National Pawnbroker Spring 2016 by National Pawnbrokers Association

Official Publication of the National Pawnbrokers Association

SPRING 2016

MILLENNIALS: CHANGING THE WAY WE DO BUSINESS

ONCE A-PAWN A TIME IN WASHINGTON

THE STATE OF THE DIAMOND INDUSTRY:

Rapaport Diamond Insights

NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

MESSAGE FROM THE PRESIDENT

Driving Success

Larry Nuckols NPA President

IT SEEMS EVERY YEAR opens with a new set of challenges for pawnbrokers. Whether it’s finding, training, and keeping the best pawnbrokers possible in your store, dealing with increasing competition from other pawn stores and retailers, changing technology issues, or increasing government regulations, it gets tougher every year to run our businesses. That’s why pawnbrokers need to have the best team possible on their side: the best banker, accountant, insurance representative, computer software provider, and the best industry association possible. The NPA has been working diligently to be your go-to partner in providing the contacts, services, and programs to meet the challenges that will help you and your business succeed. At the NPA Legislative Conference to be held in Washington, DC, on April 27, we will be working together to address the increased attention on legislative issues such as bank discontinuance and the Military Lending Act (MLA) that affect all of our livelihoods. Visit the NPA website to register and learn more about the impact this event can make.

Another way NPA can help you succeed is through our Certified Pawn Professional (CPP) designation program. Attend the Human Resources course at the Dixie Conference and Trade Show in New Orleans in March; the Federal Regulations course at the NPA Legislative Conference in Washington, DC, in April; and the Marketing, Advertising, and Public Relations course at the Midwest Pawnbrokers Conference in Kentucky in May. All six courses will be offered at Pawn Expo 2016 this July in Las Vegas. It is our goal as an association to make the CPP program an indispensable tool that will help our members compete and succeed in the increasingly challenging business environment we face today. More details about this program can be found at NationalPawnbrokers.org/about-theCPP-program. At Pawn Expo 2016, we look forward to great general education sessions and motivating material from Derek Daly, our keynote speaker, Crucial Conversations, the awardwinning corporate training program, and others. The trade show offers you an opportunity to get to know vendors and see their products and services firsthand. One of the greatest benefits is the opportunity to talk face-to-face with your fellow pawnbrokers. All of these are offered in an effort to make running your stores easier and more profitable. SESCO Management Consultants, a professional human resources consulting firm, and RMF Consulting, provider of AML/8300 compliance programs, offer business solutions to some of your most pressing issues. Gain access to one of the best networking resources by participating in the NPA Member Forum and get instant feedback from your fellow pawnbrokers who have been where you are. Finally, if you know someone who helps make the pawn industry a little better today than yesterday, visit the NPA website and nominate them for one of NPA’s Annual Awards. It takes all of us working together to keep our industry and association strong. I ask that each of you reach out to your friends and neighbors in the industry and encourage them to join us in our efforts. We need to continue to grow our membership to make all of this possible. I thank you for continuing to support our industry, and together, we will drive to another successful year.

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NATIONAL PAWNBROKERS ASSOCIATION

Table of Contents

SPRING 2016

PAWN EXPO DRIVING SUCCESS 2016: DRIVING SUCCESS JULY 12-14, 2016

THE MIRAGE Page 34 • LAS VEGAS

Contributors for this issue of National Pawnbroker

What is Pawn Expo?

HIGHLIGHTS

SAVE $170

Pawn Expo is the only national convention and trade show for the pawn industry. Attendees learn new ways to strengthen their businesses, connect with fellow pawnbrokers, and do business at the trade show featuring over 120 different companies. Leave energized and equipped with the latest industry knowledge.

Kathleen Barbee, Lombard Financial Services, Inc

by May 27 The State of the Diamond Industry Page 26 with early bird rates

Marketing to Millennials PAWNEXPO.COM

Page 46

Edward Bean, Suffolk Jewelers, Inc

IN THIS ISSUE

WHY SHOULD I ATTEND? Message from the President Message from the Executive Director 25 500+ pawnbrokers to connect with and learn from

120

education sessions

exhibitors with Community Involvement products and services to Invest In an Education, improve your business Invest In a Future

1 16 expert 4speakers

170

dollars in savings when you register by May 27

convention for the pawn industry

Questions? PawnExpo.com

Compliance Compliance: Fact vs. Fiction Government Relations Government Relations Update Winning the MLA Game NYC Pawnbrokers Fight for Business Records Privacy Rights Events 5 Reasons to Attend the Legislative Conference Member Spotlights Pawnbroker Spotlight: Ted’s Pawn Shop Young Pawnbroker to Watch: Randi Nell

Industry Partner Spotlight: Wexler Insurance Agency, Inc Behind the Scenes with Lindsay 1 can’t-miss Wilson

6 32 58

8 12

Fran Bishop, Dollar Pawn

16 23

Member News Young Professionals New NPA Members State Association News

44 54 62

Member Benefits NPA Annual Awards

Business Sense Marijuana in the Workplace Annual Operational Risk Assessment The Importance of Social Media Fake or Super Fake Lacking in Loyalty?

14 20 31 40 48

Book Corner Pawnder This Calendar of Events Index of Advertisers

44 66 68 68

Doug Davis, Numismatic Crime Information Center Marko Evans, CompuPawn, Vertical Computer Systems Robert Frimet, RMF Consulting Adam R Harris, National Association of Watch and Clock Collectors Jamie M Hasty, SESCO Management Consultants

Lauren Kaminsky Goldman, E Z Pawn Corp

Rudy Klancnik Emmett Murphy,

3 CLiCk Media, LLC

The Rapaport Group

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. © 2007-16 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: Will Bowling, WBCreative

NATIONAL PAWNBROKERS ASSOCIATION

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NATIONAL PAWNBROKERS ASSOCIATION

MESSAGE FROM THE EXECUTIVE DIRECTOR

On the Road to Success WELCOME TO 2016! While it’s already March,

we hope you’re well on your way to achieving all the goals you set out to reach at the beginning of the year. If you need a little help, NPA can be your guide with its growing list of business solutions, power events, and expert communications. We want you to know we are here to help. I’d like to thank everyone who has renewed their NPA membership. Your dues help fund our Dana Meinecke, legislative initiatives so we can continue to fight NPA Executive for our industry in Washington, DC. To see the Director parliamentary process first-hand, join us at NPA’s Legislative Conference on April 27 in our nation’s capital. One united voice is much louder than several single ones. See page 11 for more details on how you can participate. We appreciate the support you give to the association and realize you want to get the best return on your investment. We hope you take advantage of the numerous business solutions included with your membership. Contact SESCO Management Consultants to get a free employee manual evaluation, talk to Bob Frimet at RMF Consulting regarding the NPA discount for his AML compliance program, sign up for one of GIA’s classes using the 10% tuition discount, and much more.

NPA STAFF

Dana Meinecke Executive Director Dana@NationalPawnbrokers.org

Helen Moore Director of Membership Helen@NationalPawnbrokers.org

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

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

Marliss Allen Program Coordinator – Events and Communication Marliss@NationalPawnbrokers.org

Priscilla Fitz Executive and Membership Program Coordinator Priscilla@ NationalPawnbrokers.org

With over 75 Industry Partner members offering a plethora of products and services to help you in your business, we’re sure you’ll find just what you need. Many advertise in National Pawnbroker magazine and sponsor and exhibit at Pawn Expo. All of them are listed on the NPA website in the Member Services box. Just click on the Industry Market Place link within the box and take advantage of this ready-made list of suppliers to the pawn industry. When you invest in a child, you are investing in the future. Help a student with college tuition by nominating them for a Future Business Leaders scholarship. Qualifying students have the opportunity to earn $1000 with your nomination. But hurry – the deadline for applications is April 22. For more details, see page 54. Our other big event of the year is Pawn Expo. This year’s theme is “Driving Success” and we are on the road to making the 2016 convention and trade show the best one yet. We have more sessions, more CPP courses, and more ways to help you grow your business. See all the details beginning on page 34. Registration is now open and early birds will get a treat – a savings of $170 per person if you register by May 27. Sign up early – get the worm!

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MAILING ADDRESS: PO Box 508, Keller, TX 76244 PHYSICAL ADDRESS: 891 Keller Pkwy, Ste 220 Keller, TX 76248 Phone: (817) 337-8830 Fax: (817) 337-8875 NationalPawnbrokers.org

SPRING 2016

NATIONAL PAWNBROKERS ASSOCIATION

GOVERNMENT RELATIONS

2016’s Legislative Roadblocks WHAT YOU CAN DO TO HELP Edward Bean, NPA GRC Chair

I FIND THAT THE HOLIDAY SEASON IS ALL CONSUMING, especially for someone who runs

his own business. Now that the season is over, my thoughts turn to how I can do better in the next year. I start to think about where our industry is headed and what roadblocks we have to contend with. The first problem on my list is the proliferation of digital reporting throughout the country. The rules and regulations are different in every jurisdiction. Reporting of articles taken in pawn is not, in itself, a bad thing. There are many advantages to reporting to law enforcement: 1) It puts you in a better position dealing with stolen property since you are helping law enforcement do their job. 2) You actually have fewer inquiries by law enforcement. 3) You have less seizures of stolen property. The disadvantage is the reporting of personal information without proper warrants or subpoenas which violates your customer’s rights to privacy. We are currently involved in two court cases in Michigan and New York dealing with these issues.

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State and federal law protect the pawnbroker on this issue. The Government Relations Committee (GRC) will continue to help clarify this issue in the courts, so we can continue to be a valued partner of law enforcement. The next major issue we face as an industry is bank discontinuance. That’s when the bank you have been doing business with for over 20 years sends you a form letter stating you have to close all accounts in 30 days and be out of their bank. The GRC has met with all federal regulatory agencies on this issue. We have also met with a number of banks to truly understand what the motivation is for a bank to cease doing business with a profitable customer. We are currently working to provide our members with a form that will enable us to provide the type of information that the banks need to determine our compliance risk. We will be looking at establishing a national relationship with smaller banks that are more than happy to have our business. The third, and most pressing, issue is the Military Lending Act (MLA). The details of this federal law are addressed in a companion article on page 32. The basics are that pawnbrokers will be required

GOVERNMENT RELATIONS to check every customer to see if they are active military or a dependent of active military. If they prove to be either one, then the pawnbroker will not be able to charge more than 36 percent all in. This will drive some of our members out of business. Others will have their businesses slowed to a snail’s pace. We are currently working on solutions to comply with this issue. What can you do to help? You can attend the NPA Legislative Conference in Washington, DC, on April 27, 2016. During the conference, you’ll get a detailed briefing on the MLA and the other issues you will be discussing with your congressional members. A member of Congress will speak to us at the briefing and you will also be able to attend fundraisers with senior members of the financial services committee. It is imperative that we have as many people as possible attend the conference. The NPA offers a one-night complimentary hotel room at The Hamilton Crowne Plaza to the first five first-time attendees who register.

If you have never attended in the past, then prepare for an eye-opening experience you will never forget. If you have attended before, then your past experience is invaluable to the success of this conference. The MLA is the most serious issue we have dealt with in many years. We need your help bringing our solution to Congress. If you cannot attend the conference, consider donating to the NPA Political Action Committee (PAC). We use these funds to support those members of Congress who understand the need for our industry in people’s lives. We will be asking many of you to help with any relationship you may have with members of the Armed Services Committee. It is imperative that we get this regulation under control. There have already been state laws filed to back up the MLA with license suspensions. We need your time and your money to keep us all in business.

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NATIONAL PAWNBROKERS ASSOCIATION

PAWNBROKER SPOTLIGHT

Ted’s Pawn Shop A Family Affair

TED’S PAWN SHOP, a family owned and operated business since 1970, has been a member of NPA for the past 22 years. Raph Tincher, company president, reflects on his time at the store in Norwood, Ohio. NATIONAL PAWNBROKER (NP): How long has Ted’s Pawn Shop been in business? RAPH TINCHER (RT): We began as a corner grocery store in 1970 which evolved into a general store featuring not only produce and other grocery staples, but firearms and hardware. A precious metals dealer license was acquired in the late 1970s and a pawnbroker license in 1984. By the early 1990s, the pawn portion of the business eclipsed the grocery side. NP: How did you get started as an employee? RT: I started by sweeping sidewalks, floors,

and stocking shelves. My earliest memories of working are fourth grade (1984). My grandfather started the business, so my siblings and I worked weekends, summers, and school breaks. I finished college in 1997 and joined the staff in what I thought was a temporary position. NP: What makes your store different from other

pawn stores in the area?

RT: Our staff, combined with the scope and size

of our operation. My three brothers are employees and they have grown up working in the business. They have a stake in the business other than just

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a paycheck, and can do a better job at the pawn counter than your typical employee. We have 5,000 square feet of retail space, pawn storage of over 15,000 square feet, and a secure, alarmed parking lot that can store 60 vehicles. We can pawn a wider variety of merchandise, and larger quantities of it, than our competition. NP: How do you incorporate social media into

your marketing mix? RT: We utilize Facebook and Instagram. Luckily, I have younger siblings who are versed in those areas. Items, news, contests, promotions, and special sales are posted several times a week. Both are linked to our website as well. NP: What are some ways that you give back to

your community?

RT: I highly recommend being involved in your

community by supporting local charities, events, and groups. You can do good deeds through financial support and volunteer efforts, while increasing awareness and appreciation for your business. NP: In your opinion, what are the biggest

challenges facing pawnbrokers today?

RT: I think the primary issue facing pawnbrokers

is a combination of harmful regulations and overregulation. We are always going to be regulated and have statutes that govern us. I believe we must make sure that those allow us to run a profitable

PAWNBROKER SPOTLIGHT business. I sometimes wonder how much time must I spend filling out paperwork, complying with this rule, or that regulation, and when can I actually wait on a customer and try to make money? NP: What is the best career advice you have been

offered?

