National Pawnbroker - Summer 2019 by National Pawnbrokers Association

Pawnbroker National

Official Publication of the National Pawnbrokers Association

SUMMER 2019

PAWN EXPO 2019

Waves of Change

OPEN FOR BUSINESS: LA FAMILIAâ&#x20AC;&#x2122;S HURRICANE EXPERIENCE CHOOSING THE RIGHT REFINER

message from the president

Walk a Mile in Their Shoes

Tim Collier NPA President Tim@Pacerltd.com

AS I REFLECT BACK on my time in the pawn industry, one thing keeps me going and makes me feel good about what we do as pawnbrokers and the small, but important, part we play in our customers’ lives. That one thing is that I’m always true to myself and my commitment to treat all my customers with the dignity and respect they deserve. Sometimes we lose sight of the fact of how difficult it must be to have to come into a pawn store and borrow money. Put yourself in their situation, and you’ll quickly realize how uncomfortable it is to ask someone for help when you have no other alternatives. This fact was brought to my attention a couple of months ago and it made me realize how blessed I am to be in this business. A young lady walked into my store and asked my assistant, “Is the gentleman who makes the loans in?” I heard her from the back, so I walked out from my office and said, “I sure am. What can I do for you?” She asked if I had a few minutes to visit and we sat down at my desk. What happened next brought us both to tears. She introduced herself and said she was an associate pastor at a local church. While she herself had never had to pawn anything in her life, she had actually been in my office years earlier with her mom. Her mom had used my services when this young lady was growing up to get by in the lean times. She would come in and borrow money on a ruby and diamond ring to pay for dance lessons, school trips, prom, etc., for her daughter, but never uttered a word of it to her husband, also a pastor at a local church, who would have been dead set against borrowing money for many of the things mentioned. This young lady went on to tell me a story about the bible study class she leads with a

dozen or so parishioners. The subject was on objects that spark emotion in your life and she challenged all the participants to find some object in their life that stirs emotions, good or bad. It could be a family keepsake or something that was kept to remind them of hard times. She placed the same requirement upon herself and showed me the ring she was left by her mom upon her passing. It was the ruby and diamond ring her mom pawned when she needed that extra cash. She treasures it because of what it meant to her growing up allowing her to participate in so many things that might not have been. Lastly, she shared the story her mom told her about the ring and the fact that the man at the shop where she took it treated her with so much dignity in a very difficult time. She said, “My mom always felt so comfortable leaving her ring, and even though it wasn’t much, it meant the world to her and you made her feel so special by treating her with respect. I just had to come find you and tell you how much I appreciate how you treated my mom and what it means to me now that I’m an adult. I wear this ring every day to remember my mom, so it holds a special place in my heart and I wanted you to know that.” We often forget that we are the last resort for so many people who, for whatever reason, need to borrow money. I would encourage everyone to treat your customers with dignity and respect because without them we would have no business. It doesn’t take any extra time to be nice to your customers and it doesn’t cost anything to treat others like you would want to be treated if you were in their shoes. Trust me when I tell you, if you do these things, it will come back to you in ways you could never imagine and this story illustrates that like no other.

SUMMER 2019

NATIONAL PAWNBROKERS ASSOCIATION

contents Summer 2019

Cover Story Pawn Expo 2019 30 HIGHLIGHTS Open For Business: La Familia’s Hurricane Experience Choosing the Right Refiner

Compliance

AML Course

Government Relations

2019 Conference Recap

Membership

IN THIS ISSUE

Membership Recruiting

Message from the President

Pilot Program

Message from the Executive Director

Notice of Annual

18 40

Business Solutions

NPA Young Professionals Group

New NPA Members

Thank You For Your FBL Support

State Association Updates

Digital Marketing for

Pawn Stores & Pawnbrokers

Otherwise Engaged

Looking Back to Forecast

Membership Meeting

Member Spotlights

How to Grow Your Loan Base

When It’s Time to Phone a Friend

Workers’ Compensation and

Future of Pawn

Employers Liability Compliance

and Risk Transfer

What Does the Future Hold?

