National Pawnbroker - Fall 2014 by National Pawnbrokers Association

Official Publication of the National Pawnbrokers Association

FALL 2014

Raise the Bar How to Save Over

$3000 p.30

Looking For a Few Good Men & Women p.16 The Nose

KNOWS p.23

Earn Your Mark of

EXCELLENCE p.32

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Message from the President

The Best Is Yet To Come NPA Changing to Fit Your Needs

“Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has.” – Margaret Mead

It has been an incredible year for the National Pawnbrokers Association and we have seen many positive changes to the organization. At the top of the list is the new NPA Strategic Plan that was unveiled at the annual membership meeting in Las Vegas this past July. I would like to highlight some of the exciting new benefits and resources that are happening as part of the plan.

Advocacy

And don’t forget all of the other great member services that will continue in 2015: • Free federal and state labor law posters with updates - $60 value • Access to the NPA Member Forum • Free store listing on PawnFyNdR.com • Discount on your Pawn Expo registration • And more!

Education

NPA is hard at work representing your interests throughout the year. Below are a few of the key initiatives we’re focusing on right now to ensure that it is understood why the pawn industry is vitally important to our nation’s economic and social needs. • Agency meetings in Washington, DC, about bank discontinuance • Preparing for the 114th Congress • Legislative alerts to keep you informed of issues impacting your industry

The development of the Certified Pawn Professional designation program is well underway. The first courses will be offered at Pawn Expo 2015. Stay tuned for information on how you can earn the CPP designation and, in the meantime, read more on page 32. With all of these new developments, be sure to renew your 2015 NPA membership. You don’t want to miss out on any of the legislative alerts, new member benefits, or peer-to-peer communications keeping you on top of your game.

Member services

The NPA is not possible without its hard-working board of directors, members, and staff. The landscape of the pawn industry is changing and, to be successful, it takes all of us working together. I extend a tremendous, heartfelt thank you to each and every one of you for another successful year and wish you a very happy holiday season.

New for 2015 • Anti-Money Laundering manual and Red Flags policy - over $500 value • Human resource consultants $2500 value • Numismatic crime alerts

Ben Levinson NPA President

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table of contents

fall 2014

highlights

16 16

MJSA: Building a Deeper Bench

Page 16

Get A Whiff of This

Page 23

New Certified Pawn Professional Program

Page 32

in this issue Message from the President Message from the executive Director Government relations Update compliance NICS: Black Friday Hours community involvement Gift Day FBL 2015 Scholarships Member spotlight Purple Heart Pawn & Gun Vendor spotlight FFLGuard Membership SESCO’s Human Resources Consulting Program New Member Benefits for 2015 Member News Top Dollar Pawn Helping Children Learn USA Pawn Mega Store Grand Opening Board of Directors Orientation State News New Members

1 4 6 40 43 53 13 18

business sense Making It Count: Top 5 Inventory Mistakes Understanding the New Facebook Surveillance Equipment SCRA Regulations Who Is Insured Erasing i-Devices special events 2015 Legislative Conference Pawn Expo 2015 calendar of events index of advertisers

20 24 27 35 36 39 9 44 57 60

29 30

Official Publication of the National Pawnbrokers Association

Raise the Bar

10 12 14 48 51

How to Save Over

$3000 p.30

Looking For a Few Good Men & Women p.16 The Nose

KNOWS p.23

Earn Your Mark of

EXCELLENCE p.32

FALL 2014

Cover Story New Member Benefits for 2015 Page 30

National Pawnbroker is the official publication of the National Pawnbrokers Association (NPA), and is published quarterly. No part of this publication may be reproduced without the written consent of Dana Meinecke, NPA Executive Director. Sale or distribution of any or all of the contents of this magazine is prohibited. All rights reserved. For more information on advertising or to obtain additional copies of National Pawnbroker, call (817) 337-8830 or send an email to Margie@NationalPawnbrokers.org. For membership information, email Helen@NationalPawnbrokers.org. eDitor’s Note: This publication is designed to provide accurate and authoritative information on the subject matter covered. It is provided and disseminated with the understanding that the publisher is not engaged in rendering legal or other professional services. If legal advice is required, the services of a competent professional should be sought. © 2007-14 National Pawnbrokers Association: PO Box 508, Keller, TX 76244 • (817) 337-8830 • NationalPawnbrokers.org eDitor: Margie Swoyer, Director of Communications & Marketing, Margie@NationalPawnbrokers.org DesiGNer: Carla L. Butz

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message from the executive director

We Couldn’t Do It Without You Working Together to Create a Better NPA

As we speed toward the holidays, I’d like to slow down for just a moment to give thanks to a special group of people who have contributed their time and energy toward creating the NPA’s newest educational program – the Certified Pawn Professional (CPP) designation. This team has spent countless hours developing this new curriculum designed to educate pawnbrokers on a number of topics. Look for more information about this exciting new program over the next few months. The Content Development Team members are: Scott Amberg, EZ Cash of Panama City, Panama City, FL Kathleen Barbee, Lombard Financial Services, Inc, Fort Worth, TX Ric Blum, Ohio Loan Co, Inc, Dayton, OH Dave Crume, Heartland Pawn and Jewelry, Olathe, KS Seth Gold, American Jewelry and Loan, Detroit, MI Scot Keller, Keller’s Pawn, Inc, Lake Cormorant, MS Bob McEowen, Capital Pawn, Jefferson City, MO Brian Moulton, National Jewelry & Pawn, Inc, Durham, NC

Randi Nell, Big Dog Pawn, West Jordan, UT Tonia Sheppard, Alan’s Jewelry & Pawn, Inc, Asheville, NC Sam Shocket, King’s Jewelry and Loan, Los Angeles, CA Bob Simpson, El Bufalo Pawn, Laredo, TX Rick Sussman, Northwestern Loan Co, Baltimore, MD Jordan Tabach-Bank, Beverly Loan Co, Inc, Beverly Hills, CA Johnny Whiteside, Kendale Pawn Shop, Sanford, NC

Dana Meinecke NPA Executive Director

Membership

The 2015 membership drive is in full swing. Dues invoices have been mailed to those whose memberships are expiring soon. Remember your membership includes legislative updates, member discounts, educational sessions, community involvement, and much more. Send in your renewal invoice (or renew online) and support the only national trade association representing the independent pawnbroker. See page 30 for two brand new benefits for 2015.

Government Relations

Put April 29, 2015, on your calendar as the date to attend the annual NPA Legislative Conference and meet with your Members of Congress. Share your stories with them in person, and educate them on what you do. For more information, contact Matthew Church, Government Relations Administrator, at Matthew@ NationalPawnbrokers.org or call (817) 337-8830.

Looking Forward to 2015

As you can see, we have a lot of exciting things on the horizon for 2015. The NPA staff and I want to thank each and every one of you for your continued support of the association. We look forward to continuing to provide you with the information you need to make your business a success.

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government relations

FDIC and OCC Meeting

GRC Fights Bank Discontinuance in Washington

By now, the mid-term elections are history, and we know which party controls the majority in the Senate. Once everything settles down, we MAY have an indication regarding a strategy for the NPA as we move forward with our long term plans. Those plans include continuing to combat the issues of bank discontinuance, and the ongoing task of educating local, state and federal officials as to why pawn is a viable option for unbanked and underbanked consumers needing short term, small dollar loans. During the past several months, some NPA members have received letters from their financial institutions terminating banking relationships and services. They were told by their local bank officers and branch managers that bank examiners have strongly suggested their risk management policies would be strengthened by terminating certain merchant business relationships that could be considered “high-risk”. In many cases, no explanations were given. As the bank discontinuance reports to the NPA office multiplied, the Govern-

ment Relations Committee took immediate action on your behalf to get to the bottom of the issue. On July 17, 2014, NPA letters were sent to the Chairman of the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Chair of the Federal Reserve Board regarding the termination of banking privileges for state licensed, non-depository providers of consumer financial products and services (pawnbrokers). The letters requested clarification that they had not instructed banks to discontinue business relationships with the pawn industry. Copies of the same letter were handdelivered to the Chairs and Ranking Members of the Senate Committee on Banking, Housing, and Urban Affairs, and the House Committee on Financial Services. The NPA initiated a Rally Congress call-to-action on July 21 entitled “Stop Bank Regulators from Telling Banks to Terminate Relationships with Pawnbrokers.” Over 500 letters were sent to your respective Members of Congress

Tim Collier NPA GRC Chair

“Many D.C. insiders are already concentrating on 2016 where more Senate seats are up and a significant Presidential election is at stake. Regardless of the election outcome, policy gridlock will probably remain. Certainly, both parties will make efforts to move legislation to build support for their party platforms in 2016. If Republicans gain majority in the Senate, they will be able to control the legislative agenda. This will give them a stronger opportunity to highlight their public policy goals, but their majority will be small, presenting parliamentary challenges to passing legislation including Democratic filibusters, and the President still has veto power. NPA will continue to operate in a bipartisan manner and address all relevant policy issues despite the political landscape. In particular, NPA will remain focused on bank discontinuance, federal charter legislation, privacy, and regulatory actions on the small dollar loan market.” – Cliff Andrews, NPA lobbyist, Washington, DC