RT: This is not necessarily advice, but more of

a lesson about being a pawnbroker. I asked a pawnbroker I greatly respect, somewhat facetiously, if there was a right way, a wrong way, and then his way to do things as a pawnbroker. He said, “No, there is a right way, a wrong way, and your father’s way.” This same pawnbroker has always been extremely generous with his time and advice to any pawnbroker asking for help. All the while, he has never been haughty, claimed to have all the answers, or stated that his way is the end-all for how to be a successful pawnbroker. I try to mimic him in this way. NP: What is your favorite thing about being a

work with my dad full-time for over 17 years. That is time most people do not get to spend with their father, and I am extremely grateful for it. NP: Why are you a member of NPA? RT: You can blame the visible efforts of Ric Blum,

Craig Rabiner, and Lou Tansky on behalf of the Ohio Pawnbrokers Association (OPA) for that. I remember listening to them at OPA meetings, talking with them, and witnessing their efforts on behalf of other pawnbrokers. It made me want to be an active part of that organization and the NPA, and to further the cause of all pawnbrokers. We are an ancient, honorable, and much-needed profession. NP: Tell us one thing about yourself that would

surprise us.

RT: My wife bought me a Kindle because I had

stacks of books that were falling off my nightstand. I mostly enjoy reading fiction, historical, sci-fi, and fantasy. I am currently on my third Kindle, and the nightstand problem still exists.

pawnbroker?

RT: I am fortunate to work at a job where my wife

and children can visit at any time and I was able to

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April 27, 2016

2016 NPA Legislative Conference Hamilton Crowne Plaza, Washington, DC Plan to attend the annual NPA Legislative Conference in Washington, DC. Meet with your elected officials to advocate for the pawn industry. Appointments, talking points, and support materials will be provided. For more information and to register, visit NationalPawnbrokers.org/ legislative-conference.

EVENT

Once A-Pawn a Time in Washington NPA’s annual Legislative Conference is coming up April 27, 2016. It’s important that all pawnbrokers consider making this one of their top industry events of the year. The larger the group visiting Capitol Hill, the greater the impact the industry will have. Together, we can educate members of Congress on the pawn industry’s top priorities.

5 REASONS WHY YOU SHOULD ATTEND:

you and your business are affected by current and proposed bills.

1. Gain knowledge on how the

5. Network with NPA Board

legislative process works and how your participation can make an impact. 2. Learn the issues facing the pawn industry and what you need to do to stay compliant.

members and other pawnbrokers who can provide a wealth of information, experiences, and resources to help you grow and develop your business. Members often say their trek to Capitol Hill is one the highlights of the year. Don’t miss out on this once-a-year experience. Visit NationalPawnbrokers.org/ legislative-conference for more information.

3. Build support for NPA-backed

legislation, especially the new Military Lending Act regulations regarding the Military Annual Percentage Rate cap. 4. Meet your elected officials and get

to know them. Let them know how

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NATIONAL PAWNBROKERS ASSOCIATION

YOUNG PAWNBROKER TO WATCH

Randi Nell

SETTING HIGH GOALS FOR BIG DOG PAWN

“I think that learning to have positive relationships with other pawnbrokers helps you to set higher goals for yourself.”

LIKE MANY OTHERS, Randi Nell is a “daughter” of pawn. Her parents, Scott and Pat Nell, started Big Dog Pawn in West Jordan, Utah, when she was 12 years old. As a teenager, she worked in the store part-time, but swore she would never work there when she grew up. However, after graduating from college in 2009, she went back home to work in the store until she could find something different. She soon came to enjoy the industry and has been working as a pawnbroker for the last seven years. “I couldn’t imagine doing anything else,” said Randi, manager of Big Dog Pawn’s West Jordan location. Since she started working at the pawnshop, the hours of operation have expanded to twelve

hours a day, seven days a week. According to Randi, “It was a hard change and a lot of hours had to be put in to make it successful, but overall it has been extremely beneficial in growing our business.” Along with making the change of hours, Randi helps manage their online eBay store. She also helped set up the store’s first franchise. A family wanted to open a pawn shop, but Big Dog Pawn did not want to get into a partnership. Instead, they created a franchise. The new store shares the same name, Big Dog Pawn, and the new staff was trained on all of the aspects of running a store. In her seven years as a pawnbroker, Randi has (Continued on page 30)

NATIONAL PAWNBROKERS ASSOCIATION

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THE TRENDZ

TURN YOUR DIAMONDS INTO CASH

WE BUY DIAMONDS MELEES, LARGE STONES, BROKEN, CHIPPED, EVEN BURNT, as well as UNWANTED JEWELRY

550 South Hill St., #1340, Los Angeles, CA 90013 Toll-free: 866.337.7464 | Cell: 213.999.0237 | Fax: 213.622.6612

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NATIONAL PAWNBROKERS ASSOCIATION

BUSINESS SENSE

Marijuana in the Workplace CLEARING THE SMOKE

WITH MANY CHANGES TO STATE LAWS NOW PERMITTING recreational and medical marijuana use, employers are understandably confused. Twenty-three states and the District of Columbia have decriminalized the use of medical marijuana. Additionally, five states and the District of Columbia have legalized the sale and distribution of recreational marijuana for adults. Importantly, however, marijuana is still illegal under federal law. MEDICAL MARIJUANA

In addition to the District of Columbia, the following states have decriminalized the use of medical marijuana: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington. These laws vary greatly in their criteria and implementation. It is important to note that the legislation passed in the District of Columbia, Alaska, California, Colo-

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rado, Hawaii, Maryland, Massachusetts, Michigan, Montana, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and Washington have only decriminalized the use of medical marijuana. These statesâ&#x20AC;&#x2122; laws do not affect how employers choose to handle the use of medical marijuana in hiring, employee discipline, and employee termination. So far, courts have not supported the discrimination claims of medical marijuana users. For example, the Colorado Supreme Court recently upheld the termination of an employee who was fired for failing a random drug test despite having a medical marijuana license. The court found in favor of the employer based on the fact that federal law still classifies marijuana as an illegal, controlled substance. Employers in Arizona, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, and New York have to be more careful. These states require employers to provide employees with accommodations for registered medical marijuana users. Additionally, in these states, an employer cannot take an adverse action against an employee simply because of his or her

BUSINESS SENSE

participation in a recognized medical marijuana program. Once an employer is provided notification that an employee is a medical marijuana user, that employer needs to be especially careful how it uses that information and how far it goes in asking for more. This is because the employer now is likely on notice that the employee is potentially disabled under the Americans with Disabilities Act as Amended (ADAAA) or similar state statutes and/or has a serious health condition under the Family and Medical Leave Act (FMLA). While the ADAAA itself does not require an accommodation based on marijuana use, it does require other accommodations related to a covered disability (for example, glaucoma), and affords certain protections to employees and applicants with disabilities. RECREATIONAL MARIJUANA

In addition to the District of Columbia, Alaska, Colorado, Delaware, Oregon, and Washington have legalized marijuana for recreational use. Fortunately for employers in Alaska, Colorado, and the District of Columbia, the laws in those states provide express protections, indicating that employers are not required to permit or accommodate the use, sale, possession, transfer or the like of marijuana in the workplace. The laws in Oregon and Washington, however, are silent as to the impact of recreational marijuana in the workplace. Nonetheless, as long as an employer has a clearly communicated and enforced policy prohibiting the use and possession of marijuana and other controlled substances, that employer can legally terminate an employee for his or her use of recreational marijuana because use is still illegal under federal law. While the use of recreational marijuana and its impact on the workplace is still relatively new legal territory, those courts that have addressed such circumstances have thus far upheld employer termination decisions.

WHAT WE KNOW While there are bound to be future developments in how employers can lawfully address marijuana use by employees, we do know the following: 1. All employers can and should test employees who appear to be under the influence of drugs or alcohol or if a workplace accident occurs. 2. All employers may discipline and terminate employees based on a positive marijuana test when the employee is not a registered medical marijuana user. 3. When an employee tests positive for marijuana and the employee is a registered medical marijuana user, the employer should seek assistance before taking action. 4. State laws that disqualify worker’s compensation benefits to claimants that test positive for controlled substances like marijuana should continue to be enforceable. 5. It is vital that employers have a clearly communicated and enforced policy regarding the use of marijuana.

SESCO Management Consultants is retained by the National Pawnbrokers Association to provide results-oriented human resource consulting services to members. The service provides for a free “hotline” to discuss day-to-day employment issues such as policy development, employee challenges such as disciplinary, terminations, or workers’ compensation, compensation, compliance with federal and state employment regulations, family and team challenges, and many other management and human resource matters. For more information, call (423) 764-4127.

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NATIONAL PAWNBROKERS ASSOCIATION

INDUSTRY PARTNER SPOTLIGHT

Wexler Insurance Agency, Inc. COVERAGE YOU CAN COUNT ON

Gary Wasserman, Vice President, Wexler Insurance Agency, Inc.

WEXLER INSURANCE AGENCY joined NPA

in 1995 making it one of the oldest Industry Partner members of the association. With 68 employees, they have fully-staffed offices in Coral Gables, FL; New York, NY; Cincinnati, OH; and Corona Del Mar, CA. We asked Vice President Gary Wasserman, about the changing face of the insurance industry. NATIONAL PAWNBROKER (NP): Tell us about

Wexler Insurance Agency.

GARY WASSERMAN (GW):

Wexler Insurance Agency was founded in 1968 and specializes in providing comprehensive insurance solutions for jewelers, pawnbrokers, check cashers, and fine art dealers. The very first account written by Wexler Insurance Agency was a pawnbroker in Miami, FL. Our Pawnbroker Package Policy is widely recognized as the broadest and most comprehensive form of its kind, and provides “all risk” coverage including theft for pawned and owned jewelry, guns and other merchandise, kidnap & ransom coverage, employment practices liability, cyber liability, and free shipping coverage. Wexler provides insurance to more jewelers and pawnbrokers than any other independent firm in the world.

NP: Tell us more about you. GW: I am a graduate of the University of Florida

and went to Cooley Law School in East Lansing, MI. I am a Lloyd’s Coverholder meaning I am responsible for the underwriting, policy issuance, and administration of the program. I also authored our Pawnbroker Package Policy, Check Casher Package Policy, Fine Art Package Policy, and Jewelers Block Package Policy. I began my insurance career with Wexler in October, 1991, and wear multiple hats. I am a 50 percent partner in the firm and serve as the coverholder on all our programs which requires me to manage all of the binding authorities that we have. I also produce business, service accounts, and manage the business with my partner and staff. NP: What new trends are you seeing in the in-

surance industry? GW: There has been a tremendous amount of consolidation in the trade. Recently, Chubb was acquired by ACE, and XL and Catlin have merged. I think you may see several smaller-size carriers disappear in the near future as they won’t be able to bolster their bottom lines in today’s competitive insurance marketplace. (Continued on page 19)

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MEMBERSHIP

Stand Up and Be Recognized! NPA’S ANNUAL AWARDS “I guess we all like to be recognized not for one piece of fireworks, but for the ledger of our daily work.” –Neil Armstrong

Awards ceremonies are common in most industries to give recognition to individuals or groups who have shown their hard work and dedication in their trade. For example, the music industry has the Grammy’s and for the film industry, the Oscar’s. These awards are important to recognize not only the success of the individuals or group, but the hard day-to-day work that has led them to that success. THE MOST IMPORTANT NPA AWARDS ARE GIVEN AT PAWN EXPO. THEY INCLUDE: PAWNBROKER OF THE YEAR AWARD

Presented annually to an individual who, through his/her performance, has demonstrated exceptional success in their business and local community and has made a significant contribution to the pawn industry during the previous year. INDUSTRY PARTNER OF THE YEAR AWARD

Presented annually to the NPA Industry Partner member who, through their performance and dedication, has shown significant support of the association and its members. OUTSTANDING COMMUNITY RELATIONS AWARD

Presented annually to an NPA Pawnbroker or Affiliate member company whose public service and/ or voluntarism efforts advance the standard and quality of life in their community. YOUNG PROFESSIONAL OF THE YEAR AWARD

Presented annually to an individual 40 years of age or younger who, through his/her performance, has

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demonstrated exceptional success in their business and local community and has made a significant contribution to the pawn industry during the previous year. OUTSTANDING PAWN INDUSTRY IMAGE AWARD

Presented annually to an NPA Pawnbroker or Affiliate member company who creatively generates positive awareness of the pawn industry through a print or digital marketing campaign. Media includes, but is not limited to: television, radio, social media, print campaign, and email campaign. CHARLES R. JONES LIFETIME ACHIEVEMENT AWARD

Recognizes a pawnbroker who, through his/ her outstanding leadership and efforts, has gone above and beyond and made a significant and lasting impact on the pawn industry over the course of their pawnbroking career. They are regarded by their peers as leaders in the industry and recognized as such nationally. This is this highest honor awarded by NPA and is awarded only to individuals who have demonstrated a lifetime commitment to the association and to the success of the pawn industry. Nomination forms and a list of past award winners can be found at NationalPawnbrokers.org under the Membership tab/NPA Annual Awards.

INDUSTRY PARTNER SPOTLIGHT (continued from page 16)

NP: Which of your products or services are

the most useful to our pawnbroker members? GW: Our Pawnbroker Package Policy is extremely comprehensive, and when you read the fine print, the policy language really benefits the insured. Many policies have restrictive language, such as, if you don’t fully complete your pawn tickets, the carrier only has to pay you for the amount loaned plus legally accrued interest. Some policies have coinsurance in respect of your pawned and owned goods which will penalize you in the event that you are underinsured. Others have protective safeguard clauses that state that all of your security must be in working order and on, or coverage is suspended. That sounds reasonable, but what if you don’t know that your alarm is malfunctioning? Policies are contracts and the contract speaks for itself. I have done my utmost to remove such restrictive language from our policy. In addition, we include Kidnap & Ransom at the same limits as the Pawned & Owned Jewelry & Guns and cash, Employment Practices Liability to protect owners from lawsuits brought by their employees for various employment related issues, and Cyber Liability which provides protection from privacy breaches and defense of Red Flags Rule violations. When you purchase our Pawnbroker Package Policy along with our exclusive Workers Compensation Policy, you will truly have a comprehensive and affordable insurance plan. NP: How do you differentiate your company

from others?