Multi-store Owner Profile:

Bob Simpson, El Bufalo Pawn

Austin Buford

NATIONAL PAWNBROKERS ASSOCIATION

Pawnbroker – Mister Money of Greeley Industry Partner – Simplex Diam

Book Corner

Lab-Grown Diamonds –

Young Pawnbroker to Watch –

12 48 46

Pawnder This

Calendar of Events

Advertiser Index

SUMMER 2019

Contributors for this issue of National Pawnbroker David Ashe La Familia Fran Bishop NPA Government Relations Liaison Tim Collier Pacer, Ltd IRS Tax Outreach, Partnership & Education Rudy Klancnik Steve Mack Bravo Pawn Systems Meredith Meuwly Heritage Auctions Emmett Murphy 3 CLiCk Media Randi Nell Big Dog Pawn Katie Reich-Storer Myriam Tashey Professional Gem Sciences Laboratory Gary Wasserman Wexler Insurance Agency, Inc Danielle Yanke Internet Marketing Inc.

message from the executive director

NPA staff

Ride the Waves of Change WITH TODAY’S EVER-CHANGING economic and political climate, it’s imperative that you change with the times to get ahead in the game of success. Our goal for Pawn Expo is to bring you new ideas and products each year that will help you with that very concept. From dynamic keynote speakers to energized education sessions to a bustling trade show, the convention gives you ways to look ahead, anticipate, and prepare for the future. Dana Meinecke This year’s convention will be our last year at The NPA Executive Mirage in Las Vegas July 9-11. Keynote Speaker Director Captain Richard Phillips will share how practice and preparation helped him survive an attack on his ship and crew by Somali pirates. At the General Session, Sally Morrison, Chief Marketing Officer of Lightbox, will present her point of view on the lab-grown space. Other highlights include three pawnbroker peer-to-peer panels giving you the opportunity to hear from some of the best and brightest in the industry. You won’t want to miss: nW omen in Pawn: Attracting Female Customers, led by Beth Anundi, Lynden Miller, and Gina Barkan nB uilding Your Digital Community, led by Seth Gold, Lauren Kaminsky Goldman, and Danielle Yanke nA sk the Experts: Pawnbroker to Pawnbroker, led by David Ashe, Sam Shocket, and Joshua Davis The NPA appreciates all of the sponsors who help support us so we can bring you the highest quality convention that you deserve. For more information and to register, visit NationalPawnbrokers.org and click on the Pawn Expo tab. Last month, 36 pawnbrokers from 16 states attended NPA’s 2019 Legislative Conference in Washington, DC. The event gave attendees the opportunity to meet with many of the new Members of Congress and discuss de-risking and its effect on access to financial services by small businesses. Thank you to Geib Refining for sponsoring this year’s conference. We know summer can be a very busy time for you and we appreciate the time you spend away from your business to take advantage of the learning opportunities available as a benefit of your NPA membership. We hope you enjoy the ride!

Dana Meinecke Executive Director Dana@NationalPawnbrokers.org

Helen Moore Director of Meetings & Events Helen@NationalPawnbrokers.org

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

Brittany McCorkle Member Services Program Coordinator Brittany@NationalPawnbrokers.org

Mailing Address: PO Box 508, Keller, TX 76244

Physical Address: 2920 W Southlake Blvd, Ste 120 Southlake, TX 76092 Phone: (817) 337-8830 Fax: (817) 337-8875 NationalPawnbrokers.org

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 Brittany@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. Expressed opinions are those of the author and do not necessarily reflect the views of ownership. © 2007-2019 National Pawnbrokers Association: PO Box 508, Keller, TX 76244, (817) 337-8830 NationalPawnbrokers.org EDITOR: Margie Swoyer DESIGNED BY: SPARK Publications

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

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government relations

Sean Makovsky, Brittex Financial; Boyd Naylor, Pronto Pawn; and Kerry Rainey, Bayou Pawn & Jewelry discuss the day’s agenda.