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government relations and followed up with numerous visits to House and Senate offices by NPA Lobbyist, Cliff Andrews. On July 28, 2014, the FDIC issued a ‘Financial Institution Letter’ entitled “FDIC Clarifying Supervisory Approach to Institutions Establishing Account Relationships with Third-Party Payment Processors,” which included removal of a previously issued list of “higher-risk” merchant categories from its official guidelines. It is important to note that pawnbrokers were NOT on this list or any other that we’ve located. NPA meeting requests were sent to a number of federal agencies in July and August including the OCC and FDIC. The appointments were made and a delegation from the NPA traveled to Washington, DC, September 18-19, for meetings with the FDIC and OCC. The NPA and the pawn industry were well represented by Ed Bean and Kathy Pierce, NPA Board of Directors; Fran Bishop, Government Relations Liaison; NPA Lobbyist, Cliff Andrews, and Regulatory Counsel, Professor Sarah Jane Hughes. The group provided the regulatory agencies with information about the pawn industry in order to not only inform and educate, but to put a face on the current string of bank discontinuances experienced by a great number of our members nationwide. An open dialogue has now been established with these two agencies as a result of our face-to-face meetings. We received assurances from both agencies that there was no intent on their part to damage or curtail the financial services relationships between the pawn industry and their banks. They will be communicating our concerns to their field operations and staff and again clarifying the roles and duties expected of them. In the meantime, we will be preparing some infor-

Ed Bean, Fran Bishop, Kathy Pierce, and Cliff Andrews review their talking points.

mation and suggestions for NPA members to consider as you look to establish new and additional banking relationships. Many have told us of finding the welcome mat out at community banks serving main street businesses with the banking services we all need to operate. In fact, during our recent meetings in Washington, both the FDIC and OCC were quick to recommend the community banking system. There will be a lame-duck session of Congress between the mid-term November elections and when the newly elected members take office in January. Traditionally, during the holidays, there will be several recesses, and you should seize any opportunity to make some very important grass-roots contacts with your U.S. Representative and Senators. We urge you to continue to report receipt of a “bank discontinuance” letter or similar communication to Matthew Church at the NPA Office, (817) 337-8830, or by email to Matthew@NationalPawnbrokers.org.

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2015 NPA Legislative Conference

Save the date April 29, 2015 | Washington, DC

Make plans to attend the annual NPA Legislative Conference next April in our nationâ&#x20AC;&#x2122;s capital. Participate in the opportunity to visit the offices of your elected officials and tell your story. Appointments, talking points, and support materials will be provided. More information to follow.

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community involvement

Helping Children Learn

Top Dollar Pawn & Jewelry Wins Community Service Award

Prince George’s County Chamber of Commerce bestowed the Community Service Award to Top Dollar Pawn & Jewelry in Oxon Hill, MD, for their community service and contributions to the education of children. The award was presented to Michael Cohen, President of Top Dollar Pawn & Jewelry, at the Excellence in Business Awards Gala on September 19, 2014. The elegant black-tie affair celebrates the accomplishments of Prince George’s County business leaders who support the community. Michael and his company have been active in the county in a number of ways. They have contributed monetarily to several public school groups, such as Oxon Hill Techies, Making the Notes Come Alive, and Reading Resources for Struggling Readers. In addition, Michael donates his time mentoring students in the Young Entrepreneurs Academy, a program that teaches students how to start and run a business. Top Dollar Pawn & Jewelry also donated 20 laptops to the group. One of their proudest accomplishments is the creation of a Children’s Book Corner in each of their stores. A bookshelf filled with children’s books and a small table and chairs offer a place for children to read by themselves or with each other. “They can even take the books home with them for free,” according to Michael. “We are constantly restocking the books and go through about a thousand a year.”

Michael Cohen accepts the Community Service Award from Prince George’s County Chamber of Commerce.

“When families come in, the kids immediately go over and grab a book.” Top Dollar Pawn & Jewelry promotes reading with a Children’s Book Corner in each store.

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member news

Bigger Is Better

USA Pawn Opens Mega Store in Jackson, MS

On August 13, 2014, after months of meetings and hard work, USA Pawn held a grand opening in their new 27,000 square-foot store in Jackson, MS. The road to the new store opening was not a direct one. A previously-planned expansion in another city was denied after a year-long process. However, introductions to some key state officials made during the process aided in getting the new store opened in Jackson. Although USA Pawn has been in business since 1991 and already had six stores, a major expansion like the one they planned was intimidating, according to Nick Fulton, managing partner. They visited other large pawn store operations, including National Jewelry & Pawn in North Carolina, American Jewelry and Loan in Michigan, and Pawn America in Minnesota.

A New Look

Nick and his team wanted to create a new retail look with a “wow” effect. They purchased mintcondition fixtures and shelving from a recentlyclosed store, designed counter tops with stainless steel, encased signs in Plexiglas™, and equipped jewelry and wall cases with LED lighting. Utilizing new surveillance technology, they designed a room with four stations behind bulletresistant glass where loan payments and jewelry loans are processed. Four 55” LED monitors were installed overhead displaying company photos, store specials, and basic pawn information. A silver wood and metal slat wall was installed in the musical section. In the center of the guitar wall, an autographed BB King Lucille guitar, one of six, is displayed in a case. Several framed autographed jerseys from some of Mississippi’s great sports figures, including one signed by Walter Payton, hang on a wall.

Customer Service

A security guard greets all customers at the door directing them to their destination. Once the loan is

written on the floor, customers are sent to the bankteller-style windows to collect their ticket and cash. A dedicated counter has been set up for customers to collect their item once it has been paid out. With the new layout, warehouse staff can pick up the pawn merchandise, allowing the counter help to keep the customer lines moving. A dedicated sales staff roams the floor to help customers. “A person in line will wait a lot longer to receive money, but someone with cash in hand can grow impatient,” Nick said.

Community Support

Family, friends, and local dignitaries came to the grand opening, which was dedicated to Ron Smith, the founder of USA Pawn. Attending the event were Jackson’s newly-elected mayor, Tony Yarber; Hinds County Sheriff, Tyrone Lewis; local councilman, Tyrone Hendrix; Mississippi State Agriculture Commissioner, Cindy Hyde-Smith; and Mississippi State Treasurer, Lynn Fitch.

Good Advice

Nick’s recommendations for anyone planning to expand their store operation, “Budget for more than just the building, plan on multiple meetings, have dedicated team members, and do it right the first time.”

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member spotlight

Purple Heart Pawn & Gun

Wounded Warrior Becomes Pawn Store Owner

National Pawnbroker magazine met with Mike Meyer, owner of Purple Heart Pawn & Gun, to discuss his journey from war-torn Iraq to Fort Worth, TX. National Pawnbroker (NP): Tell us about your background and how you got started in the pawn business. Mike Meyer (MM): In 2007, I stumbled upon an ad for a management position at College Station Pawn. I fell in love with the business and scrapped my plans of becoming a teacher/coach to be a pawnbroker. After graduation, I worked for EZ Pawn in Dallas, TX. A year later, my father and I opened Purple Heart Pawn & Gun in Fort Worth. I took the small, personal feel of College Station Pawn and the structure of EZ Pawn to form a successful pawnshop. NP: How did you come up with your store name, Purple Heart Pawn? MM: I joined the Marines after high school and served with the 1st Marine Division in Iraq as an Infantryman (0311). While sweeping a field for our supply convoy, I was shot eight times by a single Fedayeen soldier in a small village southeast of Baghdad called Al Azziziah Iraq. Later, I was awarded the Purple Heart medal and decided it would be an interesting story for our customers. We get a lot of veterans who come in just for the name. NP: How do you keep on top of all the business decisions you have to make every day? MM: With as much regulation, compliance, and logistics that go on in the pawn and firearm industries, you really have to pay attention to the details. My best advice is: • Delegation - While in the Marines, I learned to delegate tasks to others. • Checklists - I’m sure most of your readers have at least one or two in their office to help them remember the many things they need to do.

Mike Meyer (center) poses with his employees: Justin Pugh, Consuelo Nava, Patsy Martinez, & C.J. Phillips

NP: What is your vision for your company? MM: We’re actually under contract to buy our second pawnshop in the Dallas/Fort Worth area, so we’re obviously pretty excited for the opportunity to grow and expand our company. NP: How do you get customers into your store? MM: We advertise through Yellow Pages, Yellow Book, Facebook, Twitter, etc., and we’re not ashamed to ask our customers to give us reviews. Our online presence has been very successful. NP: How do you give back to your community? MM: We donate money and merchandise to several area schools and also donate to several law enforcement organizations. We think it’s vital to have a good relationship with your local law enforcement, and who doesn’t like helping kids? NP: Why are you a member of NPA? MM: We joined the NPA when we opened because the (Member) Forum that the NPA provides is a great place to share and to learn from other pawnbrokers. Most importantly, we needed a combined voice that our one store couldn’t provide. The ability to join forces with other pawnbrokers to help protect our business is extremely vital.

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member news

Back to School

New Board Members Attend Orientation

NPA’s newest Board members attended an orientation program at the association headquarters in Keller, TX, September 10-11, 2014. The two-day educational training session, led by Executive Director, Dana Meinecke, enables new members to quickly assume an active role in association leadership by learning more about the organization and their responsibilities as a board member. Attending members for this year’s program were: Kathleen Barbee Lombard Financial Services, Inc, Fort Worth, TX

Lauren Kaminsky E Z Pawn Corp, Long Island City, NY

Brian Moulton National Jewelry & Pawn, Durham, NC

Sam Shocket King’s Jewelry and Loan, Los Angeles, CA

Kathleen Barbee of Lombard Financial Services in Fort Worth, TX, said “Board orientation was a great opportunity to learn more about how the NPA Board of Directors and staff serve the membership. The dedication of each staff member is unyielding and their passion for our industry is very encouraging. I look forward to continued work with the NPA staff, Directors and membership.” The orientation program included topics on board governance, finance, media, marketing, public relations, and the NPA strategic plan for 2015. Several staff members also gave presentations, including Lindsay Wilson (Pawn Expo), Helen Moore (membership), Matthew Church (government relations), and Margie Swoyer (communications & marketing).