GW: We honestly believe that we are the best at

what we do. We are constantly improving our policies to fit with the times. For example, Tiger kidnappings (extortion types of thefts) were becoming a major issue in Europe, so we added full Kidnap & Ransom coverage to our policies. The U.S. Government made pawnbrokers

subject to the Red Flags Rules, so we added Cyber Liability to our policies. In addition, we feel our claims service is second to none. The reason you buy insurance is to be covered in the event of a loss. Not all losses are covered, so the policy language and experience of your broker are critical. NP: How do you give back to your

community?

GW: Wexler Insurance Agency, Inc. is a proud

supporter of the Sunny Shores Sea Camp. This organization provides kids with cystic fibrosis a fully paid-for camp experience which, in addition to a good time, helps the kids and their families gain tools and information to lead more active lives. NP: Why are you a member of NPA? GW: We have been members of the NPA for

many years. In fact, we were the first Diamond Sponsor of the NPA’s Pawn Expo. We feel it is important to support the NPA as they support the entire industry. The NPA’s lobbying efforts keep the government from regulating the trade out of business. I believe the NPA has done a tremendous job of educating legislators and the public of the true value the pawnbroking trade brings to the local community which, in turn, has had a positive effect in removing any negative stereotype. NP: What is the best way for our members to contact you or learn more about your company? GW: They can visit our website at wexlerinsurance.com. They can also contact me via email at gwasserman@wexlerinsurance.com or call me at (800) 432-1853.

SPRING 2016

NATIONAL PAWNBROKERS ASSOCIATION

BUSINESS SENSE

Annual Operational Risk Assessment for Pawn Store Owners by Doug Davis, Numismatic Crime Information Center

The following areas should be thoroughly reviewed to help the pawnbroker identify, analyze, and contemplate all the high potential risks, threats, and hazards that currently exist in his/her business’s internal and external environment.

☐☐ Credit Card Policy and Required Identification ☐☐ Cashier Check Policy and Verification of Funds Availability/Requirements

☐☐ Opening and Closing Procedures

☐☐ On-Premise Weapon Policy and Procedures (training/proficiency records)

☐☐ Retention Schedule for CCTV Recordings (minimum 90 days) ☐☐ Locks and Safes (maintenance schedules) ☐☐ Key and Combination Control ☐☐ Cash Handling/After Hour Deposit Procedures ☐☐ Employee Training in Identifying Suspicious Activity, Phone Calls, and Persons (procedures for documenting activity) ☐☐ Robbery Procedures (review the “do’s and don’ts” with employees) ☐☐ Crime Scene Protection (after robbery) ☐☐ Inventory Control ☐☐ Records and Technology Protection ☐☐ Computer Backup Schedule ☐☐ Customer List Protection ☐☐ Customer Data Protection ☐☐ Proper Packaging/Shipping Procedures (USPS, FedEx, UPS, etc.)

☐☐ Check Policy and Required Identification

BUSINESS RISK ASSESSMENT

☐☐ Alarm & CCTV (maintenance schedules/ periodic testing)

☐☐ Follow-up Shipping Procedures (to insure delivery)

NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

☐☐ Hiring Procedures (application) ☐☐ Employee Background Check ☐☐ 911 Policy and Procedures ☐☐ Response Times of Local Police and Fire Departments ☐☐ Maintain Current Local and State Licenses (check renewal dates for Pawn License, Precious Metals Dealer License, Scale Licensing, Local Precious Metals Registration) Although a risk assessment is time consuming and tedious, it is necessary to identify threats and vulnerabilities related to the operation of a store. Once an assessment has been conducted, it allows the store owner to formulate and put into place controls that reduce risks and the potential for loss. 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. Numismaticcrimes.org, P.O. Box 14080, Arlington, Texas 76094

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NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

BEHIND THE SCENES

Lindsay Wilson NPA’S DIRECTOR OF MEETINGS AND EVENTS

IF YOU’VE BEEN TO PAWN EXPO within the past four years, you’ve probably seen Lindsay Wilson darting around the hallways and ballrooms with a walkie-talkie in one hand and a clipboard in the other. She’s the driving force behind Pawn Expo, NPA’s very successful convention and trade show. As the Director of Meetings and Events, Lindsay plans all the NPA events including the annual Legislative Conference, the fall Board meeting, and, of course, Pawn Expo. She also manages NPA’s new Certified Pawn Professional (CPP) designation program. A lot of what Lindsay does is behind the scenes – developing strategies, ironing out meeting logistics, recruiting exhibitors and sponsors, and creating educational and marketing content. She also spends time responding to member inquiries via phone and email while trying to keep up-to-date on pawn and meetings industry news. Lindsay, a native of Fort Worth, TX, received her Bachelor of Business Administration degree from the University of Texas at Arlington – a feat she accomplished in just under three years. After working in both the association and the supplier side of the business, she arrived at NPA in January 2012. Although she didn’t have any pawn industry

experience, she was able to utilize her background and work experience to enhance and improve each event she has managed for the organization. Knowing the work she does makes a difference in the members’ businesses is the best thing about working at NPA, Lindsay says. “Being part of a small association really allows me to take part in many projects, and knowing that programs like Pawn Expo and CPP directly impact our members’ ability to improve their business, is a good feeling.” Her biggest challenge is making sure that the programs she is responsible for are relevant and impactful to NPA members. In her free time, Lindsay enjoys baking, volunteering, and traveling. This past September, she married the love of her life, Jay Krivanek. They enjoy traveling and embarking on new adventures every chance they get and have been to Peru, Czech Republic, Poland, Hungary, Slovenia, China, Italy, Mexico, Japan, Germany, Luxembourg, and France. While at home, they spoil their two pets – Frida (the cat) and Duke (a German Shepherd) – who bring them hours of entertainment.

SPRING 2016

NATIONAL PAWNBROKERS ASSOCIATION

COMPLIANCE

Compliance: Fact vs. Fiction

IT’S BEEN JUST OVER A DECADE since I got involved with the NPA in assisting its membership with Title 31 Patriot Act compliance as well as Title 26 Trade or Business (pawn) compliance. Oh, what a decade it’s been!

Bob Frimet CAMS, RMF consulting

became intertwined with Title 31 of the U.S. Patriot Act and, as a precious metals buyer, most became subject to not only the regulations, but also the penalties.

Now, fast forward to 2016 when many pawnbrokers have now become proactive. The I remember my first visit to the NPA convention NPA offers compliance solutions through third with a colleague of mine who was actually the one parties that asked to get help pawn involved with store owners the association. and dealers in I will never precious metals forget his make sure they words, “There are following is nothing here all the rules for us to do and regulations (complianceto the best of related) for this their abilities. group. I will But even after take a pass.” all these years, From that Source: International Money Transfer Conferences, imtconferences.com moment on I knew, from a compliance perspective, there are still many who are not familiar with, or don’t want to know, the rules. there was no active party representing the pawn industry, and I felt obliged to take it on. In my last article, I discussed a fictitious character who didn’t follow the rules and was fined Back in 2005, few knew what an 8300 form was, $175,000. Lo and behold, at the end of December and even fewer knew when and how to fill it out. 2015, the Financial Crimes Enforcement Network Then, in 2006, a new set of rules was enacted (FinCen) levied a $200,000 fine to a precious for “Dealers in Precious Metals”. Later, this rule

NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

COMPLIANCE

metals dealer in California for violating the Bank Secrecy Act, its largest fine in the industry to my knowledge. But, what is the takeaway? One can say “That doesn’t apply to me. I don’t deal in those volumes, so no one will come see me”, or “It can never happen to me.” Or one can say, “Wow! Someone got fined. I better be sure I am following the rules.” We see a fatal car crash on the highway. Do we put on our seat belts or say, “Poor soul, what a terrible accident,” and keep on driving on down the road? I hope the takeaway is to be safe when it comes to following regulations. I recently came up with the PB&J concept that, if one follows, they will avoid not only costly fines, but do their duty and keep one’s bank happy.

So, ten years later, what are facts and what is fiction when it comes to compliance?

P - It is your patriotic duty to prevent money laundering which can lead to a wide variety of crimes from terrorist financing to drug sales to human smuggling. B - Bank closures for all money-related businesses are on the rise. Banks are significantly more proactive than they were a decade ago relative to banking your business and the requirements/due diligence. So, one must have their compliance in order. J - Don’t follow the rules and justice may be served cold with a side of heartburn. All pawn stores are required to file 8300s if applicable. All dealers in precious metals are also required to file 8300s if applicable as well as Suspicious Activity Reports (SARs), maintain a written anti-money laundering program, and follow the 4 pillars on page 24.

requirements of the bank secrecy act by having the business not file a specific form, such as an 8300. FACT: You must notify your customers in writing

FACT: An 8300 form is required for all trade and

business that accepts cash “in” for all transactions in excess of $10,000. FICTION: As a dealer in precious metals or

a pawnbroker, a business can file a Currency Transaction Report (CTR) in lieu of 8300.

FICTION: The business never conducts transactions over $10,000 and, therefore, doesn’t have any other obligations when buying scrap metal. FACT: KYC means “know your customer” which is a

required element in one’s AML program.

FACT: CIP means “customer identification program” which is a required element in one’s AML program. FICTION: A “related transaction” takes place in a 24-hour period or calendar year. FACT: A “related transaction” takes place in a 24-

hour period or “rolling” calendar year.

FACT: You have 15 days to file an 8300 from the date of the triggering event.

by January 31 of the next year for all 8300s you filed the previous year.

FACT: A Dealer in Precious Metals must document

internal monitoring and training.

FICTION: If a company rewrites a ticket on an item that remains in pawn, the item would not be related. FICTION: You should notify your customer if you’re

filing a suspicious 8300 on them or a SAR.

FACT: SAR’s should be filed when suspicious

activity occurs on dealers in precious metals’ transactions and within 30 days of the date of detection of the suspicious activity.

FICTION: Debit cards, wire transfers, and personal check transactions require an 8300 filing if over $10,000. FACT: Cashier’s checks, bank drafts, travelers

checks, and money orders under $10,000, but when combined with cash that is over $10,000, require the filing of an 8300.

FACT: Pawn stores must implement Office of

FICTION: Regular customers are not capable of

Foreign Asset Control (OFAC) policies and procedures.

FACT: Structuring is attempting to evade the

FICTION: If I stick my head in the sand and don’t follow the rules, they won’t find out.

committing financial crimes.

(Continued on page 50)

SPRING 2016

NATIONAL PAWNBROKERS ASSOCIATION

BUSINESS SENSE

Rapaport Diamond Insights DIAMOND MARKET ENDURES CHALLENGING 2015 By The Rapaport Group

DIAMOND SECTOR PROFITABILITY CAME UNDER THE SPOTLIGHT IN 2015 due to sluggish consumer demand in emerging markets and high rough prices relative to the resulting polished. Consequently, the year was a forgettable one for the trade characterized by excess supply and consolidation. Polished prices fell as manufacturers held large quantities of diamonds that were difficult to sell. Inventory levels peaked mid-year as dealers held large quantities of diamonds that were predominantly ordered in 2014 to satisfy Chinese demand. However, as China’s economic growth slowed in 2015, so did diamond demand, leaving suppliers with too many diamonds and too few buyers.

unprofitable rough – especially in the second half of the year. Polished production dropped by an estimated 30 to 50 percent throughout 2015 as diamond suppliers sought to reduce inventory. By year-end, polished shortages emerged which supported prices during the holiday season, especially for better quality diamonds. The RapNet Diamond Index (RAPI™) stabilized in the fourth quarter but slumped for the full year, extending the downtrend that has been evident since mid-2011. The RAPI for 1-carat GIA-graded diamonds fell 5.8 percent in 2015. RAPI for 0.30-carat diamonds dropped 13.4 percent, while RAPI for 0.50-carat diamonds fell 14.5 percent. RAPI for 3-carat diamonds slid 14.5 percent during the year (see chart A).

Diamond cutters responded by reducing manufacturing and refusing to buy

CHART A

NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

BUSINESS SENSE

CHART B

SPECIFIC DEMAND

While shortages helped stabilize the market in the fourth quarter, caution lingered as jewelry sales stagnated in key emerging markets throughout 2015. Jewelry sales in China and Hong Kong plunged during the year as economic growth slowed and the governmentâ&#x20AC;&#x2122;s anti-corruption campaign curbed luxury purchases. Jewelers in the region had been aggressive diamond buyers in 2014 and consequently had enough goods to satisfy lower demand in 2015. They also reduced their buying as they cut back their store expansion programs. Meanwhile, wealth was impacted as Chinaâ&#x20AC;&#x2122;s stock market tumbled in June and the yuan currency devalued against the U.S. dollar. The strong dollar and the slump in oil prices impacted consumption in Russia and the Middle East while consumer sentiment in India

remained weak. Therefore, diamantaires once again looked to the U.S. for support. Overall, the U.S. retail market strengthened during the year although jewelers continued to carefully manage their inventory levels. Diamond buying remained specific and selective with very few orders to build up inventory and diamond market liquidity remained tight. MELEE PRICES SOFTEN

The pawn sector specializing in diamonds and jewelry was not immune to the tough market conditions and also experienced a challenging 2015. The sector was hit with the double-whammy of lower supply and declining diamond and gold prices. Fewer consumers were looking to sell their jewelry to pawnbrokers as gold prices sunk 18 percent from their peak in January to the end of the year. In addition, diamond dealers were faced with lower liquidity and reduced demand

(Continued on page 60)

SPRING 2016

NATIONAL PAWNBROKERS ASSOCIATION

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NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

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NATIONAL PAWNBROKERS ASSOCIATION

YOUNG PAWNBROKER TO WATCH

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(continued from page 12)

USA RELIABILITY

accomplished many things, but she feels that her biggest achievement to date is getting involved in the NPA. “We have learned so much valuable information from Pawn Expo, pawn magazines, and other pawnbrokers as well,” said Randi. “I think that learning to have positive relationships with other pawnbrokers helps you to set higher goals for yourself.”

