously free, citing a 2009 Federal Deposit Insurance Corp report showing 60 million Americans are unbanked.