Sam Shocket, Kathleen Barbee, Lauren Kaminsky, and Brian Moulton take a break after their orientation session.

New board members listen to Lindsay Wilson’s plans for Pawn Expo 2015.

“I found the NPA Board of Director training to be very beneficial. Spending time with the NPA staff and getting to know specifically what projects each person is working on was an insider’s experience that I feel lucky to have partaken in. This also made me excited to represent the members of the association and learn what my duties will be as an official NPA Board of Director.“ – Lauren Kaminsky, E Z Pawn Corp

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business sense

Building a Deeper Bench

The Jewelry Maker Career Initiative (JMCI)

The jewelry industry needs to rebuild its farm system for jewelry makers and bench jewelers—just like baseball uses its farm system to maintain a deep bench of talented players. The Jewelry Maker Career Initiative (JMCI) plans to do the same for young men and women who may have the gift of good “hands” for jewelry making. We’re going to find and inspire them to consider our field, test their aptitude and desire via a hands-on summer program, and then connect them to schools, apprenticeships, and mentors. They can get the help they need to succeed and hit home runs for tomorrow’s jewelry stores, manufacturers, and designers.

Why is this Jewelry Maker Career Initiative (JMCI) needed right now?

• The national community of jewelry makers/bench jewelers is aging. Across America, retailers, designers, and suppliers are clamoring for well trained, ready-to-perform jewelers. Why? Thousands of jewelers who came of age in the 1960s and 1970s are beginning to retire. • The ranks of younger jewelers dwin dled over the past 30 years. Manufac turing moved overseas; many retailers dropped their jewelry making and repair operations. Demand lessened, salaries did not stay competitive, and the number of jewelry makers declined. • The trend to push all students towards college hurt professions like jewelry making. High schools cut shop classes and vocational training—or switched

to computer training. Trade schools closed. Students with good hands went to college or technology institutes instead.

• Custom-designed jewelry is exploding in popularity among consumers. Though many custom pieces are created/cast using CAD/CAM, there is still an ongoing need for jewelry makers to perform fabrication, stone setting, engraving, finishing, sizing, and repairs. The demand for these jobs is skyrocketing while the supply of jewelry makers is shrinking.

Peggy Donahue Director, MJSA Education Foundation

• The consumer desire for handmade, hand finished, and artisanal jewelry is growing, too, as affluent customers look for unique designs that are hand crafted and made-in-USA products. • The high cost of a college education makes it now out-of-reach for many students. Some young people are instead learning to use their hands to develop craft and maker skills, and choosing careers that don’t require an expensive degree and the debt that goes with it.

The JMCI Pilot Plan for 2015

• Find the right candidates by devel oping a pilot JMCI Network of 60+ jewelry firms with bench operations. Using a JMCI-provided message, these jewelers will tout the benefits of a career as a jewelry maker to their local high school guidance counselors, vocational/trade schools, and consumers. Jewelers will also administer to interested candidates a simple JMCI(Continues on page 17)

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business sense

provided dexterity test, proven by large jewelry firms to identify women and men with the potential to succeed as jewelry makers. • Inspire prospective jewelry makers by creating short JMCI-provided videos. JMCI jewelers will use the videos to demonstrate how jewelry making takes place, and what it’s like to work in various industry environments, such as retail stores, manufacturing, and trade shops. It will show the cool machines, computers, and simple hand tools that connect them with thousands of years of jewelrymaking history. • Test their aptitude and desire by creating a 4-day, JMCI program entitled So You Think You Want to Be a Jewelry Maker? The program, based at New Approach School for Jewelers, will allow students to try out/learn about: Sawing and Filing, Torch Use, Stone Setting, CAD/ CAM, Casting, Industry History, and Design. A Career Day will be included detailing the job outlook; the paths their careers could take; and the further schooling, mentorships, and apprenticeships available to them. • Train, Apprentice, and Mentor by: Providing a list of industry schools where young men and women can obtain the kinds of practical jewelry making skills that make them employable in a commercial environment. Sustaining a JMCI-sponsored network of experienced jewelers (both retired and still working) who are willing to take on apprentices or mentor young jewelers who have received initial training. These opportunities could be in the form of the young jewelers’ first jobs or on a trial intern basis for a shorter period.

Future Plans: What Comes after the Pilot Program?

The Jewelry Maker Career Initiative will review its Pilot Program for fine tuning in late 2015 with the plan to continue the program. Funds for developing and maintaining the JMCI will be undertaken by the MJSA Education Foundation Fundraising Drive starting autumn 2014. Generous support from New Approach School for Jewelers is also responsible for making the Jewelry Maker Career Initiative possible. For more information, contact Peggy Jo Donahue, MJSA Education Foundation Director, at pj.donahue@mjsa.org.

Strategic Plan

Learn about NPA’s vision for the future

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vendor spotlight

Peace of Mind to Prosper

FFLGuard Helps Licensed Gun Dealers Stay in Compliance

The FFLGuard organization is comprised of firearms-savvy lawyers, subject matter experts, and other firearms compliance professionals, all dedicated to keeping FFLs in business. We sat down with Christopher Chiafullo, National Coordinating Counsel for the FFLGuard program, to talk about FFLGuard and what pawnbrokers should know about firearms compliance.

NATIONAL PAWNBROKER (NP): What are some of the problems facing FFL holders, in general, and more specifically, pawnbrokers with FFLs? CHRIS CHIAFULLO (CC): The gun industry is one of the most tightly regulated industries in the United States. FFLs are held to a very high standard, and the ATF can revoke your license because of a few clerical errors. Pawnbrokers have to deal with a mass of state and federal laws regulating all aspects of their business. Adding an FFL to the mix creates a complicated record-keeping environment. Those who are seeking compliance assistance may not know where to turn. NP: How can FFLGuard help? CC: The FFLGuard program protects its clients’ FFLs by delivering proactive compliance services utilizing our unique Advocacy and Risk Management (ARM) business model. The ARM business model provides the greatest possible protection for an FFL in a world where retaining your license should be the top priority.

NP: How is FFLGuard different from other compliance services? CC: With FFLGuard, our clients have legal counsel at all times. We use FFLGuard-approved subject-matter experts and former ATF inspectors to work at counsel’s direction. NP: Give an example of what a client might expect when they contact you. CC: We need to get to know you before you sign on with the program. We ask you about your operation and the compliance measures that you currently have in place. If you are coming in cold, you will be accepted without delay. If you are coming in hot (you are involved in some kind of ATF action), then we need to approve you as a “provisional client” after a review of your case, operation, ability to pay for our services, and potential to meet Program requirements if we “save” your FFL. NP: What is the best advice you would give a pawnbroker who deals in firearms? CC: One of the things we tell our clients is, “You can be a record-keeper and not sell guns, but you cannot sell guns without being a record-keeper.” As a licensed gun dealer, compliance should always be your top priority. Good compliance starts with good record-keeping.

Chris Chiafullo National Coordinating Counsel, FFLGuard Program

“You can be a record-keeper and not sell guns, but you cannot sell guns without being a recordkeeper.”

NP: What is the best way for NPA members to contact you? CC: They can visit our website at FFLGuard.com, or give us a call at (888) 335-4731.

18 | National Pawnbrokers Association | fall 2014

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business sense

Making It Count The Top 5 Inventory Audit Mistakes

As a pawn store owner, you should be conducting at least one complete physical inventory each year. A merchandise or physical inventory is designed to obtain accurate information about the merchandise in your store. This will help you make informed business decisions and also help identify potential internal or external theft problems. We see many mistakes made while conducting merchandise inventory audits and have put together a list of the top five. By eliminating (or minimizing) these basic mistakes, your inventory audit will be much more organized and accurate.

company, you expect them to conduct the inventory with as little help as possible. But how long do you want them in your store? Improper store staffing levels during an inventory can make a process that should normally take a day or two last as long as four or five days. The secret to a successful inventory is to make sure your manager or experienced employee is there for the entire inventory process. They can help the inventory team find merchandise on the floor or in the back room. The goal of the inventory audit should be to complete the inventory process as quickly and as accurately as possible so business will not be interrupted.

Mistake #1: Failure to Plan An inventory process needs to be planned before being conducted. Planning means making sure everything that is needed to complete the inventory is ready. Organize the merchandise in your store in a manner that can easily be counted. As an owner or store manager, you know your inventory better than anyone else, but will the person who counts the merchandise be able to find everything? Ask yourself: • Are all products available to be counted? • Is the merchandise priced properly? • Is any merchandise hidden from view?

Mistake #3: Unverified Merchandise If you are conducting an inventory in your store and the merchandise cannot be verified, then the merchandise is missing. Comments such as, “That merchandise is out for repair,” or “It is being appraised,” may be true, but if you don’t go through the extra step of calling the vendor involved in the repair or appraisal, then you are leaving yourself open for future losses. This goes for internet sales as well. If an item has been sold on the internet, you should have paperwork that proves it. In the past few years, the internet (“e-sales”) has opened up an entirely new avenue for employees to steal.

