A pawn shop is a shop or a business which loans money to customers in exchange of valuable items with the pawn shop owner or pawn broker. The items for exchange can be gold, jewelry, or gadgets such as television, computer, watches, cameras, etc. The valuables deposited by the customers are called as ‘collateral’ and can be collected when the customer pays off the loan amount with the interest applied. People have to show some identification such as driver’s license or any govt. issued ID to avail loan in exchange of something valuable. This validation is required to prevent thieves from using pawn shops for selling any sort of stolen goods.
The U.S. pawn shops market was valued at US$ 2.43 billion in 2020. It is expected to reach US$ 4.12 billion by 2028 and exhibit a CAGR of 6.8% during the forecast period.
Several companies in the U.S. pawn shop market are providing services through online channels. Earlier, customers had to visit the pawn shop to loan money from pawnbrokers by keeping collaterals. Increasing adoption of e-commerce in the pawn shop market has created an opportunity for market players to expand their businesses online to expand their consumer base.
For instance, a company named Pawntique is a pawnbroker/business that caters to bargain hunters looking to raise short-term capital through buying, selling, or pawning luxury jewelry, artwork collections, and other items through online channel.
|Base Year:||2020||Market Size in 2021:||US$ 2.43 Bn|
|Historical Data for:||2017 to 2019||Forecast Period:||2021 to 2028|
|Forecast Period 2021 to 2028 CAGR:||6.8%||2028 Value Projection:||US$ 4.12 Bn|
First Cash Financial Services Inc., EZCORP, INC., DFC Global Corp., Picasso Pawn, Buckeye Pawn Shop, Borro Private Finance, Welsh Pawn, Luxury Asset Capital, Beverly Loan Company, and Big Store Pawn Shop
|Restraints & Challenges:||
U.S. Pawn shops market - Impact of Coronavirus (COVID-19) Pandemic
The global crisis due to the outbreak of the Covid-19 caused U.S. pawn shops market to face significant difficulties. Lockdown and social distancing measures forced individuals to spent most of their time indoors, and outdoor ventures were allowed only for basic fundamental services and needs. For instance, First Cash, a publicly owned pawn company based in the U.S., reported that in April 2020, loans fell by almost 60%, and at the end of September, pawn balances were still down by 30% which depicted that pawning of goods was lesser than clearing of existing loans. The U.S. pawn shop market is anticipated to be back on track in 2021 as the pandemic situation normalizes and economy starts growing.
Key players operating in the U.S. pawn shops market include First Cash Financial Services Inc., EZCORP, INC., DFC Global Corp., Picasso Pawn, Buckeye Pawn Shop, Borro Private Finance, Welsh Pawn, Luxury Asset Capital, Beverly Loan Company, and Big Store Pawn Shop.
Pawn shops are places where a person can avail cash loans by temporarily selling/mortgaging a valuable good to the pawn broker as a collateral. The loan amount is decided and finalized by both the parties, and after some legal documentation and paperwork, the loan is disbursed with an applied rate of interest. The quicker and convenient provision for providing short term loans in exchange of wide range of valuable goods is the main reason why pawn shops are gaining traction in the market. Pawn shops are also a one-stop destination for collectors as many people visit pawn shops to sell possessed antiques, vintage goods, and artifacts to the pawn brokers who further find potential customers who’ll buy the goods at the right price. Investing in pawn business is considered by many investors as it is very economical and easy to start up a pawn shop.
Many of the pawn shop accept variety of items as collateral but some are specialized and deal only in some specific goods like electronics and jewelry. Also pawn shop have started doing business online using e-commerce. Customer fills out an application form, puts some relevant information about the object to be placed as collateral, after accepting the offer made by the pawnbroker, the customer ships the goods directly to shop owner and receives the loan amount. The pawnbroker offers loan amount for the collateral on the basis of its antiquity, value, condition. Pawn brokers before accepting antique goods require a proper document/paper issued from a recognized authority stating its authenticity to save itself from fraudulence.
Key features of the study:
“*” marked represents similar segmentation in other categories in the respective section.