In this economy it’s here today, pawn tomorrow

by Amy Kingsley

Don’t ask Calvin Holcombe for stories. The owner of Apple Pawn has heard thousands in the two decades since he opened his shop on the corner of 4th and Trade streets in Winston-Salem.

He’s heard the sob stories, the bad breaks that bring people to his register. But mostly he hears stories about things – their origins, significance, and sentimental and actual values.

Some customers come in with a line, embellish a bit when they reach into their pockets and add an anecdote as they slide something across the counter. Others stick to the basics, or offer nothing at all.

“This was my ex-husband’s,” said Mary Burge, who comes here a lot.

“My dog found these in the backyard,” explained a man with a bag of worthless watches.

“I found it in a parking lot,” said Olander Smith, who works part-time at a club.

The stories wash over Holcomb like a tide. When they recede he’s left with objects, precious in different ways, reduced to karats, weight, worth and the usual terms – 30 days at 10 percent.

“I don’t keep track of all the stories behind the pieces,” he said.

Holcombe arrived for work 15 minutes after Apple Pawn opened on a recent Wednesday morning. He slipped in through a side door near the collection of musical instruments – cigar in mouth, half a dozen retractable ballpoints poking out of his shirt pocket and reading glasses riding his forehead. He’d been up half the night watching election returns from West Virginia.

Holcombe follows politics, so he knows that the political conversation has turned to economics, an issue with which he is well acquainted. His shop is a retail business as well as a creditor; an economic bellwether that accommodates both the income generating and spending needs of its customers.

With gas prices nearing $4 a gallon, more and more of his credit customers have come in with the same story.

“In some way or another,” he said. “They’re all related back to gasoline.”

Like Burge, who traded her ex-husband’s ring and her son’s old gameboy for a handful of dollars to tide her over for the week.

“I have a low income,” she said. “And I come here all the time. I just need a little money for gas and the basics.”

The buses that stop at the depot down the street bring customers with their own set of worries. A man who identified himself as Woowo came to pick up a $30 bicycle. He doesn’t have a car and doesn’t worry about gasoline prices.

He’s an ex-con, a felon out four years, struggling to find employment. That 18-speed Magna will help him get to the gigs he lined up playing keyboards in church on Sundays and Wednesdays.

“It’s real,” he said. “People get laid off, then they do what they got to do to survive. That’s why the world is in the shape it’s in.”

Forsyth County shed 1,400 jobs between March 2007 and March 2008, according to the NC Employment Security Commission, as prices for consumer goods continued their upward climb. In March of this year, 140 Forsyth County homeowners lost their homes to foreclosure; nationally, foreclosures jumped 65 percent in April compared to the year before, according to RealtyTrac.

People are struggling to make ends meet. And as customers fall behind on their bills, the big banks suffer.

But pawnbrokers, creditors at the lowest end of the financial services sector, are thriving. Cash America, a national pawnshop chain that also operates a payday-lending arm, has posted record profits, including a 34 percent increase in net profits for the first quarter of this year. Gold, which has seen its value rise as a hedge against the drooping dollar, has proved profitable for pawnbrokers, jewelers and others in the precious metal trade.

“To make it long and short,” Holcombe said, “what makes the economy run as far as selling is disposable income. The reason the economy is suffering is because disposable income has stopped increasing.”

Some of his retail business has slowed as a result, but some items continue to sell briskly. Gun sales, for example, have been good, Holcombe said. That’s another thing about an economic downturn.

“People are worried about the increase in property crimes,” he said. “They’re worried about their safety.”

His shop and others like it provide a valuable service for economically vulnerable people, he said. He provides small, short-term loans without a credit check.

“If you go to a bank and ask for a hundred dollars, they’ll just laugh at you,” he said.

So far, gold prices have kept the pawn industry profitable, but Holcombe said the industry is not immune to economic forces.

“Let’s say you have a hundred people wanting to borrow a thousand dollars each,” he said. “What if you make the loan and they never come back? What happens if you can’t sell their stuff? You lose that money.”

About 60 percent of pawned items go into a safe. Holcombe holds them until the owner returns with cash and a pawn ticket. The rest of Holcombe’s customers want to sell outright. They get more money that way.

The jewelry ends up under glass counters that run the length of his store. Rings, mostly, but also bracelets, chains, religious medals, earrings, cufflinks, gold fronts, lockets and a small selection of toddler jewelry. There are engagement rings, wedding sets and jewel-encrusted Jesus medallions.

“We pay a lot for gold,” Holcombe said. “More than most places.”

Customers can extend their loans with monthly interest payments. One woman hocked a vacuum cleaner and paid on it for two years. She spent more money keeping it in Holcombe’s safe than it would have cost to pay off the loan. Eventually Holcombe forgave the loan and gave the vacuum back. The woman promptly used it to get another loan.

Apple Pawn gets a lot of return customers. Their interest rates are lower than chain pawnshops, Holcombe said, and they give bigger loans.

A man who called himself Bravo Hunter said he’s been here a couple times before. He said he’s not desperate, just interested in getting a little spending money. Susan Priest, who works at Apple Pawn, gave him a $120 loan for his heavy gold ring.

“I’m actually not really hurting,” he said. “I just don’t get paid until next week and I wanted to have a little fun this weekend.”

Smith came in with a bag of jewelry, odds and ends collected from the club where he worked. He brings in these things, orphaned earrings or broken chains, to see if they’re valuable.

“You never know,” he said. “Sometimes you get lucky.”

Priest turned him away. His license had expired. If you don’t have valid identification, you can’t sell or borrow – that’s the law.

Priest and Holcombe used to live in an apartment above the shop. A year ago they moved into a house they share with three cats and several birds. Working at a pawnshop has its perks, she said. Perks like the three-karat, emerald-cut diamond ring in her jewelry box at home.

On Wednesday morning she didn’t wear any rings, just a set of hoop earrings.

“I left all my rings at home today,” she said. “I guess if you work at a donut shop you get tired of donuts. It’s like that around here, too.”

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