Mistake #2: Inexperienced Staffing If you contract an outside inventory

Mistake #4: Missing Merchandise Accounting for missing merchandise can be one of the most aggravating mistakes when conducting an inventory. Prior

Tony Gallo Senior Director, Sapphire Protection Alan Derrett Director of Inventory and Business Process Improvement, Sapphire Protection. Tony Gallo has over 30 years of experience in the pawn and retail loss prevention, audit, safety, and risk/emergency management fields. Alan Derrett is the Director of Inventory and Business Process Improvement for Sapphire Protection with over 20 years of experience in pawn audit and inventory control, retail, firearm, and state/federal regulatory compliance fields. Contact them at sapphireprotection.com or follow them on Twitter @SapphireProtect

(Continues on page 22)

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business sense (From page 20)

Making It Count to the inventory audit, the store should correct its inventory system and write off any missing merchandise not in the store. Mistake #5: Unmarked Inventory If possible, unmarked inventory should be resolved prior to the inventory taking place. During the inventory, set up a “trouble area” for merchandise that is missing tags or stock numbers. After the inventory is completed, this merchandise should be compared to the missing merchandise list. Then a decision should be made by management to enter it back into the system as a new item or to dispose of it. Worst Mistake The most egregious mistake we have seen by managers and owners is not conducting an inventory audit at all. Some of the reasons given for not conducting an inventory audit are, “I don’t want to know what is missing,” or “I don’t want to know that someone is stealing from my business.” We know audits are an expense in time, resources, and money, but the expense of an audit is minimal compared to not knowing if someone is stealing from your business. Not only does not knowing what is in your inventory have profitability implications, but you expose yourself to ethical and integrity issues from both employees and customers. If you do not conduct an inventory audit, you are sending a message to your employees that you don’t care what happens to the merchandise. If your employees don’t see you placing value on the inventory in your store, they will place little value protecting it from theft. We hope these tips will help you in your inventory management process. Remember to prepare, staff properly, verify, write-off and, most of all, conduct an inventory at least once a year. Be safe and be profitable.

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Business Sense

Get a Whiff of This

ScentAir Adds More to the Pawn Store Experience

by Edward Burke, Director of Marketing, ScentAir

Nobody ever asked you to stop and hear the roses. There is a reason for that. Our sense of smell is the most powerful of our five senses when it comes to emotion and memory. Different smells tell us more clearly and directly when it’s time to slow down, enjoy, and feel good about an experience. ScentAir helps businesses engage their consumers’ strongest sense to create tangible, positive results. As an Industry Partner member of NPA, ScentAir is working with pawnbroker locations across the country in an effort to create more pawn loan transactions per store as well as to improve their retail operations by fundamentally changing and improving the overall store experience.

How Scent Impacts Your Store Experience: • • • • • •

Connects with both customer segments – pawn loan and retail customers Differentiates it from other shops Promotes higher value perception of pawn loan experience and retail goods Improves overall perception of store experience Increases word of mouth Increases dwell time

But how and why does scent play such a powerful role in a consumer experience? Our sense of smell is deeply connected to the emotional and memory centers in the brain. • Up to 75% of our daily emotions can be gener ated by our sense of smell. • We remember what we see for around 30 days with about 40% accuracy, whereas we remem ber what we smell with 60% accuracy for more than a year.

When we think about a consumer experience, retailers often overlook the sense that is most likely to improve a consumers’ mood and to more vividly recall their experience. As a top priority, our customers in the pawn industry are generally looking to execute more pawn loans. To do so, there are certain critical elements of the experience, including scent, that are more likely to help make a first time customer feel good about the experience and then to positively remember the experience which leads to repeat visits and word of mouth. A growing pawn loan brand in Georgia looks to ScentAir to enhance two key pieces of their business: • Differentiate them from their local competitors. • Establish a strong bond with potential loan customers. They are also hoping to increase word of mouth advertising and create a higher value perception of the retail business by scenting their shop. The feedback from customers has been consistently positive and the operators are now looking at creating a signature scent for their locations to create a more consistent and positive brand experience. ScentAir also helps companies that sell lightlyworn goods who seek to improve their consumers’ impression of their goods. For example, Plato’s Closet, a Winmark Brand, uses ScentAir to improve their overall store experience. The fragrance in the (Continues on page 59)

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business sense

Posting for Profit

Understanding the New Facebook

Pawnbrokers are using Facebook more than ever, and they are citing an increase in sales and brand awareness as the primary reasons. But the way Facebook works is changing at a rapid pace. Many pawn store owners are surprised to learn their Facebook posts are not seen by all of their followers. Below are some valuable tips and information to make sure your posts break through to your customers by converting “likes” into sales.

Company Posts Seen By Fewer Fans

In the early days of Facebook, businesses used Facebook as a free marketing tool. However, pressure to produce revenue changed the way the company operated. Facebook began to limit the number of posts that were “organically” seen in order to encourage companies to post more engaging content, photos and videos, as well as participate in paid advertising. In 2012, Facebook stated that without paid promotion, “Company pages organically reach about 16 percent of their fans on average.” A recent study by Ogilvy & Mather, an international advertising, marketing, and public relations agency, stated that companies’ posts dropped from 12 percent of their

followers in October 2013 to just six percent by February 2014. Tech blog, Valleywag, reported that Facebook is planning to eventually reduce this to just one to two percent of followers. This change will be a blow to pawn stores who have counted on it as a free marketing platform.

Personal Page vs. Company Page

Many pawnbrokers started out by setting up a personal Facebook page on which they posted news and information about their businesses. There is now a “company” page where all business or marketing posts should be made. You can manage your store’s Facebook presence without compromising your personal Facebook identity (or those of your friends) by using your personal account to manage the company page. Additionally, anyone who has liked your company page can be assigned an administrator role on the account. This feature will allow you and other staff members to manage the page.

Emmett Murphy 3CLiCk Media

The Myth of Facebook

Facebook may not be the persuasive marketing tool that pawn stores once thought it could be. A recent Gallup (Continues on page 59)

Top 5 Tips for Holiday Facebook Marketing 1 Show how your pawn store can be a “curator” of great gift ideas to holiday shoppers who are overwhelmed with choices. 2 Be creative by using visual content—photos, memes and videos—to catch your customers’ attention.

3 Use bite-sized content and lists that offer value. 4 Think about all of the holiday moments that will

inevitably happen and plan your content in advance. 5 Post useful solutions to your customers’ problems to reduce their holiday stress.

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member news

Smile for the Camera

Surveillance Equipment is Key Element in Robbery, Theft, and Burglary Investigations

by Doug Davis, Founder/President NCIC, and Bryan Davis, Forensic Computer Investigator

During the past several months, the Numismatic Crime Information Center has assisted in the investigation of several coin and pawn store burglaries across the country. In each case, the quality of the recorded video was inadequate for law enforcement investigators and prosecutors to use for evidentiary or identification purposes. Store owners utilizing video surveillance as a crime prevention strategy should periodically evaluate their system to determine its effectiveness in identifying criminals during the commission of an armed robbery, burglary, fraud, or theft. Surveillance video footage from a properly designed and maintained system should provide clear identifiable information to investigators during a criminal

investigation. Surveillance cameras need to cover a wide area so they can provide valuable evidence including the criminal act itself, direction of travel, objects touched (for fingerprint retrieval), accomplices, and potential witnesses. The following information should be considered when maintaining a video surveillance system: • Identify current and future needs based upon operational requirements. • Maintain files on all video surveillance equipment and keep them for no less than four to six months. • Sketch out a floor plan to determine strategic camera locations. • Install/evaluate cameras at entrances and exits in order to provide clear views of anyone entering or leaving the business. • Provide video coverage to monitor areas where transactions and interactions occur between employees and customers. • Provide video coverage in safe and vault areas. • Consider ceiling-mounted dome cameras for overall views of shop. • Evaluate/test recording medium to insure adequate quality to identify offenders. • Make sure images produced are in a format that your local law enforcement agency can use. • Check system on a daily basis for clarity and proper operation. • Develop a retention schedule for stored data. • Train employees on system operations. • Develop a maintenance schedule conducted by a qualified technician. (Continues on page 59)

27 | National Pawnbrokers Association | fall 2014

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membership

New Member Benefit for 2015! SESCO Management Consultants to Provide FREE Human Resource Services to NPA Members

NPA has negotiated a free human resource and employee relations consulting program available for all members. SESCO Management Consultants, the oldest human resource and employee relations consulting firm in the country, will provide the following professional services at no charge to members:

• Unlimited telephone, research, fax, and email consulting on a daily or as needed basis. This “hot line” is provided to members to solve problems including discipline, termination, workers’ comp, unemploy ment, and other employee problems on a daily basis. The SESCO staff also provides professional advice on all federal or state laws to include equal employment, wage and hour accounting, Family and Medi cal Leave, Americans with Disabilities, harassment, and all other labor and employment laws. • Free analysis of your personnel policies, work rules, and employee handbooks on an annual basis. The review is designed to determine compliance with federal and state employment regulations as well as to provide recommendations so your organization is protected and can defend any alleged wrongdoing. • Monthly electronic version of our newsletter, The SESCO Report • Human Resource webinars • Employment Poster Compliance

Additional compliance services and project work available to NPA Members for a discounted rate upon request:

• ADA (Americans with Disabilities Act) Compliance Services • Affirmative Action Programs • Applicant Screening–Workplace Reference Checks • Audio-Visual Communications (Orientation Benefits - Handbooks) • Benchmarking/360° Assessments • COBRA Compliance Reviews • Compensation Systems • Competency Compliance • Compliance Assessments • Management Union Avoidance/ Communication Campaigns • EEOC Investigations • Employee Opinion Survey Programs • Employee Benefits Communication • Employee Coaching/Counseling • Employee Discipline Programs • Employee Orientation Programs • FMLA (Family and Medical Leave Act) Compliance Services • Federal Wage-Hour Investigations • Grievance/Complaint Procedures • Team Development/Conflict Resolution

• Handbooks for Employees • Handbooks for Supervisors • Job Descriptions/Job Evaluation • Labor Negotiations • Leadership Development • Applicant Assessments/Testing • Management Assessment and Appraisal Programs (MAAP) • Management Development Seminars and Workshops • Certified Management Training • NLRB Investigations • Organizational Development/Team Building • Outplacement Counseling • Performance Appraisal Systems • Personnel Forms Development • Personnel Policy/Procedures Manual • Pre-Employment Screening, Background Checks, Recommendations and Instruments • Sexual Harassment Awareness Training/ Investigations • Employee Retention Systems • Union Vulnerability Audits • Wage-Benefit Surveys (Continues on page 57)

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membership

Cash in on These Savings

NPA Announces New Member Benefits for 2015

Membership has its privileges and NPA members are in for a real treat! Two exciting new benefits are being revealed that you will want to take advantage of in 2015.

