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Cashing in during tight times

URORA | You know times are getting tough when people start pawning their body parts.

And at Pasternack's Pawn Shop on East Colfax Avenue in north Aurora, times are tight for some of their customers - namely the owner of a pricey prosthetic arm who recently pawned the appendage for needed food and gas money.
"You know that if someone comes in with a prosthetic arm and they are taking it off ... that person is hard-up for money," said Phyll Mosteller, daughter of owner Scott Pasternack. "Those things are very expensive, and it's not like there's a big market for them."
The pawn shops along Colfax that have been stalwarts of the strip for decades say that business has been steady lately as gas and food costs continue to go up.

"Our loans have been going up because of it," said Liz Connely, manager for EZ Pawn at East Colfax Avenue and Clinton Street. Alex Arguello, who works a few doors down from Pasternack's at his uncle's Colfax Pawn, Inc., estimates that 90 percent of their customers come in needing money for fuel.

"It's pretty bad," he said. "Remember when you could just grab a handful of change and get some gas? Now you have to go pawn the drill that's in your trunk."

Aurora has 15 pawn shops, according to city officials, with most of them located along East Colfax Avenue in north Aurora.

Pawn shops operate under a specific set of local, state and federal regulations including a city requirement that no two pawnbrokers operate within the same two-mile radius. Existing pawn shops were excluded from that regulation when the law took effect years ago.

The state also sets the interest rates pawn shops can have, with individual stores able to vary between 10 percent and 20 percent.

They cannot operate on Sundays, must keep records of the items they buy and sell, including sellers' fingerprints, and can only serve customers who are 18 or older. The essentially operate as loan companies, making small, short-term loans and holding merchandise as collateral.

Detective Brian Crites, one of three detectives who work with the pawn shops, described a pawnbroker as "a big ATM" in the minds of residents who live paycheck to paycheck.

Between 3,000 and 3,500 items are pawned in Aurora each week, and the majority of the pawned items are retrieved by their owners within the one-month time frame pawned items are put on hold, according to city records.

Customers take out a loan up to the assessed value of the item, using the item as collateral. The customer then pays back the loan, plus a predetermined percentage to get the item back.

Crites said in June alone, more than 13,600 different transactions occurred in Aurora pawn shops. Some shops track each item as a transaction, while others can log multiple items in a single transaction.

Like many of the pawn shop owners, Crites said he has seen an increase in the small, $10-$20 loans to cover gas.

"They get paid on Friday and come back in and get their stuff back," he said. "That's the biggest change I've seen."

At Pasternack's on Colfax between Florence and Dayton, Mosteller said business has been steady over the past few months.

Inside the pawn shop, which has been in the same location since the early 1980s, is a hodgepodge of items ranging from antique guns to jewelry to camping equipment.

A customer pawning an item is given an assessed value of the item, minus 10 percent. To get that item back, the person has to pay back the loan plus the 10 percent. If not, the pawn shop then puts the item up for sale. Customers can extend their loan by paying the 10 percent every 30 days.

She said about 80 percent of people come back to pick up their stuff, though lately she said those figures may be a bit high. But still, she said most people pawn things valuable to them and want to get their stuff back, and it's cheaper to get stuff out of pawn than it is to let bills go by the wayside.

"If they don't pay their public service, they get their power turned off and not only is it going off, but to get it back on they have to pay an extra fee," she said. "So instead of getting their power turned off, they come in and get a short-term loan and they are still paying less money to pawn their Playstation, and you are without it for a week..."

Source : http://www.aurorasentinel.com