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Pawn shops playing a role in short-term lending

Feb 04, 2011 Todd Milner

Pawn shops are an easy way for a person to get quick cash. They can be a source for short-term loans and provide individuals with the money needed to pay bills. However, while pawn shops serve as an outlet for a quick buck, they are not after a person's valuables as much as perceived. They want to sell the items - the problem is that many of those surrendering their goods often do not repay the loans, according to KCBY-TV. The Yuppie Pawn in Kirkland, Oregon, adheres to the state law that mandates pawn shops retain merchandise for 90 days. The problem, according to owner Brian Lurie, is that the borrowers fail to recoup their items by going into default on the loans. "We're not in the business of holding inventory; we want to sell it," Lurie told the news station. After 90 days, property at Oregon pawn shops belongs to the proprietor, but that has not stopped the industry from gaining momentum. According to Investor's Business Daily, pawn shops nationwide have increased business because they assume the role of an alternative credit source. Investors reports that EZCorp, one of the biggest pawn shop chains, reached $733 million in sales over the last four quarters.