Human Resources Services by SESCO Management Consultants

$2500 value!

This human resource and employee relations program is available to all members and is free with your membership. Consulting services on a vast array of employee issues and an analysis of your personnel policies, work rules, and employee handbook are all provided at absolutely no charge to you. This service, valued at $2500, will save you hours of time by providing you with the information you need to stay in compliance. Plus, you will have peace of mind knowing your human resource practices are in place and up-to-date. Additional services are also available at a discounted rate.

Title 31 US Patriot Act Compliance Program by RMF Consulting Group

Over $500 in Savings!

RMF Consulting Group is proud to announce an exclusive arrangement for NPA members only. RMF is offering significantly reduced prices for a complete Title 31 US Patriot Act Compliance Program which also includes Title 26 8300 rule requirements as well as Red Flags requirements. Federal law requires dealers in Precious Metals and pawnbrokers to comply with certain requirements. Ensure government compliance, keep regulators and state auditors happy, and promote good bank health. Included in this comprehensive package: q Anti-Money Laundering (AML) Compliance 4 Program for Pawnbrokers (for those who do not meet the Dealer in Precious Metals requirements) - $149 per member company/ $25 per additional location 4 q AML Compliance Program for Dealers in Pre cious Metals (combined with Pawn) - $229 per member company/$25 per additional location 4 q 8300 trade and business policies and procedures

4 Identity Theft Red Flags policy and procedure q manual - $39.95 per member company/$10 per location 4 Complete Appendix including training logs, q internal monitoring logs, and compliance of ficer certifications 4 One hour of review and implementation q 4 Discount on required annual independent q review (Dealers in Precious Metals) - $400 per annum

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Don’t let your NPA membership lapse. Renew today! “Our numbers have doubled since joining the NPA and I believe a lot it has with “Our numbers have doubled since joining the NPA and I believe a lot ofof it has toto dodo with the information and shared byadvice the more experienced pawnbrokers. If I pawnbrokers. never attend another NPA theadvice information and shared by the more experienced convention the Member Forum pays for my membership over again.” Theagain, Member Forum pays for my membership over andover overand again.” - Scott Paulsen, Peninsula Pawn

New benefits for 2015 • Education Certification Certification Program Program -- 40% Discount • Anti-Money Laundering Manual Flags Policy - $500 • Anti-Money Laundering Manual andand RedRed Flags Policy - $500 value • Human Resources Consulting (unlimited telephone consultations) - $2500 • Human Resources Consulting (unlimited telephone consultations) - $2500 value • Young Professionals Group

Remember to use these other NPA member benefits: Member Forum: An online information exchange for pawnbrokers Pawn Expo: “Learning never stops for today’s pawnbroker. From networking with pawnbrokers literally from around the world, timely educational seminars, and an exceptional trade show with our industry specific vendors, Pawn Expo provides that unique opportunity to gain nuggets of information that will improve your operation, add to your bottom line and expand your knowledge base.” – Scott Amberg, EZ Pawn of Panama City, Panama City, FL Verified Member Seal: Letting your customers know you are a “Professional” Advocacy: Industry lobbyist and Regulatory Counsel in Washington, DC, alerts and notifications on developing issues

NPA PAC: Have a role in impacting legislative contests to protect the pawn industry Mentor Program: “We’ve been NPA members for years but were having trouble managing the growth of our store. Our NPA mentor helped us avoid costly mistakes during this phase and our new systems will guide our growth in the future. I could not have asked for better support.” – Martin Strasser, Premier Jewellery and Loans Inc., Kelowna, B.C., Canada Gift Day: Participate in NPA Gift Day by donating to Mr. Holland’s Opus Foundation FBL: Sponsor college students through the Future Business Leaders scholarship fund Pawn PR101: Prepare to interact effectively with the media with the Pawn PR101 handbook

Federal & State Labor Law Posters: Assure you are in compliance with notification requirements

Send in your renewal form now or renew online at NationalPawnbrokers.org/Renew

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10/28/14 8:15:18 10/20/14 9:45 AM

membership news

NPA’s New Certified Pawn Professional Designation

Set Yourself Apart With New Mark of Distinction Good news: The economy is growing and 2015 is expected to be a banner year. Bad news: Get ready for even more intense competition.

Differentiating your business from other pawn stores must be your highest priority. It is how you will successfully meet the challenge of more competition. Your objective is to position your store as the customer’s first and only choice. There are four ways to differentiate your business: • Price – Customers view your prices as espe cially competitive. • Value – This represents the something extra that you offer, like special coupons, two-for-one offers, a “no questions” satisfaction guarantee, and other incentives. • Convenience – It must be very easy to do business with your store. • Trust – Customers view you and your staff as uniquely knowledgeable, dependable, and honest. Establishing a bond of trust with your customers is, by far, the most powerful and long-lasting way to set your business apart and, therefore, demands most of your attention. Think about other industries and professions. Let’s say you require surgery. Several surgeons are available, but only one has earned the FACS (Fellow of the American College of Surgeons) designation. Who do you choose? If you need a retirement or estate plan, would just any financial planner do? Or might you select the one who is a Certified Financial Planner (CFP)? Likewise, if you need a precious stone appraised, wouldn’t you prefer to engage a GIA Graduate Gemologist? The same will soon be true of pawnbrokers. Consumers know that professional designations are important. Earning one sets you apart. You have passed a rigorous examination, agreed to conform to a code of conduct, and committed yourself to periodic continuing education to ensure that you always remain knowledgeable.

NPA is excited to share the design of the new CPP designation. In the future, it will become the recognized mark of distinction among those in our business. Because not all will pursue the designation, those who do earn it will have differentiated themselves from their colleagues. In the months ahead, we will share more exciting details of the CPP designation program. You will learn how the program is being created, how you can become involved, what topics will be included, and how you can take advantage of this new competitive resource. Look for more details in our next issue.

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1 877 4 0 SHRINK www.tjs.com 32 | National Pawnbrokers Association | fall 2014

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legal news

Johnny Comes Marching Home…To the Pawn Store Information on the SCRA Regulations

The Department of Defense is currently proposing a rule to amend the regulations of the Military Lending Act (MLA). The MLA originally provided a benefit to servicemembers that limited the amount of interest that a creditor can charge on “consumer credit” to a maximum annual percentage rate of 36%. The proposed amendment to the MLA would extend these protections to apply to other types of creditors and borrowers. However, as of now, this extension will not apply to pawnbrokers. Nevertheless, pawnbrokers should be aware of the benefits currently in effect under the Servicemembers Civil Relief Act, which provide certain protections for servicemembers who are called to active duty. In 2003, Congress enacted the Servicemembers Civil Relief Act (SCRA) to mitigate the hardships servicemembers face when called to active duty. Where applicable, the SCRA sets an interest rate cap at 6% and places multiple limitations on the enforcement of liens and other contractual agreements. These benefits apply to those service members who are called to active duty after pawning an item. In this case, the servicemember is entitled to the interest rate and forfeiture protections of the SCRA. The SCRA’s protections apply when the pawn customer is called to active duty and continue until 90 days after the customer’s active duty ends. Imagine a scenario where a customer walks into your pawn store and pawns his watch. After pawning the watch, the customer is then called to active duty and is sent overseas for a year. During this year, the item is neither redeemed nor is interest paid. If you

sold the watch without first obtaining court approval you could be held liable for wrongfully violating the rights of a soldier called to active duty. Courts typically view the protections provided by the SCRA in a light most favorable to servicemembers. For instance, in United States v B.C. Enterprises, Inc., in a situation very similar to the one described above, the United States District Court for the Eastern District of Virginia found that a towing company was strictly liable for seizing and selling at auction the vehicles of active duty servicemembers. As a strictly liable defendant, the towing company was still responsible for its actions regardless of whether it exercised the utmost care in investigating the victim’s military status. Finally, it is important to understand that the benefits of the SCRA only apply in situations where the servicemember is called into active duty after a loan is made. In order for the servicemember to receive the interest rate cap benefit, he must provide written notice to the pawnbroker requesting a reduction of the interest rate in writing along with a copy of the servicemember’s active duty orders. However, as it pertains to the benefit of limitations on the enforcement of liens, the servicemember has no duty to notify the pawnbroker. A more detailed analysis of the SCRA, along with many other topics pertaining to pawnbrokers, can be found in the new critically acclaimed book, Federal Laws Affecting Pawnbrokers, co-authored by Dr. Wayne M. Babovich and Kurt A. Offner. The book is available at lawofpawn.com.

