DENVER -- It's a new way to get quick cash without ever leaving the comforts of your home.
Pawn shops have now spread to the internet.
And they're unlike anything you've probably ever seen, with customers you’d never expect.
"You need $3,000?" asks an employee of Pawngo, an online pawn shop, to a customer via phone.
Forget hauling in your personal possessions to hock at a store.
This is all done privately online and by mail.
"It's really exciting to think two years ago, we plopped up a website. Let's see if someone sends us something," says Pawngo co-founder Todd Hills.
And boy, have they!
The company's more affluent customers send high-end luxury items, like a $38,000 Piquet watch, or a $3,600 Louis Vuitton carry-on.
And this week, a woman from Greenwich, Connecticut sent an 11-carat family heirloom diamond ring.
"In 24 hours, we put a $100,000 in their bank account and it's secured by that ring. And that ring probably has a retail, street value of $200,000 to $250,000," says Hills.
It's the company's biggest loan yet--with an average interest rate of 4.5% a month.
It’s booming business that Hills says banks are turning away.
"What this economy has done has created a whole new segment of customers for us," says Hills. The credit market is very tight. We deal with a lot of small business owners who need to make payroll or buy equipment, or take advantage of an opportunity,” says Hills.
But traditional brick-and-mortar pawn shops say they're not worried about the online competition.
"I think we have totally different clientele. They have a hard time getting from paycheck to paycheck. So, somewhere mid-month, to the end-of-the-month, they run short. They need gas money. They need to keep the lights on. They need to buy diapers," says Josie Koontz, owner of Josie’s Pawn on Larimer St.
Plus, traditional stores accept bigger and a broader range of items: like bikes, power tools and home electronics.
Pawngo accepts assets it says, “If it fits in a box” and are worth at least $500.
Louis Tinsley just pawned his home stereo for $30 at Josie’s. He says he needs to buy food.
"'Cause I ran short of money and they're taking their sweet time mailing me my checks," he says.
Hills says 85% of its customers return to get their stuff back.
But those who don't, they're items are sold online or to wholesalers.
"We have loaned over $5-million since June 2011," says Hills.
Pawngo will loan 50% to 75% of the current value of an item.
Its average loan is $3,500.
For pawn shops it's $150.
And the interest rate is a little higher at brick-and-mortar stores between 10% and 20%.AlertMe