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NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

Randi compares her experience as a waitress in college to her career as a pawnbroker. “It can be hard to work at a place with a lot of different personalities. But if you can learn to get along with co-workers and be happy with the people around you, customers can feel the energy when they come into the store.” She believes that if everyone is happy and having a good time at work, it will be a place that customers are more likely to revisit. One piece of advice that Randi would give to other young pawnbrokers in the industry is, “Don’t be afraid to suggest new ideas.” It’s hard to come into an already-successful store and suggest new ideas, but according to Randi, “Sometimes a new perspective and fresh ideas is just what a company needs.” Randi graduated in 2009 with a bachelor’s degree in Human Resources and is currently studying to get her Graduate Gemologist certification from Gemological Institute of America (GIA).

SOCIAL MEDIA

Tweet, Post, Pin, Blog, Share, and Chat THE IMPORTANCE OF SOCIAL MEDIA FOR YOUR PAWN BUSINESS By Lauren Kaminsky Goldman

Building a social media presence can be a daunting undertaking for any business owner, but most businesses have determined that it is still worthwhile given all the benefits. On the other hand, many pawnbrokers have remained skeptical of joining the social media community.

CONSIDER YOUR RESPONSE.

Why are so many of us afraid to share our stories and shed light on what we do on a daily basis? I’ve heard the gamut of responses from, “It's too time-consuming” to “People don’t like pawnbrokers and will make negative comments on my Facebook page that I don’t need to see.” However, as the current saying goes, if it is not on social media, then it didn’t happen. The same rule should apply to your business. No social media, and your business is dead to me. Just kidding, but seriously it’s time to get a move on!

GIVE SOMETHING AWAY.

HERE ARE A FEW TIPS AND TRICKS YOU SHOULD TAKE TO HEART WHEN CONSIDERING YOUR NEXT TWEET OR POST: KEEP IT SEPARATE.

Many of us think we are our business and vice versa. When it comes to social media, the two should be separate. Customers don’t need to see the pictures you are tagged in from that crazy weekend in Vegas and your daughter doesn’t want to see a diamond necklace that you already told her she can't have. The two entities require two different target audiences. CONSISTENCY IS KEY.

Know your voice and your audience, and then roll with it. Don’t contradict yourself in your posts because what you say will live on the web indefinitely.

If a question is being asked in the comment section that you believe will help the greater good, you should and can publicly respond to it. However, negativity should be ignored or answered privately through direct messages. A great way to gain more followers and traction is to run promotions. Encourage others to tag your page so their followers can see it and then, hopefully, share it as well. USE HASHTAGS THE RIGHT WAY.

Hashtags are a way to categorize your posts and make them searchable for the public. Hashtags make sense, but often are used incorrectly. #pawn is a real hashtag. #idontknowwhatimdoing is not, unless you want to file a few images under that category. We’ve got an incredible and powerful community of pawnbrokers through the NPA. As a result, we should have a great social media presence so we can begin showing the world, through pictures, that we exist beyond what you see on TV and in the movies. We are real people. I am starting this now via #ProudofPawn. Tag your pictures and let's get this going. I want to see you all in the world of social media. Lauren Kaminsky Goldman is president of New York City multi-store operation E Z Pawn Corp. She is a third generation pawnbroker, and works closely with her father, David, and her brother, Jason, to run their 14 stores. Lauren graduated from Boston University’s School of Management where she earned her Bachelor of Science degree in Business Administration and Entrepreneurship. She is also partners in the pawnshop-concept storefront at Beauty & Essex. Lauren is a graduate of GIA’s Diamond Essentials course.

SPRING 2016

NATIONAL PAWNBROKERS ASSOCIATION

GOVERNMENT RELATIONS

Winning the MLA Game WHAT YOU NEED TO KNOW TO STAY IN COMPLIANCE By Fran Bishop, NPA Government Relations Liaison, NPA Past President

ON JULY 21, 2015, the Department of Defense

(DoD) expanded the coverage of the regulations for the Military Lending Act (MLA). The new regulation becomes effective for pawn transactions and others on October 3, 2016. It limits all interest and other charges for credit to 36 percent Military Annual Percentage Rate (MAPR) with “covered borrowers,” defined as an active duty member of the armed services or active duty Guard or Reserve forces, spouse, and other certain dependents. It also requires new disclosures and imposes serious penalties for failure to comply. Your NPA Government Relations Committee has worked tirelessly to show the DoD why our traditional, nonrecourse pawn transactions should not be included under their broad definition of “consumer credit”, and instead, maintain our pawnbrokers’ exemption from the original 2007 MLA rule. We thank every NPA member who sent comments to the DoD on the proposed regulation and those of you who helped with our efforts in Congress before it was finalized. But, the NPA is not taking the ball and going home. We are staying in the game and need all of you, our players, on this team. The new MLA regulations do provide a safe harbor from liability for violations if the creditor can establish that the consumer is not in activeduty military service or a dependent; however, this requires obtaining their Social Security Number (SSN) - information most have long since stopped

NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

acquiring in the normal course of business. You then must access the Defense Manpower Data Center (DMDC) online and enter your customer’s name, date of birth, and SSN to receive a “verified certificate” of their military status, which you must retain in your records. This status verification will have to be performed on ALL of your customers each and every time they step up to the pawn counter for a loan! We are talking about an expensive and time-consuming process that could potentially bring your transaction times for making loans down to a snail’s pace. Not to mention that employees will have to be retrained to obtain the customer’s SSN, pawn software fields reprogrammed to not allow the transaction to go forward until the status check is performed, and a certificate ID entered. The data security measures you currently have in place will need to be enhanced to ensure the safety of this additional customer information, regardless of whether it is stored by electronic means or hard copies. If the DMDC report returns an active-duty military or dependent status, then the 36 percent MAPR, including any and all other fees and charges, applies to the pawn transaction. You must disclose this rate prior to or when the covered borrower enters into the transaction, which is in addition to Truth in Lending (TILA) disclosures you are currently required to make.

GOVERNMENT RELATIONS

If you fail to comply with these expanded MLA regulations, the contract (pawn ticket) will be voided. Also you, the pawnbroker creditor, are subject to civil liability by the affected customer, including actual damages of not less than $500 per violation, as well as punitive damages and/or other relief. Now, if you are thinking, “There isn’t a military base within 200 miles of my store, so this doesn’t apply to me,” you are wrong. Active duty military personnel come home on leave or visit relatives. Their spouse or other dependents may live two blocks from your store. National Guard and Reservists who reside in your town get called to active-duty and their families remain there. All of these individuals are, or will be, covered borrowers. If you don’t go through the steps listed above with each and every customer that comes to your pawn counter, then there is no safe harbor for you.

As I said earlier, we are still trying to secure a meeting with the DoD to explain the difference between other types of consumer credit and non-recourse, traditional pawn transactions that are based on the value of the personal property collateral with no demand for repayment, instead of a credit check that requires the customer’s SSN. We are asking members of Congress who serve on the House and Senate Armed Services Committees for their assistance in getting the DoD’s attention. Before you read this, we may have already contacted you to enlist your grassroots assistance with your Senator or Representative. This takes a team effort by all players and that’s why we are still working to stay in the game, turn the score around, and bring home a win. Lace up those sneakers and get your game face on!

SPRING 2016

NATIONAL PAWNBROKERS ASSOCIATION

DRIVING JULY 12-14, 2016

THE MIRAGE â&#x20AC;˘ LAS VEGAS What is Pawn Expo? Pawn Expo is the only national convention and trade show for the pawn industry. Attendees learn new ways to strengthen their businesses, connect with fellow pawnbrokers, and do business at the trade show featuring over 120 different companies. Leave energized and equipped with the latest industry knowledge.

SAVE $170

by May 27 with early bird rates PAWNEXPO.COM

WHY SHOULD I ATTEND?

expert speakers

500+

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120

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Questions? PawnExpo.com

education sessions

170

dollars in savings when you register by May 27

canâ&#x20AC;&#x2122;t-miss convention for the pawn industry

SUCCESS PAWN EXPO HIGHLIGHTS Trade Show

Networking Reception

Pawnbroker Peer Roundtables

Ask the Expert Sessions

Welcome Reception

Annual Membership Meeting

Opening Session Keynote

Closing Reception

Awards Luncheon

NPA PAC Event

WHATâ&#x20AC;&#x2122;S NEW IN 2016? Two New CPP Courses Keynote Speaker Derek Daly, International Race Car Driver Crucial Conversations and Crucial Accountability Sessions The Marketplace (formerly the Diamond District) New Product Knowledge Topics Questions? PawnExpo.com

MONDAY | JULY 11 CERTIFIED PAWN PROFESSIONAL COURSES

Earn Your Designation

Monday, July 11, 8:30 am – 4:30 pm

The Certified Pawn Professional (CPP) designation program was launched in 2015 and now has almost 75 candidates pursuing their CPP certification. The designation will elevate professional standards and be the recognized mark of distinction among those in the pawn business. All courses will be offered at Pawn Expo 2016. Additional registration required. Security, Risk, and Crisis Management – new course

MONDAY SCHEDULE

Product Knowledge – new course

8:30 am – 4:30 pm CPP Courses – Additional Registration Required

Store Operations

Federal Regulations Human Resources Marketing, Advertising, and Public Relations

6:00 pm – 7:30 pm Networking Reception

TUESDAY SCHEDULE 8:00 am – 9:00 am Annual Membership Meeting and Breakfast 9:15 am – 10:30 am Opening Session 9:30 am – 5:30 pm The Marketplace 10:45 am – 12:00 pm Education Sessions 12:15 pm – 1:45 pm Awards Luncheon

TUESDAY | JULY 12 Military Lending Act

OPENING SESSION: Keynote Speaker Derek Daly

2:00 pm – 4:15 pm Education Sessions 6:30 pm – 8:30 pm Welcome Reception

Complete Champion Culture: Driving to the Limits of Possibility

UNDERSTANDING THE MILITARY LENDING ACT’S EXPANDED REGULATIONS

This session explores the leap from good to great and from great to extraordinary. You will savor how people can be pushed to the edges and boundaries of what might be possible. You will understand where the Culture of Extraordinary lives. You will learn how to achieve your personal best and how to sustain levels of performance that competitors are unable to match. Derek uses powerful, real-life sports analogies in a unique, compelling, and often hilarious, manner that leaves audiences in awe.

Tuesday, July 12, 10:45 am – 12:00 pm

Tuesday, July 12 , 9:15 am – 10:30 am

Questions? PawnExpo.com

Edward Bean, NPA Government Relations Chair, and Fran Bishop, NPA Government Relations Liaison

Learn what the Defense Department’s expanded Military Lending Act regulations will require of ALL pawnbrokers and their customers from the NPA’s Government Relations Team. In addition to limiting all interest, including any other charges, for credit to a 36% Military Annual Percentage Rate for “covered borrowers”, this regulatory action will alter the way you conduct pawn transactions with all customers from the moment they approach your counter. The effective date of these regulations is October 3, 2016, so this is a must-attend session for you and your business.

Crucial Conversations

Crucial Accountability

CRUCIAL CONVERSATIONS: TOOLS FOR TALKING WHEN STAKES ARE HIGH Justin Hale, VitalSmarts

Tuesday, July 12, 2:00 pm – 3:00 pm When the stakes are high and opinions differ, some people force their ideas on others, while others retreat to silence. In most organizations, there is a small minority who are able to speak up and be heard when others have shut down. In this session Justin will demonstrate the skills these leaders possess and show you how to use them to get the best out of people when the stakes are high and emotions are strong.

Inventory Management

CRUCIAL ACCOUNTABILITY: TOOLS FOR RESOLVING VIOLATED EXPECTATIONS AND BROKEN COMMITMENTS Justin Hale, VitalSmarts

Tuesday, July 12, 3:15 pm – 4:15 pm Imagine your colleague misses deadlines despite your repeated crucial conversations with him about the negative impact of his behavior. After each conversation, he commits to change. He has good intentions. And yet, day in and day out, he fails to deliver on time. So what’s getting in the way? How do you hold him accountable in a manner that produces better results and improves your relationship? In this session, participants will learn a high-leverage skill set that lies at the heart of problem solving and execution.

MANAGING YOUR INVENTORY AS A RETURN ON INVESTMENT Kevin Prochaska, President, Lombard Financial Services

Tuesday, July 12, 3:15 pm – 4:15 pm

This session focuses on managing the quality, timing, pricing, and behavior of both the pawnbroker and the customer to maximize the store’s investment in their inventory. The discussion will describe the variety of inventory quality, the effects of the timing of liquidation through pricing, and behaviors of the players which can be detrimental to overall profitability.

2016 Employee Regulations

2016 EMPLOYEE REGULATIONS: WHAT ARE WE REQUIRED TO DO? Jamie M. Hasty, Vice President, SESCO Management Consultants

Tuesday, July 12, 2:00 pm – 3:00 pm As we wrap up the first half of 2016, many employment regulations continue to leave their impact on organizations of all sizes throughout the country. This session will discuss anticipated changes to Wage and Hour regulations for 2016, review recent interpretation on OSHA guidance for restroom facilities, understand the National Labor Relations Board required changes to handbook policies, and provide practical tips and guidelines to comply with ACA in 2016 and beyond.

Federal Compliance

PAWNBROKERS AND DEALERS IN PRECIOUS METALS COMPLIANCE Robert Frimet, CAMS, President, RMF Consulting Group Inc.

