Is pawnbroking a “bad times” industry?
Response: Pawnbrokers survive bad times if they make adjustments both at the retail and loan counters, but they do far better in good times. In hard times, customers move away to find employment, have less ability to repay their loans, and the value of all merchandise goes down. If goods sell for less, pawnbrokers must loan less thus earning a smaller return. In good times, customers have a greater ability to repay their loans and unredeemed merchandise sells faster because customers have more discretionary income.
Response: Pawnbrokers survive bad times if they make adjustments both at the retail and pawn counters, but they do far better in good times. In hard times, customers move away to find employment, have less ability to repay their pawns, and the value of all merchandise goes down. If goods sell for less, pawnbrokers must pawn less thus earning a smaller return. In good times, customers have a greater ability to repay their pawns and unredeemed merchandise sells faster because customers have more discretionary income.