Kurt A. Offner Attorney at Law Offner, Scott & Inzina, APLC (504) 264-1057 kurt@osilegal.com

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business sense

So…Who is Insured? How to Make Sure Your Business is Covered locations) on a sheet of paper and hand the list to your insurance agent. Have them confirm they are listed on all of your policies. Sometimes, because of ownership differences or tax planning, it may not be possible to have all the business entities insured together on the same policies. If that is the case, just make sure your businesses are listed on the correct policy. Not all Insureds are the same. It can make a difference from policy to policy. Under a Commercial General Liability (CGL) policy, automatic coverage is provided to the following if you are designated in the Declarations page of the Policy as:

One of the most common mistakes people make when applying for insurance is leaving off one of their business entities or providing an inaccurate/ incomplete entity name. At the top of every insurance policy is the Named Insured. All your legal entities should be listed. It may be the name of a sole proprietor or a separate operating company. Or maybe it’s an LLC that owns your real estate or a separated company that employs your workers. In any event, all your business entities, including those you operate as a “DBA,” should be named on all your insurance policies. When applying for insurance, accurately list all your businesses (and

A. An individual - You and your spouse are insureds, but only with respect to the conduct of a business of which you are the sole owner. B. A partnership or joint venture - You are an insured. Your members, your partners, and their spouses are also insureds, but only with respect to the conduct of your business. Remember to confer with your attorney as to whether it is in your best interest to have a business in your personal name or a partnership. You may be opening up all of your personal assets to attack as there is no legal curtain to stand behind as an individual, sole proprietor or a partnership. C. A limited liability company - You are an insured. Your members are also insureds, but only with respect to the conduct of your business. Your managers are insureds, but only with respect to their duties as your managers. D. An organization other than a partneship, joint venture or limited liability company You are an insured. Your “executive officers” and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are also insureds, but only with respect to their liability as stockholders. E. A trust - You are an insured. Your trustees are also insureds, but only with respect to their duties as trustees.

Lastly, there are two key points you need to pay special attention to: 1 You will only fit the definition of one of the above insureds if you or your business(es) are NAMED on the declarations page of the policy or by endorsment to the

Scott Sweeney Commercial Lines Coverage Specialist, Marshall & Sterling Scott Sweeney is a Commercial Lines Coverage Specialist (CLCS) with Marshall & Sterling, one of the nation’s largest independent insurance agencies. Scott specializes in insurance for pawnbrokers, check cashers, and other unique businesses. Contact Scott at ssweeney@ marshallsterling.com.

policy, commonly referred to as a Named Insured(s). 2 You are only an insured under the policy as respects your duties in the conduct of business for that Named Insured.

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business sense

Erase This Message

Best Practices for i-Device Intake and Resale

iPhones, iPads, and iPods can be very profitable for pawn shop owners, but they can also present a risk. Because of their value, they are often targeted by criminals. Apple’s recent “kill switch” feature has succeeded in reducing iPhone robberies over 20131 in New York City, San Francisco, and London, but it has also made it more difficult to process i-devices, in general, due to password and account verifications. To help ensure you can properly process i-devices and to verify they aren’t stolen, the right procedures can make all the difference. We’ve talked with a large number of our SystemSaver Pawn customers and created a set of best practices when dealing with these devices. Determine if the “Activation Lock” is on. If it is, it will prevent you from erasing and reactivating the device, so this is a critical step. a. Find the Electronic Serial Num ber (also called an ESN) or IMEI. For iPads and iPods, you can locate the ESN or IMEI on the back of the device. For iPhones, go to “Settings,” “Gen eral,” and then “About.” b. Enter the ESN or IMEI at www.icloud.com/activationlock/. Be sure the device has “Find my iPhone” turned off. a. Open “Settings” on the device. b. Choose iCloud. c. Set “Find my iPhone” to OFF. Remove the device from the iCloud account belonging to the pawn cus tomer. Use any personal computer to accomplish this. a. Power the device off. b. Login at www.icloud.com using the customer’s iCloud credentials.

c. Choose “Devices.” d. Click the “Delete” icon for that device. Make sure the device is unlocked so that no four-digit PIN is required when turning on the device. To unlock the device, go to “Settings,” “General,” and toggle “Lock/Unlock.” Many pawnbrokers factory-reset devices before offering a collateral loan to limit liability during storage. Make sure it is VERY CLEAR to the loan customer that you will be reset ting their device, so they don’t lose any important data. Use cleaning software, such as Wipe Drive Mobile, to protect the custom er’s information from being retrieved or recovered. The loan customer can back up the device to iCloud BEFORE removing the device from their account to prevent loss of important information. When a store follows the steps above, nearly all stolen devices will become apparent before a loan is given. If the pawn customer cannot gain access to the device due to a four-digit PIN, this is an indicator the device may be stolen. Likewise, if a client is unable to remove the device from their iCloud account, this is a huge red flag indicating the device is likely stolen. In many cases, offering access to wireless Internet at the store (for the purpose of removing devices from iCloud) eases the process for loan customers. Most pawn customers need help to remove their device from their iCloud account, so be ready to offer them assistance. Exemplary customer service will help earn you a lifetime-customer. For more information about White Canyon’s products, visit whitecanyon.com.

Todd Kleinert Acting Product Manager for SystemSaver Pawn, todd.kleinert@ whitecanyon.com

1. http://online.wsj.com/articles/decline-in-theft-of-apple-iphones-points-to-kill-switch-1403217173

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compliance

NICS News

Extended Hours for Black Friday

With peak season upon us, the FBI Criminal Justice Information Service Division’s National Instant Criminal Background Check System (NICS) Section is announcing extended hours of service on November 28, 2014, (“Black Friday”) for E-check Users and state Point-of-Contact (POC) programs. To better accommodate the long standing history of recordbreaking volume on this day, the FBI will bring the NICS in-service starting at 4:30 a.m. EST for NICS E-check users and for state POC programs. The NICS Contracted Call Centers will open, as normal, at 8 a.m. EST. The NICS E-Check provides an improved user-friendly experience in navigating firearm checks and is a valuable tool for the FFL throughout the year, especially during the peak gun purchasing season. The NICS E-Check allows you to access the system from any computer or any browser. The FFL and/or manager receive administrative controls, which includes the ability to create and modify employee E-Check accounts. The NICS E-Check does not require a digital certificate to be downloaded to your computer. This makes it easier to use the NICS E-Check from any browser using a computer, laptop, tablet, smart phone, etc. You simply log in to the NICS E-Check using a user name and password. The NICS E-Check still offers the same traditional benefits of utilizing the online method, many of which are listed below: • Ability to retrieve background checks 24/7 regardless of whether initiated on NICS E-Check or at the NICS Contracted Call Center • Ability to print completed NICS background check search requests

• The availability of messages regard ing NICS operational status • Added customer protection against identity theft • Added safeguard against theft of license number and codeword To register to use the NICS E-Check, follow these instructions: • Visit the FBI NICS E-Check Web site at www.nicsezcheckfbi.gov. • Click on the link that states “Register to use the FBI NICS E-Check.” • Agree to the Terms and Conditions. • Complete the Account Request form. • Click on the “Registration” block at the bottom of the page. • An Account Request Confirmation page appears. • Click “Show populated enrollment form” block at bottom of page. • Print and sign the completed enroll ment form. • Fax form to 1-888-550-6427 or e-mail it to fbinicsteamcc@leo.gov. • A user name will be e-mailed to the e-mail address you provided during registration. • Additional instructions will be pro vided in the e-mail on how to obtain your password.

Kim Brown NICS Section FFL Liaison Specialist nicsffl@leo.gov

***Submit only one registration and enrollment form. This employee will be the administrative user and will create accounts for other employees. You may designate other employees as primary users (administrative users) and they will also be able to create and modify accounts. You may access the complete NICS E-Check User Guide at www.nicsezcheckfbi.gov. Click on the “Access the FBI NICS E-Check Help Pages” link and then “User’s Guide (PDF).” (Continues on page 56)

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community relations

Spread the Joy of Music Participate in NPA Musical Instrument Gift Day on December 6

www.GiftDay.org

December is nearing, and you know what that means: It’s time to get ready for the National Pawnbrokers Association Musical Instrument Gift Day! On December 6, 2014, NPA is celebrating its sixth annual Musical Instrument Gift Day when pawnbrokers from around the country make generous donations of musical instruments to organizations in need. Last year, Gift Day worked with The Mr. Holland’s Opus Foundation to donate funds and new and gently used musical instruments to Lee High School in Huntsville, AL. This year, the NPA is encouraging members to host their own local Gift Day event. This grassroots approach will allow each pawnbroker to donate to an organization of their own choosing.

You Can’t Afford to NOT Participate

A Gift Day event in your community will generate press coverage on a local and national level that will broadcast a positive image of your business and the pawn industry. • Research shows that children who study music excel in mathematics, language and reading development, and critical thinking skills. • Veterans hospitals, musical groups, Boys and Girls Clubs, or other organizations in need can greatly benefit from your support. • The added advantage of a tax write-off makes your donation beneficial to everyone.

