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A neon sign in a pawn shop window Photo: Stuart McCall/Getty Images

Can Instagram Help Pawn Stores Shake Their Seedy Reputation?

A new generation of brokers is using social media and luxury concierge services to shift public perception.

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If you ask the average American consumer what image the phrase “pawn shop” brings to mind, the response would probably be something out of a film noir: grim, sketchy storefronts haunted by grizzled, cigar-chomping old men.

But the current landscape is something entirely more wholesome and tech-savvy. In an effort to bridge this gap of perception and reality, a new generation (along with some old-timers) is working diligently to reshape and polish the industry’s public face in order to attract a new generation of clients.

So what is pawn, exactly? Simply put, pawnbrokers offer customers a loan based on collateral items, such as gold jewelry, and customers have a set period of time to pay off the loan and its interest. If the loan isn’t repaid in the allotted time period, there’s often a grace period where customers are contacted by certified mail, phone, and email, and then they have another grace period to pay off the balance. If the customer fails to meet payments after this period, then (and only then) the pawned item becomes property of the broker, who can melt it down for the precious metal value or sell it.

But because people are most familiar with the first and last steps of the process, or perhaps because of pawn’s presence as a plot point in old movies and crime procedural TV, a lot of consumers have a vague idea that pawn is limited to stealing your grandmother’s silver for some quick cash. While this may have often been the case decades ago, the current state of this highly regulated industry is much more transparent, widely used, and even upscale with select concierge services.

Its reputation endures, though. Third-generation broker Lauren Kaminsky says she often receives flack about her work from people who don’t understand. “When I tell people that we make loans, a lot of them say, ‘Oh, that's so sad that [jewelry] gets put in the showcases.’ That's not the case. It gets put in a vault and belongs to the customer throughout the entire loan period.” She adds that even if the customer fails to pay off the loan, that’s not necessarily the end of the transaction. According to Kaminsky, “if the person doesn't come back or we don't hear from them, we actually give a two-month grace period; and then after those 60 days, that's when the item either gets sold or melted.”

While jewelry, electronics, and sports memorabilia are currently the most common items to offer up, they’re not necessarily the only things you can put down as collateral for a loan. You can technically pawn anything your pawnbroker is willing to accept, but they tend to stick with things that can be easily turned around in retail. According to veteran New Jersey broker Irwin Sablosky, who manages a family-owned chain of pawn shops that started over a century ago, you could literally pawn the shirt off your back. “Years ago, we used to take clothing — we had a full clothing department. We used to take suits, jackets, coats, hat, and shoes. That used to be a very big part of our business. That's obviously gone by the wayside.”

Outside a Memphis pawn shop in 1943
Outside a Memphis pawn shop in 1943.
Photo: Walter Sanders/Getty Images

While that may seem adorably quaint now, it’s important to remember that the business itself is incredibly old. The pawn industry has existed in some form for no less than 3,000 years by some accounts, having started in China with small loans to peasants who had no other means of securing money. In fact, the symbol used outside most shops — a sign emblazoned with three gold balls suspended from a bar — is said to originate with the family crest of House of Medici, who founded their first brokerage in 1397. The powerful Italian banking family, which is perhaps most famous for using its vast wealth to fund the great artists and artisans of the Renaissance, built its fortunes by making loans and using the complicated collateral formulas of pawn as ploy to avoid running afoul of the Vatican’s laws against Catholic-owned businesses charging interest.

As popular myth would have it, even America as a nation owes its existence to pawn, since Queen Isabella of Spain was thought to have pawned the crown jewels to finance Columbus’ exploration. Historians now debate the accuracy of this claim, although it does seem like she did hock some items to fight a war in Granada. And she was hardly the only European monarch looking for a quick cash loan against failing wars; even England’s Edward III pawned his crown to finance his campaigns against France. So, with this noble history, how did the industry fall so far in terms of public opinion?

The answer probably has something to do with the hard times pawn has seen and seen people through. During the Depression, a great number of banks folded, leaving very few options for low-income consumers who needed cash in a hurry. In many areas, pawn became the go-to source for money for the most financially distressed homes. As the 20th century evolved and credit cards became available, those without access to lines of credit due to inconsistent income, lack of financial savvy, or just desperate circumstance continued to turn to pawn shops for needed cash, perhaps cementing its reputation, as Sablosky puts it, as “the poor man’s bank.”