Tuesday, July 12, 2:00 pm – 3:00 pm As a pawnbroker or dealer in precious metals, ensuring you are in compliance with all of the applicable regulations is imperative to your success. This course will detail the compliance responsibilities of all pawnbrokers and dealers in precious metals, including: 8300s, SARs, dealers in precious metals requirements, what triggers a suspicious activity report, and what you can do to maintain a strong bank relationship. Questions? PawnExpo.com

WEDNESDAY | JULY 13 Numismatic Crime

WEDNESDAY SCHEDULE

ASK THE EXPERT: LAW ENFORCEMENT’S RESPONSE TO NUMISMATIC CRIME Doug Davis, President, Numismatic Crime Information Center

Wednesday, July 13, 8:30 am – 9:30 am

8:00 am – 11:00 am Education Sessions

Thefts, burglaries, and counterfeits related to coins, paper money, gold, and silver are increasing and criminals are targeting pawn stores. Law enforcement’s lack of knowledge in the area of numismatics makes it critical for pawnbrokers to know how to address these issues. Learn the laws related to coins, gold, and silver, how to work with law enforcement, how to identify investigative resources, and ways to minimize your losses in the area of numismatic crimes.

11:15 am – 12:15 pm Pawnbroker Networking Luncheon 11:15 am – 12:15 pm Young Professionals Luncheon 12:30 pm – 5:30 pm Trade Show 4:00 pm – 5:30 pm Trade Show Reception 7:00 pm – 9:00 pm NPA PAC Event – Additional Ticket Required

PRODUCT KNOWLEDGE: DIAMOND CLARITY GRADING Presented by GIA

PRODUCT KNOWLEDGE SESSIONS

Thursday, July 14, 1:15 pm – 2:45 pm Thursday, July 14, 3:30 pm – 5:00 pm This session provides an overview of GIA’s Clarity Grading System along with hands-on practice evaluating the clarity of mounted diamonds. It will cover clarity grading, proper loupe technique, and the limitations of grading a mounted diamond.

PRODUCT KNOWLEDGE: LUXURY WATCHES

Adam Ralph Harris, Horologist/ Consultant, National Association of Watch & Clock Collectors, Inc.

Wednesday, July 13, 8:00 am – 9:30 am Thursday, July 14, 1:15 pm – 2:45 pm This session will help you discern a counterfeit wristwatch from the genuine, focusing on the top 10 manufacturers. The presenter will provide tips and other important information on subjects like reworked dials, marriage or Franken pieces, complications, and homage versus Franken versus reworked, with hands-on examples of both counterfeit and genuine wristwatches.

Questions? PawnExpo.com

PRODUCT KNOWLEDGE: GUITARS AND STRINGED INSTRUMENTS

Richard Bennett, Vice President, and Ian Harold, Media Manager, Musical Instrument Reclamation Corp

Wednesday, July 13, 8:00 am – 9:30 am Thursday, July 14, 1:15 pm – 2:45 pm This session will remove the mystery of buying and selling musical instruments. Attendees will learn what to look for when inspecting instruments, how to make minor adjustments to increase playability, and gain the knowledge to buy or sell with confidence. Attendees will have the opportunity to practice the tips learned by adjusting real instruments.

THURSDAY | JULY 14 PAWNBROKER PEER ROUNDTABLES

Roundtables

The pawnbroker sitting next to you is one of your greatest resources. At the roundtables, attendees have the opportunity to discuss current pawn topics with their peers and learn best practices from one another. Pawnbrokers only.

Thursday, July 14 1:15 pm – 2:00 pm

2:15 pm – 3:00 pm

3:15 pm – 4:00 pm

THURSDAY SCHEDULE

Unique Types of Collateral

Transitioning to the Next Generation

Creative Advertising Strategies

9:00 am – 10:00 am Trade Show Continental Breakfast

Consignment

Employee Incentives

Increasing Your Loan Base

9:00 am – 1:00 pm Trade Show 1:15 pm – 4:00 pm Pawnbroker Peer Roundtables 1:15 pm – 5:00 pm Product Knowledge Sessions

Hotel Information

5:30 pm – 7:00 pm Closing Reception

THE MIRAGE HOTEL AND CASINO, LAS VEGAS

Pawn Expo 2016 Room Rate

NPA PAC Event

$123 per night, plus applicable taxes and resort fee of $22 per night.

FEATURING JERSEY BOYS

Wednesday, July 13, 7:00 pm Don’t miss your chance to see Jersey Boys, at the NPA PAC Event at Pawn Expo. By contributing to the NPA PAC, you help shape the laws that influence your business and our industry, and best of all, you’ll spend a great evening with friends. Tickets are $250 each and include one ticket to the Jersey Boys performance plus a welcome gift at Pawn Expo 2016.

Visit PawnExpo.com to make online reservations, or reserve via phone by contacting group reservations at (800) 627-6667. Give the code NPA16A to receive the group rate. The group rate is available through June 9, 2016, based on availability.

Sponsors PMS 282

PMS 1255

GEIB REFINING CORP

Questions? PawnExpo.com

BUSINESS SENSE

Fake or Super Fake?

HOW TO DISTINGUISH GENUINE WATCHES FROM THE COUNTERFEITS By Adam R. Harris

Genuine Panerai movement. Courtesy of National Association of Watch and Clock Collectors, Inc.

FORTY MILLION FAKE WATCHES are made each year compared with 30 million genuine Swiss watches. For example, Cartier, a top luxury watch company, reported there are 40,000 counterfeits of its watches versus 50,000 genuine watches. The Federation of the Swiss Watch Industry claims that counterfeiting costs the watchmaking industry billions each year. “The worst thing about it is that these copies are being made more and more professionally,” said Nick Hayek, head of Swatch Group. For pawn store owners, this issue is compounded by people buying and selling these luxury timepieces and those selling counterfeit pieces they believe are genuine. Store owners and employees must learn the

NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

Fake swan regulator. Courtesy of Adam Harris

pitfalls and other issues surrounding these counterfeit pieces in order to protect their reputation, profits, and clients. Gone are the days when a counterfeit watch could be spotted by just its weight, the so-called “cheap” Chinese fakes. Today’s “super” fakes are nearly impossible to differentiate from the genuine ones. Sometimes only a close examination of the movement can discern the difference. However, this sort of examination could have disastrous effects on some watches. For example, opening the case back on modern diver or other complex watches breaks the watertight seal requiring the watch to be returned to the manufacturer or authorized distributor for resealing and pressure testing.

BUSINESS SENSE As the list of luxury watchmakers grows, with new companies entering the market like Mont Blanc, Panerai, Bell and Ross, and Hublot, keeping up to date with the techniques being used in counterfeit timepieces can seem like a full-time job. But pawnbrokers, jewelers, or retailers must learn about the techniques being used by many manufacturers and models. No one is immune to counterfeit watch sales. I see four or five fake watches a day offered for sale at auction sites and even on the more famous auction house websites. In my work at a local pawn store, Goldrush, Spain, we see and experience every manufacturer, every model, and every story. Recently we were asked to loan $500 on a Panerai Luminar Marina (watch pictured on page 40), probably one of the bestfaked watches today. This watch looked pretty good; the dial was perfect, passed our “litmus” test, and the case felt and looked good. But on close inspection under the loupe, I could see a typical error found on counterfeit Panerai’s that have a custom fitted swan neck regulator. Note the small screw on the left side of the regulator is not centered and the head is hanging over the side – not Panerai quality, as compared to a genuine swan neck regulator.

When trying to discern if a watch is genuine or fake, a basic checklist is helpful. Just because one area is correct, it does not mean other areas should not be checked. And if one area is incorrect, the watch is not genuine. I dubbed this checklist the CSI form for Watches (Correct, Suspect, Incorrect) and note each part of the watch as either correct, suspect, or incorrect as I work through reviewing a piece. BASICS

CORRECT

SUSPECT INCORRECT

1. Does the watch have a box and papers? 2. Do the papers match with the serial number of the watch?

DIAL 1. Check the quality of printing and spelling. Logos and words should be straight, sharp, and substantial. 2. Fonts should be checked against genuine examples.

CASE, CROWN, STRAP 1. Does the case feel like the correct weight? 2. Is the crown the correct style (shape, material, and logo)? 3. If the crown is screwed down, unscrew it and pull it to hand setting. Does the stem feel solid? Or is it wobbly (fake)? 4. Does the strap (metal) fit precisely and tight to case? Look carefully on the underside. It should fit snugly and firmly. 5. Does the strap have the part number stamped on the lug? 6. The clasp/deployment buckle should snap tightly closed. 7. Examine the logo number on the strap. Any logo or numbering on the strap should be firmly impressed in the metal.

COMPLICATIONS 1. Check that all functions work as expected. 2. Movements should be finely finished and fully signed.

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NATIONAL PAWNBROKERS ASSOCIATION

BUSINESS SENSE

Spotting a fake takes experience and education. The National Association of Watch and Clock Collectors offers a three-day course titled “Luxury or Lie” where participants learn what to be aware of and what to expect in a genuine timepiece. The course offers all participants regular updates on new counterfeit issues and an email helpline. Information on the course can be found at nawcc.org or by emailing education@nawcc.org.

Adam R. Harris is an Horologist, Course Developer, and Instructor of “Luxury or Lie” for the National Association of Watch and Clock Collectors and Guest Curator, Wristwatches, National Watch and Clock Museum.

A hands-on course by watch specialist Adam Harris May 21-23, 2016, at the NAWCC education facilities, Columbia, PA

How to identify genuine watches • Brands discussed will include: Omega • Hublot • Rolex • Rolex-Tudor • Breitling • Cartier Montblanc • Tag Heuer • Panerai • Bell & Ross • Girard-Perregaux Registration Fee: Early bird special, on or before 4/21/2016: $900 for NAWCC members; $1,000 for non-members $1,250 regular (registration after 4/21/2016) For additional information or to register: Contact the Education Department, 717.684.8261, ext. 237 or email: kknaub@nawcc.org www.nawcc.org • 514 Poplar St., Columbia, PA 17512-2130

NATIONAL PAWNBROKERS ASSOCIATION

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Midwest Pawnbroker’s Conference & Convention May 16-18, 2014 Booth - 30 JCK Exhibition 2014 June 1-4, 2014 Booth - B4446

50 | NATIONAL PAWNBROKERS ASSOCIATION | WINTER 2015

JIS Miami Beach Show October 11-14, 2014 Booth - 1317 California Pawnbrokers Association (CAPA) SPRING 2016 | NATIONAL PAWNBROKERS ASSOCIATION October 24-26, 2014

YOUNG PROFESSIONALS

Young Professionals Take On DC JOIN NPA IN MAKING A DIFFERENCE

As we head into the 2016 Legislative Conference, the NPA Young Professionals are excited to see our group join us in Washington, DC! For those who have never been to the NPA Legislative Conference, you are missing out on a great opportunity.

topics that the GRC work through on a daily basis to fight for our industry. Members are typically grouped with other pawnbrokers in the same state which provides for great networking. You will leave the briefing prepared and ready to educate your members of Congress on a one-to-one basis.

The Legislative Conference allows for an up-close and personal experience with The 2016 Legislative Conference is scheduled your members of Congress. NPA lobbyist, for April 27, 2016, and more details can Kathleen Barbee, Cliff Andrews, and the NPA staff work Young Professionals be found at NationalPawnbrokers.org/ Committee Chair tirelessly to schedule appointments with Senators Legislative-Conference. Also, don’t forget there is and Representatives for those pawnbrokers in a new Certified Pawn Professional (CPP) course, attendance. This experience can be a lot to take in if Federal Regulations, being offered the following day, you’ve never been before, so below is an overview of April 28. It’s a good opportunity to complete another the conference activities. course while you are already there. A breakfast and briefing is scheduled at the Hamilton Crowne Plaza Hotel where members of the Government Relations Committee (GRC) will review key talking points and other topics to prepare you for your visits on Capitol Hill. This is an intimate setting where you have the opportunity to fully understand the amount of work and legislative

If you haven’t already signed up for the Young Professionals Member Forum, contact Marliss@ NationalPawnbrokers.org for information on how to join. We are looking forward to seeing you in Washington, DC.

Good to Great by Jim Collins WHY SOME COMPANIES MAKE THE LEAP…AND OTHERS DON’T Jim Collins, an established management “Greatness is consultant, explores the reasons that not a function some companies make the jump from of circumstance. being good to great, and others don’t. Greatness, it Collins and his team of researchers turns out, is aimed to determine the factors and variables that lie within the small group largely a matter of conscious of elite companies. He used a group of 11 companies that had sustained choice, and “greatness” for at least 15 years. discipline.”

COLLINS CONCLUDED HIS RESEARCH WITH FIVE DISCOVERIES: 1. High-profile individuals almost never lead companies to greatness. The characteristics of a “level five leader” are things such as extreme personal humility and intense professional will. They tend to steer clear of celebrity status and attention, focusing more on the task at hand which is leading their company to greatness. 2. Great vision without great people is irrelevant. People are not the most important assets, but the right people are. To take that step from good to great, a

NATIONAL PAWNBROKERS ASSOCIATION

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HarperBusiness, 2001

BOOK CORNER

company must have the right workers who are ready, willing, and have the right attitude and skills to make it happen. 3. It is important to know your strengths and weaknesses. Each company should know what they are all about. What do you stand for, what are you good at, bad at, etc.? Knowing all these things will lead to better business decisions, direction, and much more. 4. A culture of discipline is key for success. If a company builds a strong culture of discipline, it should still be able to thrive even after the leaders are no longer with the organization. Each person is willing to do what it takes to keep the company on its feet. 5. In the age of technology, find what works. It seems like every time you turn around there is a new gadget on the market, but that doesn’t mean that companies must utilize the “latest and greatest.” Good-to-great companies have discovered that it’s not about what’s new, but about what works. Find the technology that works best in your business and utilize it to its full ability.

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NATIONAL PAWNBROKERS ASSOCIATION

BUSINESS SENSE

Marketing To Millennials REACHING A NEW GENERATION OF BUYERS By Emmett Murphy, 3 CLiCk Media LLC

Like it or not, the largest generation in U.S. history is changing the way we do business. How can you be prepared for the shift? A new generation of consumers is dominating the marketplace, and with over $200 billion buying power annually, they’re poised to reshape our economy. The Millennial generation is the largest in U.S. history, larger even than that of the Baby Boomers. Millennials are now entering a critical point in their lives making pivotal decisions about finances, families, careers, and real estate. Over the course of the next 20 years, how they shop will help shape the economy of a new generation. They have a unique worldview as a result of growing up during a time of economic uncertainty and an unprecedented affinity for technology and mobile devices.