Register to host a Gift Day event in your community at GiftDay.org. Once you have registered, you will receive a confirmation email from an NPA representative and a copy of the “Gift Day Guide” to assist in planning, publicizing, and hosting your Gift Day event. The guide includes Gift Day logos, ideas for getting news coverage, tips for how to plan the “big day”, and much more.

Since 2009, hundreds of musical instruments have been donated to deserving schools, veterans organizations, and other groups in need.

This year, there are many ways to get involved: 1. Host a Gift Day donation event in your community. 2. Form a coalition with neighboring pawn stores to pool donations. 3. Make cash donations or ship high-quality, pre owned (or new) musical instruments directly to the NPA’s official musical instrument charity, The Mr. Holland’s Opus Foundation.

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State News

State Association Updates What’s going on across the Country

ALABAMA

Manera Saloom-Branstetter, President Alabama Pawnbrokers Association manera@best-pawn.com On October 5-6, 2014, many Alabama Pawnbrokers Association (APA) members met in Birmingham, AL, for the annual meeting. This meeting was to introduce new members to the association, renew membership collaboration, listen to informative speakers, and to continue sharing ideas among members. Speakers included experts on recognizing internal theft, social media advantages, and the value of collectible silver. The State of Alabama Banking Department gave a report on their annual audits to the membership. Additionally, the Bureau of Alcohol, Tobacco, and Firearms also generously gave us some time to ask questions to help maintain compliance. Fran Bishop and Mike Weeks, the lobbyist for the APA, led a very informative session about legislation on the horizon for pawnbrokers both locally and nationally. One hot topic discussed was the bank discontinuance that many members have already experienced nationally. As always, we hope that everyone supports their local and national pawnbrokers’ associations and is involved in both the grassroots campaigns and the national campaigns that will continue to shape our industry. It is our continued collaborative efforts that will help ensure that the industry remains an intact and lucrative venture for future pawnbrokers.

ILLINOIS

Kelly J Swisher, President Illinois Pawnbrokers Association arlingtonloan@sbcglobal.net On September 14, 2014, the Illinois Pawnbrokers Association (IPA) held its semi-annual fall meeting in Champaign, IL. We had two great speakers: Jack Brown, Mid-States Recycling, and Bob Frimet, RMF Consulting.

Jack gave an informative presentation on spotting fakes and frauds in the bullion/metals market. Bob gave us an in-depth look at our Anti-Money Laundering (AML) requirements and how we should be complying with them. We also discussed Red Flag programs that affect every pawnbroker. I think most pawnbrokers are under the assumption that if they don’t do large dollar loans (over $10,000), they don’t need to worry about an AML program. However, if you are a dealer in precious metals, you must have an AML program in your store even if you never write a loan for $10,000. The IPA sent an invitation to every pawnbroker in the state (just over 265) with the exception of the publicly-traded companies. As usual, the IPA meetings were open to members as well as non-members, and we had nearly 40 pawnbrokers in attendance. This leads to a few questions that I would like to pose to pawnbrokers in Illinois. 1. Why wouldn’t you come to a free meeting that would teach you something about your indus try that you may or may not know? 2. Why wouldn’t you want to have in-person ac cess to your state regulators to ask them any questions you may have about how your op eration is run? 3. Why wouldn’t you want to hear what is hap pening in Springfield? We have some serious issues on the horizon - things that are not go ing to be discussed in a magazine article until after they have been resolved. The IPA has two meetings a year. It is not that much of a time commitment. Please consider coming to a meeting the next time you receive an invitation.

MISSOURI

Rob Lauer Missouri Pawnbrokers Association rob@pawncenter.com Earlier this year I met with a delegation from the St. Louis County Police Department. They asked if Missouri pawnbrokers would consider a change to our statute that would allow customer

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State News

information be given directly to law enforcement. They stated LeadsOnline is raising the fees to law enforcement by a very substantial amount and felt they could no longer afford the expense. Currently, the law directs that customer information be given to a third party. However, our statute does not allow pawnbrokers or pawn customers to pay any fee to a third party. I voiced my concerns about privacy and said I could not recommend their proposal to the membership. I expect there will be an attempt at changing the statute in the upcoming legislative session and I have alerted our lobbyists and the new Speaker of the House. Ferguson The rioting and looting that took place in Ferguson and surrounding neighborhoods did result in two pawnshops being looted. One store was damaged extensively and hard goods were stolen. The other had building damage only. Even though we were directly in the middle of the protests, our store was extremely fortunate and suffered no damage due to the strong police presence on our parking lot. Thanks to the many pawnbrokers who contacted us to make sure we were all okay.

NEW YORK

Eric Modell, President Collateral Loanbrokers Association of New York eric@modellfinancial.com Local Law 149 of 2013 was due to be enacted on September 16, 2014. This law would require, among other things, the uploading of transactional data to LeadsOnline. The Collateral Loanbrokers Association of New York (CLANY) filed a lawsuit challenging the constitutionality of the law shortly after it was published. The first step in our action was to obtain a temporary restraining order to stop the law from going into effect. In the weeks prior to the enactment date, CLANY reached a deal with the city to maintain the “status quo” until the matter can be heard before a judge. That means pawnbrokers do not need to change their business practices at this time. Specifically, electronic records are not required, photographs are not required, and most importantly, daily data transmissions of transactional records are not required.

Every pawn store in New York City should have a copy of the agreement. If you do not have one, please contact CLANY, and one will be provided for you. We remain confident that we will be successful in our litigation. Pawn store operators in New York City are reporting that NYPD and Department of Consumer Affairs (DCA) inspectors are still coming to their stores informing them of the need to participate with LeadsOnline. In several cases, NYPD and DCA have issued summonses and/or violations to these businesses. These will be dismissed. CLANY is asking all pawn stores, regardless of membership status, to inform us if, and when, law enforcement pushes operators to participate with LeadsOnline or, more importantly, if they issue a violation or summons. Any violation or summons issued is a breach of the agreement, and it is essential that CLANY be informed as to these events so that they can be included as part of our complaint.

OHIO

Lou Tansky, President Ohio Pawnbrokers Association lou@unclebenspawnshop.com We have just ended our national, state and local mid-term elections. The lame duck session we currently find ourselves in is a time we need to be particularly attentive and observant about what is going on in the Ohio State House. Those who would seek to harm our members, independent pawn licensees in Ohio, might find this a good time to try to get harmful amendments introduced into pending legislation. We must remain vigilant. How do I do this, you ask? We continue practicing the grass roots politics we have done for many years. We have been successful in curtailing the efforts of large, publicly owned, out-of-state payday and pawn operators who have tried to put us out of business. Continue to make those calls to your current or recently elected legislators. Invite them to your place of business. Remind them that you supported them and ask that they support you. Ask them to commit to protecting you from the numerous attempts from other companies to radically change our Ohio Pawnbrokers Act. Remind them about: • limiting new licenses to three cities in the state (Cleveland, Columbus, Cincinnati) (Continues on page 55)

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Community relations

Help a Student in Need

Now Accepting FBL Scholarship Applications for 2015

Attending college can be a financial drain on families. If you know a family or student who could use some extra help with their college expenses, consider sponsoring them for one of the $1,000 Future Business Leaders (FBL) scholarships. Each year, NPA selects scholarship winners based on academic performance, community leadership, and a written essay. Since 2003, FBL has awarded $125,000 in scholarships to deserving students. As a member of the NPA, this is an excellent opportunity for you to give back to your community. You can find the guidelines and application form at NationalPawnbrokers.org under the Community Relations tab. The deadline to receive applications is April 25, 2015. If you do not know anyone to sponsor, but would like to contribute to the scholarship fund, send your check to NPA, PO Box 508, Keller, TX, 76244.

FBL scholarship recipient Daniel Rovak (second from left) poses with Gary Rovak, Carmencita Schoeneman, and David Schoeneman, from Shaneâ&#x20AC;&#x2122;s-The Pawn Shop, Chicago Heights, IL.

For credit card donations, call the NPA office at (817) 337-8830. More details and information on past scholarship winners can be found on the NPA website.

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State News

(From page 49)

State Association Updates

• proximity limitations • drastically increased monetary requirements • increased interest charges • reporting and holding time changes • state-sponsored government bailout of this company that invents ways to harm the inde pendent pawn licensee Remember your legislators actually do want to hear from you. Your job is to help save your business and that begins with getting involved.

OREGON

Josh Oller Oregon Pawnbrokers Association joller@pawntalk.com

vention. This exciting three-day convention was full of educational seminars, exhibitors, food, and the all-entertaining auction fundraiser and dinner. Thank you to all our exhibitors who supported us in this important annual event and to the attendees who gave their time. What’s this about, “You will never know until you go?” Our state meeting was well represented. As was reported, our state is facing some major legislative challenges for the 2015 legislative session. If you have not joined the South Carolina Pawnbrokers Association, now is the time. Be informed and be a part of the change that WILL affect all pawnbrokers in South Carolina. Contact Janis Feazelle at (866) 438-7296 for complete details.

All of us at the Oregon Pawnbrokers Association (OPA) would like to give a huge round of applause to Earl Oller. Earl had a vision 30 years ago of an association that would help regulate/ guide pawn shops in Oregon. He took it upon himself to create and actively serve as president of the association. Earl was instrumental in helping create positive legislation for the pawn industry, and on countless occasions, lobbied to defend against negative changes. With his hard work and persistence, he has changed the way our industry works and is viewed by the Oregon Legislature and community at large. We can’t thank him enough for all his hard work and insight. The Oregon Pawnbrokers Association is proud to welcome our new president, Steve Sousa, owner of All That Glitters, and longtime OPA member. We wish you luck, Steve, and know you’ll do Earl and the association very proud.

