Pawnshops: Now for Santa & Xmas Shopping

Christmas shopping can be stressful for a variety of reasons, not least of all the cost. Combined with the current economic woes, the bounty beneath the Christmas tree is likely smaller in many homes than in years past. To make the most of less cash, many folks, including families, are now going to pawnshops to do their holiday shopping, reports the New York Times.

As a result, the business at many pawnshops is thriving, especially at the larger chains that resemble more mainstream, big-box stores like Target and Wal-Mart. Some pawnshops have decked their halls for the holidays and added Black Friday-like sales and visits from Santa, in order to entice seasonal shoppers.

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While the economy might be partially responsible for this recent trend, the popularity of reality television shows like Pawn Stars has helped shopping at the stores gain mainstream acceptance, reports the Times.

“People look at it now as a place to find stuff and find a bargain, where before they may have been afraid of it or figured it was all stolen,” said Mark J. Perry, an economics professor at the University of Michigan, Flint.

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Pawnshops allow customers to offer up merchandise as collateral in exchange for a sum of money. There is a window of time wherein the customer can pay back the loan, with interest, to get back their merchandise. If the money is not paid back, the pawnbroker resells the merchandise.

Before the holiday boom, sales at pawnshops had been slow while the number of loans has been higher than ever—another sign of the financial hardship many families find themselves in.

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Are you taking measures to spend less this holiday season? If so, how are you cutting back?