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Armed with the freedom of choice previous generations did not have, traditional marketing techniques simply don’t apply to them. Business owners and advertisers are constantly searching for creative, new solutions to connect with them.

WHO ARE THEY? Millennials are the group of Americans born between 1980 and around the mid-2000s, which currently places the earliest wave in their early 30s. They make up the largest generation in the U.S., representing approximately one-third of the population. They’re also the most diverse generation. According to a 2013 Census Bureau Report, around 20 percent of people ages 20 to 34 were born in a foreign country. Millennials are the first generation to grow up with the internet, which many consider the most important factor in shaping their behavior and views. Computers had already made their first appearance in classrooms

BUSINESS SENSE

in the late 70s, and new forms of technology have been emerging non-stop ever since. Consequently, Millennials have no problem adopting and adapting to new devices and platforms all the time. They value creativity, play, and the close-knit communities found in daily life and on social media. Pricewaterhouse Coopers (PwC US), in association with The Global Financial Literacy Excellence Center, conducted a 2012 study of the personal finances of Millennials, including their financial standing and spending habits. The study found that Millennials are heavy users of Alternative Financial Services (AFS), citing that between 2007 and 2012, 42 percent of Millennials used an AFS, such as payday loans, pawn stores, auto title loans, tax refund advances, and rentto-own products. Among users of AFS, 50 percent had a high school diploma or less, 28 percent had college degrees, 39 percent had a bank account, and 35 percent were credit card users. Researchers found that these Alternative Financial Services were common even among “middle-class” Millennial households. According to the study, “Millennials are financially fragile. Millennials face a spectrum of financial challenges and fear they have little maneuvering room in case of an emergency. Nearly 50 percent don’t believe they could come up with $2,000 if an unexpected need arose within the next month. Nearly 30 percent are overdrawing on their checking accounts.” As they come of age, Millennials have witnessed decisive shifts in economic trends, which have played a pivotal role in shaping their outlook and worldview. They will have to contend with starting their careers during the recent historic economic decline. Many of them will not begin to enter the workforce until after completing high school or a post-secondary education. In fact, they’re likely to spend as much time as possible building employable skills. As a result of focusing primarily on studies, Millennials will rely more and

more on loans to finance their educations. And due to the pronounced economic downturn, once they enter the workforce, they’ll find fewer opportunities. Another important feature of the generation is their diminishing concern with property ownership. Millennials focus on access rather than ownership. According to a Goldman Sachs Global Investment Research Study, they are turning to services that provide access to products — like car sharing and luxury goods — without having the burden of ownership. According to the same study, this trend is giving rise to a “sharing economy.” All of these factors help to determine how and why Millennials will spend their money. Their eagerness to adopt online shopping and the scarcity of opportunities alone have transformed them into savvy shoppers. They harness the full power of the internet to conduct split-second price comparisons and search online reviews and ratings. A heightened sense of community and sharing means they see more value in secondhand items. With their inclination to use social media and online review platforms, they can play key roles in making or breaking a business. Finally, their financial situation is causing them to look more and more at pawn stores in times of emergencies.

WHAT WORKS WHEN MARKETING TO MILLENNIALS? GO MOBILE. A survey by the Pew Research Center found that 86 percent of people aged 18 to 29 have a smartphone. Millennials are more likely to sleep by their smartphones and they spend a significant portion of their free time searching for products on their mobile devices. A mobile website designed to adapt to any size screen or display on every mobile device isn’t a luxury for online users anymore. They demand it. OFFER MEANINGFUL ONLINE CONTENT. Millennials want to feel like the content they’re finding on the internet was crafted (Continued on page 51)

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NATIONAL PAWNBROKERS ASSOCIATION

BUSINESS SENSE

Lacking in Loyalty? HOW TO USE A LOYALTY PROGRAM TO MAXIMIZE YOUR PAWN BUSINESS By Marko Evans, Vice President of Sales and Marketing, CompuPawn, Vertical Computer Systems, Inc.

Have you ever stopped to think about how valuable customer loyalty is to your pawn business? If not, you should. Customer loyalty and referrals play an integral part in driving your sales, and there are plenty of reasons why. Selling to existing customers is easier and cheaper than finding and selling to new ones. On average, the cost of obtaining a new customer is typically five times higher than gaining repeat business from an existing one. Loyal customers also tend to buy more, buy more frequently, and often recommend your business to others. Yet, too many pawn businesses neglect the potential of their loyal customer base in pursuit of new customers. In the pawn business, itâ&#x20AC;&#x2122;s essential to invest in your

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customers by implementing the right programs. Right now the pawn industry is buzzing about e-commerce, but while e-commerce certainly offers some value, it actually drives people out of your store. In contrast, loyalty programs drive them back to your businessâ&#x20AC;&#x201D; winner, winner! By integrating a loyalty program, you will maximize the reach and income potential of your loyal customers, and provide more steady business and higher revenues. So, if returning and referred customers are your best customers, are you doing everything possible to obtain referrals and repeat business?

BUSINESS SENSE Too many pawn businesses rely solely on word-ofmouth referrals, but they will only get you so far. In contrast, a unique and easy-to-use loyalty and referral program can help build strong and consistent customer relationships in the long-run. If you don’t have a loyalty program in place, now’s the time to get started. But, what makes a loyalty program valuable for your pawn business and your customers? Whether you create your own loyalty program in-house, or purchase a loyalty program or app from a third-party vendor, seek out a program that highlights these key features below. CAPTURE CUSTOMERS’ CONTACTS

One of the biggest downsides of a traditional customer reward card—think punch cards or key chains—is

DID YOU KNOW . . . • 46% of retailers say loyalty programs are the best sales drivers. • 64% of retailers say their loyalty/rewards program is the best way to connect with consumers. • 57% of mobile users admitted that loyalty programs and points are the top feature in a mobile wallet, with 56% giving that title to discounts and deals. • Referred customers are more loyal customers, and they are 2.5 times more likely to give referrals to others and are more comfortable visiting your business for the first time. *SOURCE: FORRESTER CONSULTING

loyalty app. Messages can contain an offer, a greeting, a notification, or an inventory update—all designed to focus your customer’s attention to the loyalty app and your business. Push notifications are a less intrusive marketing tactic than text messaging, since they can be delivered without interrupting the user in their current activity, and never incur an additional cost. They are also not regulated by the FTC, so they have fewer limitations than SMS messages. that these old-school tools don’t capture the customer’s digital contact information you need to grow your business. More and more retailers are smartly moving away from physical forms of loyalty programs to digital ones, and are seeing great return on their investments. Remember, the best referral is one from an existing customer who knows and trusts your business. CONSIDER PUSH NOTIFICATIONS OVER TEXT MESSAGING PROGRAMS

Many loyalty apps or programs use text messages as the main way to communicate with customers, but text messaging can limit your character count and image capabilities. Alternately, push notifications allow you to send a complete message with full graphics and no character limits. Push notifications work by sending an alert to the main screen of a customer’s smartphone which then directs them to a message within your

TIE IN SOCIAL MEDIA

Loyalty is about repeat business as well as referrals. You need to make sure you’re rewarding your customers for both. By tying your loyalty program into social media, you’ll encourage ongoing communication and expand your pool of potential customers significantly. Since consumers spend so much time on social media platforms, it only makes sense to connect with them through social channels, while also making the referrals process easier for customers by allowing them to make referrals through their social platforms.

(Continued on page 61)

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NATIONAL PAWNBROKERS ASSOCIATION

COMPLIANCE (Continued from page 25) Compliance: Fact vs. Fiction

In the decade since I entered the industry, I have seen a paradigm in pawnbrokers and dealers in precious metals making an effort to follow the regulations, get compliant, and ensure they do their fair share to prevent financial crimes. In 2016, for those of you who haven’t started, it’s never too late, especially with all the great efforts provided by the NPA with their conventions, certifications, and third-party support being offered throughout the year. Bob Frimet is a Certified Anti Money Laundering Specialist (CAMS) representing MSB’s, Pawnbrokers, Dealers in Precious Metals, and Digital Currency processors. He has provided Anti Money Laundering Programs, Policies and Procedures, Independent Reviews and training since 2005. Bob can be reached at (702) 596-8370 PDT or bob@checkconsultants.com. You can also visit his websites: CheckConsultants.com and CheckCashingCompliance.com

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BUSINESS SENSE (Continued from page 47) Marketing to Millenials

will go a long way to building a lasting relationship. BE SOCIAL. Social media sites are the place to reach the target Millennial audience. It’s where they engage not only with friends and family, but with businesses and brands. But getting the message to break through can be tough. Focusing posts on Millennial’s core values is key to reaching this demographic. Use concepts such as life is short, dreams come true, or never give up. specifically for them. They don’t trust advertisers that simply urge them to open their wallets. They want advice, humor, education, and meaningful experiences. MAKE A CONNECTION. Sharing personal stories, putting faces on brands, or demonstrating value as a responsible business is the way to a Millennial’s heart. Above all, they want to know that a business has a higher purpose than just convincing them to buy something. BE ORIGINAL. The world is full of nonsensical adspeak that lobs around vague terms like “value” or “convenience.” This approach only serves to awaken the cynical side of the Millennial generation. Creativity is important to them, and they enjoy the sense of intrigue they feel at discovering unconventional and daring marketing.

Waiting for Millennials to fall into traditional consumer patterns is a lost cause. As they enter new stages in life, they will still hold on to their established values, and companies that cater to their needs and attitudes will survive this global shift in the way we do business. Sources: https://www.pwc.com/us/en/about-us/corporate-responsibility/ assets/pwc-millenials-and-financial-literacy.pdf http://www.pagemodo.com/blog/5-ways-to-reach-millennialswith-your-social-media-campaigns/ http://www.pewinternet.org/2015/10/29/technology-deviceownership-2015/ http://www.usatoday.com/story/tech/2015/10/29/smartphonessaturation-millennials-pew-research/74805506/

DITCH THE OUTBOUND MARKETING. Millennials want to make their own choices when they search brands or products, and they don’t trust traditional tactics like direct mail, radio ads, or pop up ads on websites. All of these types of advertising come across as annoying and unsolicited. SHARE EXPERTISE. Content provided by industry experts gives your business or brand an enormous amount of credibility in the Millennial consumer’s opinion. White papers, e-books, how-to videos, and blog posts are all a great way to attract the attention of consumers who are actively looking to find out more about your product or service. It will also give you a notch up in the search engine rankings. LET THEM COLLABORATE. Millennials will be more engaged with a brand when they feel like they had a say in its creation. Campaigns that encourage these consumers to use their creativity or express themselves

Emmett Murphy New Media Strategist 3CLiCkMedia

Emmett Murphy is the New Media Strategist at 3 CLiCk Media. Mr. Murphy handles all Public Relations for the National Pawnbrokers Association and has appeared frequently in the New York Times, Wall Street Journal, USA Today, and Time magazine on behalf of the NPA and the pawn industry. 3 CLiCk Media has developed and marketed NationalPawnbrokers.org, PawnTweet.com, PawnFyNdR.com, and PawnExpo.com, and has worked with the Dixie Educational Conference & Trade Show, California Pawnbrokers Association, and many leaders in the independent pawnbroking community.

SPRING 2016

NATIONAL PAWNBROKERS ASSOCIATION

25th Annual Midwest Pawnbrokers Convention OPEN TO

ALL PAWNBROKERS AND LIKE BUSINESSES

May 13-15, 2016 THE GALT HOUSE HOTEL LOUISVILLE, KY

Lowest Ever

Registration Fee

www.midwestpawnconvention.org

EXHIBITORS

The FINEST vendors to the trade will be exhibiting all their best goods and services. Come spend time with the companies you will WANT to do business with. Attending the Midwest show is one of the best business decisions I make all year. Ric Barr Castle Pawn, New Castle, IN

SCHEDULE OF EVENTS FRIDAY P.M. • WELCOME COCKTAIL PARTY There will be a complimentary cocktail party at 5:00 p.m. A time to make new friends and renew old acquaintances.

SATURDAY 5-14-16

I always show a proﬁt by attending the Midwest show. David Schoeneman Shane’s the Pawn Shop, Chicago Heights, IL

SUNDAY 5-15-16

8:00 a.m. - 9:00 a.m. SEMINAR 8:00 a.m. - 9:00 a.m. SEMINAR 9:00 a.m. - 10:00 a.m. SEMINAR 8:00 a.m. BREAKFAST (EXHIBIT HALL OPENS) 10:00 a.m. - 11:00 a.m. SEMINAR 11:30 a.m. $1,000 DRAWING 11:00 a.m. - 12:00 p.m. SEMINAR 11:30 a.m. EXHIBIT HALL CLOSES 12:00 p.m. - 4:00 p.m. EXHIBIT HALL OPEN 11:30 a.m. STATE ASSOCIATION MEETINGS 12:00 p.m. - 1:30 p.m. LUNCH (IN/NEAR EXHIBIT HALL) 4:00 p.m. - 5:00 p.m. SEMINAR 6:00 p.m. - 7:00 p.m. COCKTAIL RECEPTION/BANQUET 7:00 p.m. KEYNOTE SPEAKER 8:00 p.m. LIVE AUCTION TO BENEFIT STATE ASSOCIATIONS

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CONVENTION HOTEL

THE GALT HOUSE HOTEL 140 North 4th Street Louisville, KY 40202 For Reservations: 502-589-5200 • Convention Room Rate $130.00 For More Information and Registration Form Contact Ron Stempkowski • (219) 261-3173 • email 1IPA@comcast.net 52

2016 | SPRING SUBJECT ALL CONVENTION ATTENDEES TO APPROVAL BY MANAGEMENT

NATIONAL PAWNBROKERS ASSOCIATION

Your Stone Headquarters Find the selection and prices you need

Your business depends on having a trusted diamond and gemstone source. And with the largest inventory in the industry, Stuller can meet your needs for quality, consistency, and competitive pricing every time. Whether a customer comes in for a repair or redesign, find exactly what you need to get the job done. Shop now at Stuller.com/yoursourceNPA.

