Pawn shops meet the internet age – The Denver Post


Todd Hills burst out laughing when I asked him if he thinks the economy is recovering.

Hills isn’t an economist, or a banker, or an analyst, or a politician, or a motivational speaker, or a TV talker, or even a guy who’s finished high school.

Hills, 45, grew up on a farm in Brighton.

“One day my family lost the farm,” he said.

At 16, he had no chance of entering college and only knew about the horse trade. So he went to work for a pawnshop. Then he opened his own pawnshop. And over the years, he’s turned it into a chain of about 25 pawn shops.

In 2007, Hills sold 15 of its Jumping Jack Cash stores in Colorado to EZCorp, based in Austin, Texas. Inc. for approximately $ 23 million.

Now he moves on: Internet Pawn.

The Internet has been around for years. Pawn shops have been around for millennia. But a deep recession eventually brought the two closer together.

Now you can go to, fill out a form and FedEx your Rolex for a six month loan. No credit check. No employment check. No monthly payments.

Hills says he only knows of one other company making online pawn shops, and that’s in the UK But at the rate that credit card lenders are cutting lines of credit and raising interest rates, the internet pawn could become as big as internet pornography.

Remember when real estate was booming and cable TV featured shows like “Flip This House”? Today, one of the latest shows is the History Channel’s “Pawn Stars”.

“Long before banks, ATMs and check cashing services, there were pawn shops,” reads the show’s website. “Pawn shops were the main form of consumer credit in the United States until the 1950s, and pawn shops still help everyday people make ends meet.”

As the economy deteriorates, publicly traded companies that operate pawn shops including EZCorp., Cash America International Inc., First Cash Financial Services Inc., are seeing steady growth in profits and revenues.

Some of their other lines of business have suffered – particularly payday loans, thanks to a regulatory backlash against a form of lending that many states consider abusive. However, pawn shops have remained healthy.

Hills launched Internet Pawn about six months ago to target once-bottom-up mobile.

“These are people who have done very well in the past, but maybe they’ve gone a little too far in leaning on themselves, and now they’re exhausted.”

The house is mortgaged, the credit cards are at maximum, and the revolving lines are no longer spinning. But there are still a few frivolous trinkets acquired in better times.

A home builder recently sent Hills a diamond ring he paid $ 35,000 for.

“He has specific homes that don’t move,” Hills said. “He has lots. But even if he could get bank financing to start developing the lots, who is he going to sell them to?

Hills gave the man a six-month loan of $ 10,000. In six months he can pay $ 13,000 and get his ring back, or pay $ 3,000 to extend the loan for another six months, or leave the ring with Hills and he will try to sell it.

“It’s a white collar transaction,” Hills said. “No embarrassment, no intimidation, completely private.”

A constant stream of real estate agents, mortgagees, entrepreneurs and stock brokers send their jewelry to Hills.

Many of them have banked or traded stocks online. Or maybe they trafficked eBay or booked vacations on So using the internet to get a pawnshop seems more natural than walking into a gritty store and chatting with a guy in gold chains and a Hawaiian shirt.

“We have a whole new generation of customers who need this service,” Hills said.

Most customers seem emotionally attached to the items they wear, especially engagement rings, and Hills suspects most of finding a way to avoid abandoning them.

“These guys are losing sleep at night, trying to find a way out of this deadlock,” he said.

Hills has another unique window to the economy: He owns a business that buys used Harley Davidson motorcycles from a finance company and sells them to the public.

“In 2008, our first year, we sold 1,000,” he said. “If we sell 200 in 2009, I’ll be shocked. Our clients are weekend warriors: Accountants, lawyers, stock brokers, bankers, chiropractors – everything. And they’re not spending any money right now.

Hills is therefore convinced that the economy will not come back to life and set back its experience as an Internet pawn.

In fact, if Hills has learned anything in 25 years of being a pawnbroker, it’s this: “There are always more bills than money.

Al Lewis: 212-416-2617 or [email protected]

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