2019 NPA Legislative Conference Recap WASHINGTON, DC • APRIL 30-MAY 1, 2019

Fran Bishop NPA Government Relations Liaison NPA Past President fbishopdp1@gmail.com (205) 486-0124

he NPA’s annual Legislative Conference on April 30 - May 1 in Washington, DC recently concluded with NPA member pawnbrokers from Oregon to Maryland and Florida to New York in attendance. Although our group’s numbers were somewhat smaller this year, the enthusiasm for taking the pawn industry message to the 116th Congress 1st Session couldn’t have been larger. With many new Members of Congress

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

this year, it was imperative for attendees to introduce themselves and do some ‘Pawn 101’ educating about the pawn industry and their respective businesses back in the district and state that sent them to Washington. No one can tell your story of the services you provide from your pawn store(s) to consumer customers every day, the jobs for your employees, and support for your families and communities better than you. NPA’s (Continued on Page 8)

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government relations The message we took to the Hill was to make Members of Congress aware of the harmful effects on the small business pawnbroker when banks terminate their relationships and services with little notice and not much explanation.

(From Page 6)

2019 NPA Legislative Conference Recap

Team GRC continually visits, calls, emails, texts, etc. Senators and Representatives, but the value of a constituent’s face that you present by going to the Hill is immeasurable. Again this year, the message we took to the Hill was to make Members of Congress aware of the harmful effects on the small business pawnbroker when banks terminate their relationships and services with little notice and not much explanation. Banks’ discontinuance of pawnbrokers has been going on for more years than I want to count, and NPA’s repeated requests for help from federal bank regulators have not resolved whatever the underlying

cause is. Therefore, for the past couple years, our information sharing and conversations about the effect that banks’ “derisking” has on access to financial services by small businesses… in particular, pawnbrokers…have been directed to your Senators and Representatives in Washington. Recently, we are seeing legislative support, even bi-partisan, for Bank Secrecy Act/Anti-Money Laundering (BSA/AML) reform. So, the scheduling of NPA’s Legislative Conference this year couldn’t have been better. Pawnbrokers personally explaining and, in some

Louisiana pawnbrokers Chad Carter, Chad’s Pawn Shop, and Chase and Kerry Rainey from Bayou Pawn & Jewelry meet with their representative.

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

cases, reminding Hill offices of previous conversations of what happens ‘back home’ when your banking services are terminated was extremely timely. We also related recent reports from NPA pawnbroker members of the spread of “de-risking” to other than basic depository account services – for example, a great number of customers’ debit card transactions being declined by a major bank. Customers are then inconvenienced by having to call or go to their bank and arrange for “clearance” of their transactions or withdraw cash from ATMs

The NPA contingency heads to Capitol Hill.

instead. Thus far, credit card transactions do not appear to be affected. Another pawnbroker saw his “employee general liability policy” premium increase without a history of claims, so his insurance broker put it out for bids to 10 different companies. Eight of those declined to quote because of the “nature of the business, class of business, ineligible class of business”. We related these reports to the Hill also. Upon returning from Washington, I asked you to send us information on any types of discontinuance that you have experienced...regardless of when...or any other occurrences possibly related. Unfortunately for those on the receiving end of this “de-risking”, we received more reports of banks’ terminating deposit accounts, mortgage application refused, decline to offer credit card processing, termination of existing merchant services, refusal to issue business credit cards, and the list continues. All of these instances are compiled at the NPA office, and unfortunately, we need you to please keep this information coming. Team GRC will continue to communicate it to Washington as we keep making noise about the need for solutions to help us maintain the banking services that pawnbrokers need to continue providing non-recourse safety-net transactions to our average American consumer customers.