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NATIONAL PAWNBROKERS ASSOCIATION

COMMUNITY INVOLVEMENT

Invest In an Education, Invest In a Future HELP SEND A STUDENT TO COLLEGE “This scholarship will help make college much more affordable and make it easier for me to reach my goal of opening my own restaurant.” Wesley Strong, accompanied by his mother, Veronica Holtzclaw, accepts a $1000 scholarship from Jane

Future Business Leaders (FBL) scholarship fund. FBL was established by the NPA in 2003 and has since awarded approximately $135,000 to deserving students. By sponsoring a student, not only are you investing in their future, you are investing in your community as well.

To sponsor a student, download the guidelines and application form from the NPA website, NationalPawnbrokers. org, under the Community Relations tab. Scholarship winners are chosen based on academic performance, community leadership, and written essay submissions. The deadline for applications is April 22, 2016.

-Rory Nimmons Houston, TX

Garris of Sylacauga Pawn, Sylacauga, AL.

DID YOU KNOW, according to the Economic Policy Institute, American college graduates made 98 percent more per hour on average in 2013 than people without a degree? College, especially paying for it, can be a struggle, but the statistics speak volumes: the struggle is worth it. NPA members in good standing are able to sponsor a student from their community whether it is a child, customer, employee, or other individual, through the

If you want to donate, but do not have a student to sponsor, you can make a financial contribution. Send your check to NPA, PO Box 508, Keller, TX 76244. Help a student earn that 98 percent.

MEMBER NEWS

National Pawnbrokers Association New Members OCTOBER 1, 2015 – JANUARY 31, 2016 PAWNBROKERS

Pacific Beach Loan and Jewelry • San Diego

Alabama

Pawn Plus LLC • San Diego

Pee Wee’s Pawn #2 • Birmingham Colorado

Pee Wee’s Pawn #3 • Bessemer

Vail Valley Pawn • Gypsum Arizona Florida

Mr. Pawn LLC • Lake Havasu City

B&K Pawn Guns and Gold • Saint Augustine California

Gold N Connection • Hollywood

Bakersfield’s Best Pawn • Delano

R J Cash Enterprises, Inc • Miami Gardens

CashCo Jewelry & Loan • Escondido Gems N’ Loans • Dana Point

Kentucky

East County Pawn • El Cajon

Parkway Gun and Pawn • Salyersville (Continued on page 65)

NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

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SPRING 2016

CALIFORNIA Sacramento California Pawnbrokers Association

Number of licensed pawnbrokers in the state of California

750

The median family income for the state of California

$89,951 1 OUT OF 8 The number of United States residents that live in California (American Community Survey, US Census Bureau)

SPRING 2016

STATE PAWN FACTS

1956

The year CAPA (California Pawnbrokers Association) was founded. It has served the interests of tens of thousands of responsible pawnbrokers and secondhand dealers for nearly 60 years.

$1.985 trillion The Gross Domestic Product (GDP) for the state of California. It ranks first in the United States and the 10th largest GDP in the world.

NATIONAL PAWNBROKERS ASSOCIATION

GOVERNMENT RELATIONS

New York City Pawnbrokers and Second Hand Dealers Fight for Business Records Privacy Rights UPDATE JANUARY 12, 2016

The plaintiffs maintain that the challenged provisions violate their rights of privacy and the right to be free from unreasonable searches and seizures under the NYS Constitution. While the challenged provisions include a state law and local ordinances which have been on the books for many years regarding the inspection of written business records, the litigation was largely predicated upon enactment of a 2013 NYC local law which required businesses, on a daily basis, to transfer 100 percent of their transactional information (including photographs of items purchase or used as collateral) to Leads Online via the internet to facilitate dragnet electronic searches for criminal activity by the NYPD. The New York City (NYC) law is similar to laws enacted throughout the country and in other local jurisdictions located throughout the state of New York.

In 2014, Collateral Loanbrokers Association of New York (CLANY) and a number of its members and second hand dealers were joined by a number of second hand customers and pledgers who commenced an action in Bronx County Supreme Court based largely upon the New York State (NYS) Constitution seeking to enjoin the New York City Police Department (NYPD) and the New York City Department of Consumer Affairs from enforcing a state statute and a number of local ordinances requiring unlimited access to books and records maintained by the licensees.

NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

The trial level court, (Justice Mitchell Danziger) in a scholarly 60-page decision, found in favor of the plaintiffs and issued a temporary injunction preventing enforcement of the challenged state statute and local ordinances while additional proceedings move forward to secure a permanent injunction. Collateral Loanbrokers Assn. of N.Y., Inc. v City of New York,Â 47 Misc. 3d 1225(A) 2015 N.Y. Misc. LEXIS 1903. However, NYC appealed the lower level courtâ&#x20AC;&#x2122;s decision and secured a temporary stay of the temporary injunction to afford NYC an

GOVERNMENT RELATIONS

opportunity to secure an appellate review of the trial judge’s order granting the preliminary injunction. Plaintiffs anticipate that, in the early spring of this year, the lower court’s order will be upheld “as is” or possibly modified when the trial court’s decision is reviewed in depth by the appellate court. (It is also possible the lower court’s order may be completely reversed, but a complete reversal is considered very unlikely.) The appellate court’s grant of a temporary stay of the lower court’s order was based in major part on NYC’s representation to the court that it would not seek to enforce the new 2013 law until the appellate court review process was completed. Presently, pawnbrokers and second hand dealers in New York City are not required to give police electronic access to their business records. It is important to emphasize that the trial level Court’s Order is predicated on the New York State Constitution and particularly Article 1 Section 12 and bars warrantless dragnet searches of both written and electronic records. The Court’s analysis, in large measure, was based on a pivotal 1992 case decided by New York State’s highest court (Court of Appeals). New York’s highest court in People v. Keta (a/k/a People v. Scott) 79 NY2d 474 (1992) afforded highly regulated businesses, such as second hand dealers, pawnbrokers, and auto dismantlers, protection from unreasonable searches which extend to non-public areas of a licensee’s premises including unlimited searches of books and records. The Keta case unequivocally rejected the reasoning of the U.S. Supreme Court in U.S. v. Burger 67 NY2d 338 (1996), revd New York v Burger, 482 US 691 (1967) which found that the Fourth Amendment of the United States Constitution does not afford auto dismantlers (and other highly regulated businesses) a similar measure of protection with respect to warrantless searches by law enforcement officers of their business premises. Fortunately, when it comes to constitutional protections, a state constitution can trump the federal constitution.

by other people – is, like the protection of his property and his very life, left largely to the law of the individual States.” (Collateral Loanbrokers Association of New York v, City of New York 2015 NY 47 Misc. 3d 1225(A) 2015 N.Y. Misc. LEXIS 1903 at page 33.) Other states have constitutional provisions which may provide protections similar to those found under Article 1 Section 12. However, litigation in each such state is the only means available to test the law in each jurisdiction. At the same time, while the present challenge is primarily focused upon New York City, the case will help to define the scope of constitutional protection for all second hand dealers and pawnbrokers in the entire state. In short, the plaintiffs do not object to the adoption of state or local law requiring spot checks of licensees’ businesses to insure that they are in compliance with administrative requirements pertaining to their businesses such as accurate record keeping and signage. However, the challenged statutes are designed to provide law enforcement tools to search for criminal activity under the guise of an administrative search and are violative of the Plaintiffs’ constitutional rights. The challenged statutes give law enforcement the means to conduct ongoing warrantless dragnet fishing expeditions in a search for stolen property and cannot withstand scrutiny under the NYS Constitution. This litigation is precedent setting and anyone inclined to help in the effort is asked to contribute to the NYC litigation fund. Please reach out to the Law Offices of Kriss, Kriss and Brignola, LLP by e-mailing the lead attorney, Mark Kriss, at mkriss@ krisslaw.com or calling (518) 449-2037, ext 207. This article was prepared by Mark C. Kriss, Esq. None of the information contained herein should be construed as legal advice or the practice of law. If you need legal advice, please seek the advice of independent legal counsel.

Justice Danziger, in his June 3, 2015 opinion, expressly noted that “….the protection of a person’s general right to privacy – his right to be let alone

SPRING 2016

NATIONAL PAWNBROKERS ASSOCIATION

BUSINESS SENSE (Continued from page 27) Rapaport Diamond Insights

within the trade and pawnbrokers could only sell their breakout melee at lower prices. The Rapaport Melee Index (RMI™) consequently declined 16.9 percent in 2015. While the RMI was relatively stable from mid-2012 to the end of 2014, it ended the year 30 percent below its peak in mid-2011 (see chart B on page 27). 2016 OPTIMISM

Diamond market sentiment improved in the first quarter of 2016 following the relatively positive U.S. holiday shopping period. The U.S. market continues to compensate for uncertainty in China where stock markets slumped and the currency depreciated again in January. Significantly, the mood improved as diamond prices continued to firm due to shortages of specific diamond categories. Manufacturers maintained low polished production as they were uncertain whether the market would continue to be driven by reduced supply or if it would improve due to an increase in demand. Regardless, as polished prices firmed, optimism grew that diamond market profitability and liquidity levels would improve in 2016. That should also present better opportunities for the pawn sector.

NATIONAL PAWNBROKERS ASSOCIATION

TIPS FOR PAWNBROKERS OPERATING IN THE DIAMOND MARKET:

• Understand your merchandise and break it down by shape, size, color, and clarity before selling. • Grade your larger and fine-quality diamonds at the GIA to achieve higher sales prices. • Sell your diamonds to reputable firms and get multiple offers. • Monitor your prices throughout the year. For more information about the diamond industry, visit diamonds.net.

The Rapaport Group is an international network of companies providing added value services that support the development of fair, transparent, competitive and efficient diamond and jewelry markets. Established in 1978, the Rapaport Price List is the primary source of diamond price and market information. Group activities include Rapaport Information Services, Rapaport Magazine, and Diamonds.net, providing research, analysis and news; RapNet – the world’s largest diamond trading network; Rapaport Laboratory Services provides GIA gemological services in India, Belgium and Israel; and Rapaport Trading and Auction Services specializing in recycled diamonds and jewelry. The Group supports over 20,000 clients in 118 countries and employs 220 people with offices in New York, Las Vegas, Antwerp, Ramat Gan, Mumbai, Surat, Dubai and Hong Kong.

SPRING 2016

Your

Full Service

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Pawn and Precious Metals Compliance IRS Compliance Audit Guidance Check Cashing and Payday Loan Turnkeys

Serving the pawn community since 2005

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www.checkconsultants.com BUSINESS SENSE (from page 49) Lacking in Loyalty?

UTILIZE GEO-TRACKING

One of the best ways to maximize customer loyalty is to reach out to your customers when they are in close proximity to your store—or your competitors’ locations. By selecting a loyalty app with location-based capabilities, you can send promotions, reminders, or special offers to customers when they are near your store. This will increase impulse purchases and convenience purchases, while keeping your pawn business top-of-mind with your customers. In the pawn industry, loyalty and referrals grow revenue. Don’t underestimate the value of a good loyalty program. Instead, educate your employees about the value of customer loyalty and invest in a program that will maximize repeat business and referrals.

ABOUT COMPUPAWN

With more than 30 years of development experience in pawnshop automation and thousands of successful installations, CompuPawn has the skills and expertise to provide the best management tools for pawn businesses. CompuPawn was the first pawnshop application to move to internet-based cloud operations—reducing capital expenditures for its clients while providing unmatched quality, security, and functionality. CompuPawn also has exceptional scaling capabilities, making it the preferred choice for multistore operations. CompuPawn has developed an advanced, fast-to-deploy, scalable mobile loyalty app designed to grow pawnshop revenues by retaining existing customers and encouraging new customers to stay. CompuPawn makes it easy to boost referrals, increase web and social media presence, and most importantly, build client loyalty. Contact CompuPawn today at (866)545-9868 or sales@ verticalc.com to learn more about our loyalty and referral app, and how you can use it to grow your business. Or, visit our website at Compupawn.com

SPRING 2016

NATIONAL PAWNBROKERS ASSOCIATION

STATE NEWS

State Association Updates STATE PAWN NEWS ACROSS THE NATION on Wednesday, April 27. Another CPP course, Federal Regulations, will be offered at the end of the conference on Thursday, April 28. All pawnbrokers who have not attended the Legislative Conference in the past should consider supporting the industry by joining us in our nation’s capital.

ARKANSAS Tim Collier, President Arkansas Pawnbrokers Association hogtim@windstream.net

The Arkansas Pawnbrokers Association held its state convention and trade show at the Arlington Hotel in Hot Springs September 25-27, 2015. Pawnbrokers were treated to updates on the new state law regarding victims of property crime, a seminar on diamonds, and two sales seminars from popular representatives who support the pawn industry. There was good food, fun, and a lot of interaction among the pawnbrokers and vendors. With the start of 2016, we are looking forward to the Dixie Educational Conference and Trade Show March 4-6 in New Orleans. As an added bonus this year, NPA is offering the Human Resources course as part of the Certified Pawn Professional (CPP) designation program in conjunction with the conference on Friday, March 4, before the start of the show. I would encourage pawnbrokers from across the country to take advantage of this special offering as they are limited in space. We are also looking forward to the NPA Legislative Conference in Washington, DC,

NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

FLORIDA Joshua Davis, President Florida Pawnbrokers Association josh@gcpawn.com

The Florida Pawnbrokers Association is monitoring three new bills being proposed for 2016: FL SB 360 – Victim Assistance FL HB 641 – Requirements for Licensing for Certain Veterans FL SB 948 – Act relating to Secondhand Dealers We are in membership drive mode for 2016 and are working to establish an active Google group for members. We would like to share information and be proactive about theft rings that often target Florida pawnshops.

STATE NEWS We are also working with Pawnshop Consulting Group (PCG) who is putting on a Symposium this May in Orlando. Active FPA members will receive a $100 discount on registration.