SOUTH CAROLINA

Janis Feazelle, President South Carolina Pawnbrokers Association pawnpeople@aol.com Pawnbrokers from South Carolina, North Carolina, and Georgia turned out in Greenville, SC, for the 2014 Southeast Regional Trade Show & Con-

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NICS News If you have questions regarding the NICS ECheck, please contact the NICS E-Check Customer Service at 1-877-FBI-NICS (324-6427), option 2, and then option 5. All other questions may be directed to Kim Brown, Liaison Specialist, at (304) 625-7387, or via e-mail kimberly.brown@ic.fbi.gov or Jill Montgomery, Supervisory Liaison Specialist at (304) 625-8252 or via e-mail jill.montgomery@ic.fbi.gov.

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Calendar of events

1/2015

SHOT Show

January 20â&#x20AC;&#x201C;23 Sands Expo and Convention Center, Las Vegas, NV shotshow.org Mailing Address PO Box 508 Keller, TX 76244 Physical Address 891 Keller Pkwy Suite 220 Keller, TX 76248 Phone: (817) 337-8830 Fax: (817) 337-8875 NationalPawnbrokers.org

NPA Staff

4/2015

2015 Dixie Conference & Trade Show

April 18-19 The Peabody Memphis, Memphis, TN Contact: Kevin Macdonald kevin@momentumpawn.com

NPA Legislative Conference

April 29 Washington, DC Contact: Matthew Church Matthew@National Pawnbrokers.org

Dana Meinecke Executive Director Dana@NationalPawnbrokers.org

5/2015

Helen Moore Director of Membership Helen@NationalPawnbrokers.org

May 15-17 Chicago Hilton/Indian Lakes Resort, Bloomington, IL Contact: Ron Stempkowski 1ipa@comcast.net

Lindsay Wilson Director of Meetings and Events Lindsay@NationalPawnbrokers.org

7/2015

Margie Swoyer Director of Communications and Marketing Margie@NationalPawnbrokers.org

July 7-9 The Mirage Hotel & Casino, Las Vegas, NV Contact: Lindsay Wilson PawnExpo@NationalPawnbrokers.org

2015 Midwest Pawnbrokers Convention

Pawn Expo 2015

Matthew Church Government Relations Administrator Matthew@NationalPawnbrokers.org Terri Congleton Administrative Assistant Terri@NationalPawnbrokers.org

membership (From page 29)

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Business Sense

member news

(From page 23)

(From page 27)

Get a Whiff of This

Smile for the Camera

store also assists in removing the perception often associated with resale stores and creates an environment that is fashion driven. ScentAir specializes in delivering the right scent, the right way, in the right place, and at the right time. Scent is the most powerful of our five senses and it has the potential to help you tell an even more compelling story to your customers and potential customers. Please reach out to us at NPA@ scentair.com, or at scentair.com to find out more.

The benefits of maintaining a quality surveillance system with well-placed video security cameras are the first line of defense for business owners. Just the mere fact of owning a system minimizes the risk of illegal activities, enhances a safe working environment, and provides law enforcement with a recording medium good enough for identification and prosecution.

Popular Scents for the Pawn Industry: u

Black Tea Fig

White Tea Fig

Golden Bamboo

A Walk in the Woods

Vanilla Woods

The Numismatic Crime Information Center is a 501(C)(3) non-profit corporation whose mission is to serve as a national and international resource for collectors, dealers, and law enforcement in the education, prevention, and investigation of crimes involving coins, paper money, tokens, medals, and related numismatic items. www.numismaticcrimes.org P.O. Box 14080 Arlington, Texas 76094.

business sense (From page 24)

Posting for Profit Poll, State of the American Consumer, discovered that 62 percent of U.S. adults who use social media claim that sites like Facebook have absolutely no influence on their purchasing decisions. 30 percent of adults say that social media has some influence while only five percent say they have a great influence. So is social media a poor advertising solution, or have businesses simply been using it poorly? While Gallup suggests that customers don’t flock to social media to engage with businesses, consumers are more likely to be engaged when brand related posts are authentic, responsive, and compelling.

Paid Advertising & Engaging Content

The best way for pawn stores to have a deep reach into their followers’ base is through paid advertising on Facebook. Facebook provides an ad service that allows businesses to create a daily budget to promote or “boost” a post. For as little as a few

dollars per day, you can dramatically increase the visibility of a post. Be selective about which posts you choose to boost. A surefire way to alienate your followers is by trying to fill their news feeds with advertising. Paid advertising cannot make up for good content, so using high quality images, compelling content, and a conversational tone will increase the amount of people that engage with your post. Stick to the “3-2-1” formula. Out of every five posts: • Three can be shared news or articles from existing online sources. • Two should be original, non-promotional content that you create. • One can be an advertising or promotional pitch. This formula ensures that your followers won’t be overwhelmed or annoyed by promotions and will have the opportunity to engage with your business on a more personal and social level.

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Index of Advertisers ADVERTISER Page

ADVERTISER Page

Aaria (248) 961-0506 AriaDiamonds.com

Steven Galapo Diamonds (212) 221-3000 GalapoDiamonds.com

ABC Diamond Buyer (586) 354-7274 ABCDiamondBuyer.com

National Shooting Sports Foundation (855) 355-7468 ShotShow.org North American Metals (800) 773-1626 NorthAmericanMetals.com

Stuller (800) 877-7777 Stuller.com

Padmavati Exports (212) 869-0544 PadmavatiExportsinc.com

The Trendz (866) 337-7464 TheTrendz.biz

Palak Diam (213) 228-0077 PalakDiamond.com

TJS (877) 40 SHRINK TJS.com

Pawnshop Academy (210) 787-2536 PawnShopAcademy.com

Tulsa Gold & Gems (800) 222-0573 TulsaGold.com

Pawnshop Consulting Group (954) 540-3697 PawnshopConsultingGroup.com

United Exports (305) 707-7937 UnitedExportsNA.com

Rapaport Auctions (212) 354-9800 RapaportAuctions.com

United Precious Metal Refining (800) 999-3463 UnitedPMR.com

Rapaport Jewelry Sales (212) 354-9800 RapaportAuctions.com

RMF Consulting Group (866) 204-7209 CheckConsultants.com

White Pine (646) 666-7588 WhitePineDiamonds.com

Rolland Safe (800) 225-2984 RSlc.net

Worldwide Diamond (213) 622-2191 WWDiamond.com

Hover & Strong 42 (800) 759-9997 HooverandStrong.com

Sanghavi Diamonds (800) 234-1787 NITIN40059@gmail.com

International Inside Front Cover Gemological Institute IGIonline.com

Stallcup Group (817) 479-3880 StallcupGroup.com

Bluestone Trading 37, Back Cover (888) 800-BLUE (2583) Bluestone-Trading.com The Buyers (562) 945-7276 TheBuyers.com

CompuPawn (866) 545-9868 CompuPawn.com

Dillon Gage (888) 436-3489 DillonGage.com

Garfield Refining (800) 523-0968 GarfieldRefining.com

Garrett Metal Detectors (800) 527-4011 Garrett.com

Gemological Institute of America 53 (800) 421-7250 Gia.edu Hi-Tech Precious Metals 26 & Refinery (866) 950-7528 HiTechPMR.com

56, 58

Wexler Insurance Inside Back Cover Agency (800) 432-1853 WexlerInsurance.com 28

The NPA does not specifically endorse any entity including but not limited to exhibitors and advertisers; makes no representations, warranties, or guarantees; and assumes no responsibility for the products or services provided by these entities. The NPA expressly disclaims all liability for damages of any kind arising from the use or the performance of the products or services provided by these entities.

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WEXLER INSURANCE AGENCY, INC.

INSURING

PAWNBROKERS

SINCE 1968

The Best Coverage at Competitive Prices Available Coverages: v Pawned & Owned Jewelry & Guns

No Coinsurance for: v Pawned & Owned Guns & Jewelry or Other Stock

v Pawned & Owned Other Stock

v Business Personal Property

v Memo

We pay based on your choice of the following:

v Products Liability for Guns & Ammunition

v Actual cost of the loan plus legally accrued interest

v And many more see back page

v 2 or 3 times pawn value

Wexler Insurance Agency, Inc. 1120 Ponce de Leon Blvd. Coral Gables, FL 33134 Tel: 305-445-5050 Fax: 305-448-8189 Nationwide: 1-888-4-WEXLER 1-800-432-1853 E-mail: info@wexlerinsurance.com

v Replacement Cost

New York Office 580 Fifth Avenue Suite 715A New York, NY 10036 Tel: 212-391-5211 Fax: 212-391-5212 California Office 2711 East Coast Hwy. Suite 106 Corona del Mar, CA 92625 Tel: 949-723-3835 Fax: 949-723-3839

Ohio Office 7363 E. Kemper Rd. Suite C & D Cincinnati, OH 45249 Tel: 513-891-2131 Fax: 513-891-2132

Ask about our exclusive Workers Comp program for Pawnshops which is available in all 50 states.

CALL 1-800-432-1853 FOR AN IMMEDIATE QUOTE OR VISIT US AT WWW.WEXLERINSURANCE.COM Wexler FP.indd 37

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888 800-BLUE (2583) • www.bluestone-trading.com • webinfo@bluestone-trading.com

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