2019 NPA Legislative Conference Attendees AL Fran Bishop AR Douglas Braswell Tim Collier FL David Ashe GA Ben Levinson IL Robert McCullough Gregory McCullough Bryce Walter IN Ric Barr Wendy Barr KS Bruce Harris Macaela Harris LA Chad Carter Chase Rainey Kerry Rainey MA Edward Bean Michael Goldstein Marc Gundersheim

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MD Jessica Barakat Michael Cohen MS Dallas Allgood NC Bill Dawson Brian Moulton Johnny Whiteside Tara Whiteside NV Michael Mack NY David Kaminsky Lauren Kaminsky Goldman OR Adam Anundi Beth Anundi TX Sean Makovsky Boyd Naylor Beverly Nuckols Larry Nuckols UT Chris Bloxham Dawn Bloxham Randi Nell

NATIONAL PAWNBROKERS ASSOCIATION

young pawnbroker to watch

Austin Buford Store Manager, Big Brothers Pawn #3, Bentonville, AR Years in the pawn industry: 7 (3 in management) How I got started in the pawn industry: My grandfather [Stan Thomas] opened Big Brothers Pawn in 1990 in Springdale, AR. He recruited me in 1997 after my nagging efforts to be in the shop as often as possible. I began my career at 6 years old sorting the USA sockets from the Taiwan sockets. The best advice I ever received: “Take care of the pennies and the dollars will take care of themselves,” from my grandfather Greatest accomplishments in my pawn career so far: My store has been awarded the “Pawn Shop of the Year” for outperforming the other 3 stores in our 4-store operation in 2017 and 2018. My media mix: n Musical artists – Hank Williams, Jr, Johnny

Cash, Chris Stapleton n Social media – Facebook, Instagram n TV shows – Power, Ozark, American

Horror Story The last book I read was: “Never Lose A Customer Again” by Joey Coleman My role model is: My grandfather, Stan Thomas NPA members would be surprised to learn that I: Have had four frightening near-death experiences When I’m not at work, I enjoy: Hunting, fishing, spending time with my beautiful wife and rambunctious 2-year-old baby boy If I wasn’t a pawnbroker, I’d be: Enjoying the outdoors working residential remodel construction

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NATIONAL PAWNBROKERS ASSOCIATION

pawnbroker spotlight

Mister Money LOOKING FOR PAWN IN ALL THE RIGHT PLACES

IN 2008, Steve Adsit bought the Mister Money store in Greeley, CO, where he’d been working as the manager. The store, in business now for 23 years, employs 14 people, including Steve. Even though he is the owner with a manager and assistants to do the bulk of the day-to-day operations, Steve still loves working the pawn counter. National Pawnbroker (NP): How did you get into the pawn industry? Steve Adsit (SA): It was a random chance. At age 21, I was looking for a new line of work and answered a newspaper ad for a pawnbroker. They interviewed and hired me right then - my first time in a pawn shop! After a couple of years, I became manager and eventually purchased the business. I love the variety of people you get to interact with, the huge amount of information you need to learn and know, and especially that everything is always changing – never stagnant or boring. NP: What’s the toughest challenge you face as

a pawnbroker? 12

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

Steve Adsit, Mister Money of Greeley, CO

SA: Loss of wealth. People are choosing to spend money on things that have no tangible value. If nothing holds value, we have nothing to loan on. It’s a struggle to adapt and find things to loan on. We have to “find the value”, and it’s getting harder and harder to find it. NP: What is the best advice you ever received? SA: The best advice is not given verbally, but through

modeling. We learn from watching others. I’ve been lucky to have been influenced by a lot of happy and successful people. Michael Scott once said, “Don’t be an idiot.” I try to keep that advice at the top of my mind. NP: What do you look for when hiring a new employee?

“We have to ‘find the value’, and it’s getting harder and harder to find it.”