INDIANA Greg Engstrom, President Indiana Pawnbrokers Association gregengstrom@hotmail.com

ILLINOIS Kelly J Swisher, President Illinois Pawnbrokers Association arlingtonloan@gmail.com

If you have not attended an Illinois Pawnbrokers Association (IPA) meeting or read any of the previous articles, the hold time for items purchased in the state of Illinois is now ten (10) days, effective as of the first of the year. You must still hold for longer periods if your local municipality requires you to do so. Most police departments are not aware of the changes that have taken place (Public Act 0990188) and it might be a great opportunity for you to show some goodwill. Give your contact at the police department a call to make them aware of the fact the you are now holding for ten (10) days. We are still working on a few remaining issues with our Pawn Brokers Regulation Act, but as you know, Springfield is moving very slowly due to the budget and pension reform impasse.

Indiana has been a hotbed of political news - from the legislation that was supposed to offer more freedom and ended up being interpreted as a law discriminating against the LGBT population, to being one of the few states with a balanced budget. This session is a short one for legislators and included the ever-turbulent budget, so we expect little to happen that would affect pawnbrokers. There are two topics that the Board of the Indiana Pawnbrokers Association (IPA) is interested in. The first is the “one paragraph” section that disallows loans on handguns; the second is the sales tax exemption on coins and gold/silver bullion. The IPA has had a booth at the Indiana Chiefs of Police Convention (ICPA) for several years. Last January, we asked many of the law enforcement personnel in attendance if they would be for or against allowing handguns to be pledged for a pawn loan. We had a favorable response with a few abstaining until they could think about it. The IPA contacted all board members of the ICPA for their support, but did not get a single reply. Even my own local Chief of Police would not return my call or email. There are many reasons to allow handgun loans: 1. There is a fresh paper trail of all guns. 2. No felon could redeem or buy any gun, even if it was his/hers. 3. Guns would be kept in a secure facility. 4. It makes sense to allow desperate people to pawn a handgun.

SPRING 2016

NATIONAL PAWNBROKERS ASSOCIATION

STATE NEWS We are again gearing up for another Midwest Pawn Convention in Louisville, KY, May 1315, 2016. The NPA Certified Pawn Professional (CPP) program will be offering its Marketing, Advertising, and Public Relations course on Friday, May 13, at the Galt House Hotel for anyone pursuing their CPP designation. For more information about the convention, visit midwestpawnconvention.com.

by stating that they do have the right to subpoena all the books and records, and threatened Notice of Hearings (within the DCA) to issue fines and revocation/suspension of our licenses if operators did not comply by a new deadline (February 1, 2016). They even canceled a scheduled meeting to discuss the issue, hours before it was set to take place, citing they had already stated their position in their response letter, and no meeting was necessary as a result. At the time of this writing, operators (both members and non-members of the state association) are gearing up for further legal action to defend our records. We are preparing to file a motion to quash the subpoenas in the Supreme Court of New York and a restraining order barring the DCA from issuing fines or revoking licenses until the matter is resolved.

NEW YORK Eric Modell, President Collateral Loanbrokers Association of New York eric@modellfinancial.com

As if we havenâ&#x20AC;&#x2122;t had our fair share of issues, the city of New York decided to try an end run around the law that is being successfully challenged in court. (For more information on this, see the article by Mark Kriss on page 58.) As 2015 came to an end, many operators received administrative subpoenas from our licensing agency, the Department of Consumer Affairs (DCA), demanding that we provide every business record that we produced since January 1, 2015, be delivered to their office at a specific time and date in December. In total, 100 subpoenas were issued, and all demanded everyone show up at the same date and time with 11 months of records. Fueled by the legal decision in our favor, operators resisted the subpoena citing its overly burdensome nature and case law that shows the DCA does not have the authority to demand the production of every single business record a licensee makes. The DCA responded to our objections very aggressively

NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

There is a clear and present danger to the pawn industry in New York. Law enforcement and the City Administration have teamed up to assault our industry, but we are banding together to fight them off to protect our rights and the rights of our customers.

OHIO Lou Tansky, President Ohio Pawnbrokers Association lou@unclebenspawnshop.com

By the time you read this, I hope that our associationâ&#x20AC;&#x2122;s proposed changes to the Ohio Pawnbrokers Act will have been introduced in the Senate. The changes we proposed are designed to protect our members and all Ohio pawn licensees from misinterpretation of the Ohio Pawnbrokers

STATE NEWS Act by uninformed prosecutors and law enforcement agencies. Additionally, we have slightly increased some of the rates and fees collected on pawn transactions which will result in an increase in revenue for all pawn licensees. We have also attempted to reduce the hours for continuing education requirements for pawn licensees. Finally, we have cleaned up some language to allow an easier interpretation of the Act by licensees and regulators. Since 2016 is a federal election year, it will be difficult to tell how long it may take for our bill to be voted on and out of committee. We are hopeful it will clear the hurdles of the Senate before the summer. We will keep all members posted as to the progress of the bill and up-to-date on any and all changes. Remember, the current Continuing Education (CE) fulfillment period ends June 30, 2016. This means you must have your CE hours completed by that date.

Please mark your calendars to save the date April 3, 2016. The Ohio Pawnbrokers Association will be holding its annual membership meeting at the Quest Conference Center, 8405 Pulsar Place, Columbus, Ohio 43082. At this meeting, we will be discussing several important issues including: 1. Current Legislative Agenda 2. Relationship issues between members and law enforcement 3. Other legislative issues of importance to pawn licensees We are pleased to announce Ms. Jacqueline Mallett, former counsel with the Division of Financial Institutions and presently of the law firm Bricker & Eckler, will be a special speaker and presenter. Finally, we will have another state-approved continuing education seminar for compliance with your CE requirements for licensing.

MEMBER NEWS (continued from page 54)

National Pawnbrokers Association New Members Michigan

Ohio

Motor City Pawnbrokers • Detroit

The Money Vault • Cincinnati

Motor City Pawnbrokers • Ferndale Motor City Pawnbrokers • Warren Mississippi Choice Pawn, Inc • Fulton USA Pawn & Jewelry • Pearl USA Pawn & Jewelry • Canton USA Pawn & Jewelry • Vicksburg USA Pawn & Jewelry • Jackson (3) North Carolina National Jewelry & Pawn, Inc (2) • Charlotte

INTERNATIONAL PAWNBROKERS Evergreen Traders • Fredericton, NB Canada APPRENTICE PAWNBROKERS Kenny Snowdell • Cadet, MO David Kollar • Goshen, IN INDUSTRY PARTNERS Goldman Diamond Co • Los Angeles, CA. Card Connect • Overland Park, KS

National Jewelry & Pawn, Inc • Hope Mills

SPRING 2016

NATIONAL PAWNBROKERS ASSOCIATION

PAWNDER THIS

WHEN I WAS YOUR AGE

Back in My Day... By Rudy Klancnik

I TRY MY BEST EVERY DAY NOT TO BE “that

guy.” You know who I’m talking about – that guy who’s constantly talking about how great it was back in the day and how kids just don’t understand how good they have it. That guy who yells for the kids to get off his lawn and still wears bowties even though they’ve never been cool. So, no, I’m definitely not that guy. I don’t even own a bowtie and I’m fine with kids playing on my lawn as long as they’re not practicing their short games. But I must admit that the older I get, the more I’m amazed at how many everyday items or functions no longer exist. For instance, when’s the last time you made a call in a phone booth? My kids laugh when I tell them that finding a phone booth when you were running late after a high school party was the most crucial part of the night. Of course, finding enough loose change to make that call was the difference between getting a pass from your parents and losing Atari privileges for the week. SEE IF YOU REMEMBER THESE NOT-SO-GOLDEN OLDIES:

• The VHS – Yes, I still have a couple of boxes of VHS tapes. Some really good stuff, too. Godfather I, II, and III. OK, Godfather III was terrible. Not sure why those boxes still take up space in my attic because they’re completely useless.

NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

• Cursive writing – Other than your signature when signing for your credit card at Chili’s, when is the last time you wrote in cursive? I’m honestly not sure I could even get through the entire alphabet. • Typewriters, fax machines, the Palm Pilot, standalone GPS devices, and a Rolodex are as useful these days as the RMS Titanic. I kept all of mine to sell as antiques someday. • There was a time when you would have to turn to TV Guide to find shows and movies playing that week. Remember that little print magazine that was more important to most Americans than the Bible? • Did you ever carry a portable DVD player or wear a Sony Walkman and think you were “da bomb?” Yeah, you did, go ahead and admit it. You probably also wore parachute pants or Zumbas with your favorite NFL colors. Don’t be embarrassed. It will be okay if you’re truthful with yourself. • Ever help your kids with their homework when they’re studying the Roman Empire? You get up from the table, walk into the den, and pull out your trusty world encyclopedia. You show them everything they need to know about Caesar, the Senate, and the Coliseum. If that’s the case, you’re the last person on the planet to own a set of encyclopedias. Wikipedia or Google is all you need these days. Quicker, lighter, and such a space saver.

PAWNDER THIS • Travel agents, many checkout folks at the grocery store, bank tellers, the guy who recorded for MovieFone, and many, many customer service call centers have all been transformed by technology. I’m officially not arguing that this is a good thing since I miss dealing with human beings in those positions, but it is what it is, and we’d better get used to it. • Is the Spell Check function on our phones and computers going to turn us into a world filled with terrible spellers? I think we’re already there based on emails I receive every day, but I’ll hold out hope that English teachers will have the final say. • How about as a kid playing cops and robbers in the backseat of the family station wagon while Dad roared down the highway? Guilty as charged. I wouldn’t think of not having my kids harnessed in every time we go to the grocery store let alone a cross-country trek. Some things – many

things, honestly – are so much better today than yesterday.

Of course, while examples abound of how much our lives have changed and continue to change at breakneck pace, some things still remain constant. The train, for instance, has been with us since the early 1800s, and still can be seen on a daily basis doing much of the heavy lifting in our economy. The television remains a staple in everyone’s daily diet. The big four sports are still our favorite big four sports. Brent Musburger, Dick Vitale, and Chris Berman still have jobs. And the newspaper maintains its spot in all of our mornings. Oh, wait. Sorry, newspaper. I meant bagels when I said newspapers. Rudy J. Klancnik writes for fun, sells stuff for a living, and cheers for any team playing Ohio State or the Yankees.

RAISE YOUR STANDARDS TO

NEW HEIGHTS

COURSE OFFERINGS INCLUDE: • Store Operations • Marketing, Advertising, and Public Relations • Human Resources • Federal Regulations • Security, Risk, and Crisis Management • Product Knowledge

EARN YOUR CPP DESIGNATION

For more information about the program, visit NationalPawnbrokers.org and click on the CPP tab SUMMER 2015 | NATIONAL PAWNBROKERS ASSOCIATION | 53 SPRING 2016

NATIONAL PAWNBROKERS ASSOCIATION

CALENDAR OF EVENTS

INDEX OF ADVERTISERS

4/2016 NPA LEGISLATIVE CONFERENCE

ADVERTISER Page

3 CLiCk Media

National Association of Watch and Clock Collectors 42

(212) 365-0691 3ClickMedia.com

APRIL 27, 2016 Washington, DC

Aagam Creation LLC (248) 961-0506

Contact Dana Meinecke: Dana@NationalPawnbrokers.org

Bluestone Trading Back Cover (888) 800-BLUE (2583) Bluestone-Trading.com

CPP COURSE: FEDERAL REGULATIONS

Bravo Pawn Systems (888) 407-6287 BravoPawnSystems.com

APRIL 28, 2016 Hamilton Crowne Plaza, Washington, DC

The Buyers (562) 945-7276 TheBuyers.com

Contact Lindsay Wilson: CPP@ NationalPawnbrokers.org

5/2016 CPP COURSE: MARKETING, ADVERTISING, AND PUBLIC RELATIONS

MAY 13, 2016 Galt House Hotel, Louisville, KY

The Galt House Hotel Louisville, KY Contact Ron Stempkowski: 1ipa@ comcast.net

Dillon Gage (888) 436-3489 DillonGage.com

International Gemological Institute Inside Front Cover IGIonline.com

JULY 12-14, 2016 The Mirage Hotel & Casino Las Vegas, NV PawnExpo.com Contact LindsayWilson: Lindsay@ NationalPawnbrokers.org

(212) 354-9800 RapaportAuctions.com 61

(866) 204-7209 CheckConsultants.com 30

(800) 225-2984 Rslc.net

(800) 759-9997 HooverandStrong.com

PAWN EXPO 2016

Rapaport Auctions

Rolland Safe & Lock

Hoover & Strong

(212) 869-0544 PadmavatiExportsinc.com

Hi-Tech Precious Metals & Refinery 55 (866) 950-7528 HiTechPMR.com

7/2016

Padmavati Exports

Data Age (888) 949-7296 PawnMaster.com

Gemological Institute of America 33 (800) 421-7250 GIA.edu

MAY 13-15, 2016

(800) 773-1626 NorthAmericanMetals.com

RMF Consulting Group

Geib Refining (800) 228-4653 GeibRefining.com

25TH ANNUAL MIDWEST PAWNBROKERS CONFERENCE AND CONVENTION

North American Metals 50

CompuPawn 28 (866) 545-9868 CompuPawn.com

Garrett Metal Detectors 56 (800) 527-4011 Garrett.com

Contact: Lindsay Wilson: CPP@NationalPawnbrokers.org

(717) 684-8261 NAWCC.org

Midwest Pawnbrokers Convention 52

Stallcup Group

(817) 479-3880 StallcupGroup.com Stuller, Inc

(800) 877-7777 Stuller.com The Trendz

(866) 337-7464 TheTrendz.biz United Precious Metal Refining Co

(800) 999-3463 UnitedPMR.com Wexler Insurance Agency Inside Back Cover (800) 432-1853 WexlerInsurance.com White Pine Trading (646) 666-7588 WhitePineDiamonds.com

Worldwide Diamond (213) 622-2191 WWDiamond.com

(219) 261-3473 MidwestPawnConvention.org 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.

NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2016

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