It’s also in this period that pawn may have acquired its reputation as a sketchy, even criminal enterprise. While there may have been some truth to this in the past, as years went by, pawn became one of the more heavily regulated lending industries beholden to laws at the city, state, and federal levels, plus more than a half-dozen nationwide statutes. There are also laws on the books to protect both consumers and brokers against identity fraud, stolen property, and other issues that could arise from dealing with peoples’ valuables.

Despite this, the industry remained largely under the radar, continuing to operate family-run stores in the same neighborhoods generation after generation. In the late aughts, pawn reemerged into public consciousness with the popularity of reality TV shows such as Pawn Stars (2009) and Hardcore Pawn (2010), which used family-owned pawn stores as a background to show off flimsy plot lines and strange collectibles. The format was simple and fun: People came in with various celebrity collectibles and pop culture oddities seeking cash, experts were consulted and deals were struck (or not, depending on the items’ values.)

The Pawn Stars pawn shop in Las Vegas.
The Pawn Stars pawn shop in Las Vegas.
Photo: Denise Truscello/Getty Images

Seldom, if ever, did a customer actually pawn an item in the sense that they took out a loan on it. The shows may have piqued peoples’ interest in the industry, but they seem to have done little in terms of public relations, with few stores besides the ones featured on the shows seeing any real uptick in visitors.

The industry did, however, see a huge boost during the recession of the past decade because gold prices skyrocketed, giving jewelry new value. According to National Pawnbrokers Association spokesperson, Emmett Murphy, “The actual business has changed as the economy has changed. As an example, during the downturn of the economy in 2008, people were laid off and did not have access to traditional forms of credit. Consumer reports were growing, and the industry was servicing customers that didn't have access to credit in other places.”

Though Murphy adds that there seems to be continuing growth in the pawn industry with more people using the stores and online outlets to get loans, the numbers of transactions in any given year are hard to track due to the fact that an estimated 85 percent of the 10,000 shops in the US are “mom and pop” establishments that don’t report sales to a central organization or agency.

The real game-changer for the industry at large, however, might not be the whims of the markets or reality TV, but social media. For Kaminsky, the future of the family business is on Instagram and other social outlets. Kaminsky, who’s been nicknamed “Gold Girl” by industry peers, is coupling her background in business management with millennial savvy to expand EZ Pawn Corp.’s empire and refine pawn’s overall public perception through social media. What distinguishes her approach from other industry vets, according to Murphy, is that “she’s much more public relations-focused than other pawnbrokers.”

Kaminsky works out of a bustling, informal office in the Long Island City section of Queens, where she oversees appraisals and the expansion of EZ Pawn Corp.’s chain of pawn shops. She’s also active in industry organizations like the National Pawnbrokers Association, and she curates the retail collection for the Tao Group’s Beauty & Essex, pawn shop-inspired restaurants in Las Vegas and New York (a Los Angeles outpost is coming soon).

The Locket Room inside Beauty & Essex in New York City
The Locket Room inside Beauty & Essex in New York City.
Photo: Beauty & Essex

That is to say, being a licensed pawnbroker was not her initial career goal. Kaminsky’s grandfather, Martin, started the business that evolved into EZ Pawn Corp. in the Spanish Harlem neighborhood of New York City, and her dad, David, continued it. (His face is familiar to New York City commuters from his ubiquitous subway ads where he’s dressed as Uncle Sam, promising cash for gold.)

Even though being a pawnbroker ran in the family, Lauren Kaminsky admits to an initial distaste for the industry. “People would assume that I didn't have a choice, but I never understood the pawn business. I went to Boston University and I studied business management. I had no desire to work with my dad, and no desire to go into a business that seemed shady and sketchy and that I didn't really know anything about.”

Her change of heart came in the summer of 2008, when she was helping her dad during a particularly busy period. “I’ll never forget how busy it was that summer. We opened up stores. I was learning how to pawn gold, and I was learning how to market the pawn industry. No one was really out there talking about this business. That's when I decided: You know what? People can say what they want about pawnbrokers.” After completing her degree, she returned to the business built by her father, and she has been a steadfast evangelist for pawn ever since.