SA: Trust and honesty first, then enthusiasm. If they

have enthusiasm, we can train all the rest of the skills. NP: How does your company give back to the community? SA: We are big on “old school” community involvement. We sponsor softball, volleyball, and soccer teams, demolition derby cars, golf tournaments, charity events, and community parties. We have a really cool city and it’s fun to be locally involved in any way we can. NP: What is the oddest or funniest item that has

been pawned in your store? SA: Our motto is “Find a Way to Say YES”, so we end up with some strange things: 20’ taxidermy python,

collection of high-end erotic statues, glass eye collection, prosthetic legs, a fire truck, and a military chemical warfare decontamination unit. NP: What would you be if you weren’t

a pawnbroker? SA: Who knows? If you had asked me 20 years ago if I thought I would ever be a pawnbroker, I would have asked, “What’s a pawnbroker?” I just try to make calculated decisions when an opportunity shows up, then go with the flow and have fun! NP: Why are you a member of NPA? SA: Because I can’t do any of this by myself. None of us

can. We need the team!

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NATIONAL PAWNBROKERS ASSOCIATION

pawn expo presenter

Digital Marketing for Pawn Stores & Pawnbrokers I TIPS & TRICKS FOR

DIGITAL MARKETING IN THE PAWN INDUSTRY By Danielle Yanke

n the agency world, it’s not uncommon to find yourself creating marketing strategies for products or services you never would have predicted. Personally, my career has been built on putting “heads in beds” for the hospitality industry, but as an Account Director at my agency IMI, other clients have come down the line looking to find unique digital ways of improving their bottom-line business and awareness. Through this, I have learned that it ultimately doesn’t matter what you’re trying to sell. All that matters is getting your ad in front of the right person, at the right time, with the right content. Then, tracking it accurately to know what worked vs what didn’t, and being flexible from that point onward.

NATIONAL PAWNBROKERS ASSOCIATION

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My hopes for speaking on the upcoming panel “Building Your Digital Community” at Pawn Expo 2019 here in fabulous Las Vegas, is to shed some light on that digital advertising world. There are a few key strategies that any pawn store owner can think about utilizing to expand their reach and sales, from a $0 budget to any level of spend you may have available.

LET PEOPLE FIND YOUR STORE EASILY

This one is both easy and free! Store owners should be utilizing Google My Business and all its tools. When you keep your business’ contact information up-to-date, Google search results will be showing quick and easy actions for your potential customers: Call your

store, get Driving Directions, and Visit Website. If you haven’t yet claimed your business with Google, it’s as easy as Googling your shop and seeing what appears on the right-hand side, and clicking “Claim This Business” to begin the process. Let the power of our digital overlords (a.k.a. Google) do the work for you and send the right people to your brick and mortar storefront, website, or both. IF YOU SELL ITEMS ONLINE, DO IT RIGHT

For those that do have online interfaces for selling your goods, there are a myriad of platforms that can be utilized and all with varying degrees of styles, merchandise display tactics, and analytics. Your website should be viewed as the digital representation of your actual store, and will require just as much attention to detail in maintaining it. Depending on your inventory, you likely don’t need to put every single item online, but choosing a select few will allow you to showcase the more interesting pieces and generate interest. Take good photos of your items as well! It would be worth setting up a small photo-shoot area with bright lighting and a neutral tabletop/background to take your website photos on. Nowadays it’s easy to find “shooting tables” on Amazon for around $50, and this will create a polished, professional, and consistent look for featuring your items online. (For the ones that fit on a tabletop, at least!) As for the actual purchasing process – have you attempted to buy something yourself from your website? Test it out and make sure it’s not a pain to give your store money online. Is it mobile-friendly, or do you have to zoom in 100X to

Danielle Yanke is an Account Director for IMI in Las Vegas.

read any descriptions and pricing? Is entering your credit card details easy, or are your dropdowns way too long? All these can play into a customer’s decision to abandon the purchase altogether, which we want to avoid.

around your competitors and serve all their customers your banner ads for your (much cooler) pawn store and its (way more interesting) items for sale. A FINAL THOUGHT