Part of what attracted Kaminsky to her line of work to begin with was a genuine appreciation of jewelry design that she didn’t see in her dad, who tended to focus on net weight over trend or craftsmanship. She remembers spending time in her dad’s stores growing up and looking at all of the jewelry he had, pointing out which of the bracelets she liked from his collections. She recalls a time when she recognized a Cartier ring sitting in a box, but to her dad, “gold was just gold.”

Using her connections in both pawn and estate sales, Kaminsky started her own brand, By GoldGirl, where she deals in jewelry and redesigned vintage items in a range of price points, and the site itself houses a curated collection of high-end jewelry from those connections. This is where her understanding of social media outreach really pays off. “The social media presence is huge because everyone likes looking at pictures of pretty and interesting things,“ she says.

Much like how upscale resale stores have raised the profile of used clothing, Kaminsky is reinventing the customer experience of pawn. For her online profile, she uses editorial-style photography and features luxe pieces that can range in price into the thousands of dollars. There’s also a smaller selection that doesn’t overwhelm shoppers. Her site’s motto is “Happy Treasure Hunting,” which she extends beyond her own business by still encouraging people to explore their local stores. “Pawn shops are really a great shopping destination because their inventory is constantly changing,” she says.

In 2010, Kaminsky had a meeting with the management of Beauty & Essex that resulted in her curating a “pawn-shop inspired” jewelry collection for its growing chain of locations. Though none of the Beauty & Essex locations are run by licensed and bonded pawnbrokers, there’s still a distinct pawn shop vibe, albeit a less intimidating and slightly more glamorous one, with vintage vitrines and eye-catching tchotchkes in the front and a cocktail-couture restaurant in the back.

Kaminsky thinks this could be a gain for the industry. “It’s almost like we are taking [our stock] from a place someone might not feel comfortable walking into [and bringing it] to the totally approachable, comfortable Beauty & Essex,” she says. “I think it's bridged the gap and made people realize: Wait, I can actually find good stuff in a pawn shop. Next time I walk by one, I'm going to pop in.”

Though not an overnight change, Kaminsky does see young professionals in the industry making headway in changing their overall approach to the inner and outer workings of the business. She attributes this change to bringing together the experience of veterans with the upstart ideas of millennial brokers.

“I’m on the board of the National Pawnbrokers Association and I'm one of the youngest members, which is a huge change for them,” she says. “We now have a Young Professionals Committee; we’re merging with the old-timers, so the old-timers are still on the board, and our board meetings are really a learning experience on both sides. They know things, and they care. They're passionate about things that I would never look twice at. They say the same about me, and marketing, and Instagram, and how important that is. We're teaching each other at these board meetings, which I think is really rare in most industries.”

Even the old-timers seem to agree that the future of the pawn business is an adapt-or-die scenario. According to Sablosky, attracting customers was a much different game when he took over the family business three decades ago. “We've grown into the internet age, there's no question about it,” he says. “There used to be a time when we said to people, ‘How'd you find us?’ and they said, ‘We went to the yellow pages.’ Obviously those things don't exist anymore, so we've created a huge online presence with our website. We're on Instagram, we're on Facebook, we're doing all of those things.”

His WM. S. Rich & Son stores are big on customer education and convenience. The site includes a blog on the ins and outs of buying and selling, and there’s even an online function where customers can get an initial appraisal via email. Sablosky is quick to add that there’s less stigma around pawn now than he’s seen in the past, partially because his shops (and others) are providing services in a more upscale way than they have historically. “We're reaching out to the higher economic levels and giving them a concierge service, where we'll come to them by appointment, we'll give bank references, we'll come to an office where they're comfortable. It allows us to reach all different people, whereas we were limited in the past.”

One difference between pawn and other current luxury business models seems to be an absence of celebrity influencers from outside the industry, part of which probably has to do with the continuing stigma of pawning items for cash, but may be possible on the other side of business with custom jewelry, resale, and concierge-type services, which are options more pawn outlets are beginning to invest in.

In the meantime, internal brand evangelists like Kaminsky and Sablosky will continue to try and convert the skeptical through social media, customer education, and evolving retail experiences. Only time will tell if this approach will bring in a new generation of customers, but until then, for a lot of people who need quick cash and can part with keepsakes temporarily, it remains a time-tested option.

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