TAKE A LOOK AT THE COMPETITION

If you’ve got some budget to use for advertising, and a whole lot of spite and marketing cunning, go for some competitor conquesting! This means showing ads for your business to people researching (or physically inside of) your competitors. On paid search (Google and Bing), you can bid on your competition’s name as a keyword to target; you just can’t include their trademarked names in your actual search ad copy. You may pay a higher costper-click and have a lower quality score because your shop’s website is technically unrelated to the keyword, but it’s probably worth it if you sway a non-loyal customer over to your store to win them over in person. For display marketing (those banner ads you see everywhere), you can utilize geo-fencing tactics to mark a latitude-longitude coordinate SUMMER 2019

Although I’m coming to Pawn Expo 2019 as a total pawn-newbie, what I do know is how to navigate the online world of buying, selling, and building a community online. I’m excited to discuss all these tactics and so many more with my fellow panelists Seth Gold and Lauren Kaminsky Goldman in July. When you attend, please be sure to raise your hands and ask questions as I’ll be just as curious to hear from all the attendees and what challenges you face online!

Originally hailing from Chicago, Danielle Yanke is an Account Director out of IMI’s Las Vegas office, where she leads digital strategies for the agency’s top hospitality clientele. If you’re a company that’s looking to make an impression online, or just trying to navigate the ever-changing waters, give her a shout at danielle.yanke@imi.biz.

NATIONAL PAWNBROKERS ASSOCIATION

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membership

NPA 2019 Membership Anniversaries The following members have reached milestone anniversaries with their NPA membership. They have supported the association and its mission for the past 30, 25, 20, and 10 years. We thank you for your contributions to the association and the pawn industry. 30 YEARS Dave Adelman (NPA Past President) Americash Jewelers, Inc Big Rock Trading Post, Inc Crown Jewelers & Pawnbrokers Inc Dad’s Super Pawn Fay Furniture, Inc Gold Rush Pawnbrokers, Inc H & B Jewelry & Loan Co Nathan’s Lynnhaven Pawn Shop Northwestern Loan Company Palace Jewelry & Loan Co, Inc Paradise Pawnbrokers Silver Dollar Exchange, Inc Simon & Simon Jewelry & Loan, Inc Bob & Jo Stogner (NPA Past President) The Collateral Lender: Van Nuys Will Jewelry and Loan

Atlanta, GA Westmont, IL Fruitland, NM Ormond Beach, FL Gulfport, MS East Saint Louis, IL Danville, IL Portland, OR Virginia Beach, VA Baltimore, MD Reno, NV Bronx, NY Meridian, MS National City, CA Lumberton, NC Van Nuys, CA South Charleston, WV

25 YEARS A-OK Enterprises, LLC Big B Inc Bill’s Pawn Shop LLC Brothers Collateral Loans Capital Pawn Shop, Inc Cash Exchange Pawnshop Castle Pawn Shop Crown Pawnbrokers, Inc Don’s Pawn Shop, Inc Downtown Pawn Shop Easton Loan Co Instant Money Pawn Jack’s Pawn & Gun Kohn’s Loan Co Lightning Pawn Enterprise Mid-States Recycling & Refining, Inc* Mission Pawn Mister Money of Greeley #35 Money Mizer of Columbus Ozark Trading Post Ram Z’s Emporium Sam Light Loan & Mercantile Co Sam’s Loan & Emporium, Inc St Louis Jewelry & Loan Ted’s Pawn Shop The Cedar Post Pawn Shop Union City Pawn & Jewelry USA Loans Wellston Loan and Mercantile Worldwide Pawn

Wichita, KS Springdale, AR El Dorado, AR Los Angeles, CA Harrison, AR Chicago, IL New Castle, IN Washington, DC Dayton, OH Augusta, GA Saint Louis, MO Fayetteville, AR Dalton, GA Lima, OH Branson, MO Des Plaines, IL Mission, KS Greeley, CO Columbus, GA South Bend, IN Lafayette, IN Saint Louis, MO Akron, OH Saint Louis, MO Norwood, OH Saint George, UT Union City, GA Little Rock, AR Saint Louis, MO Mishawaka, IN

20 YEARS B J’s Jewelry & Loan IV Best Deal Pawn and Gun Big Brother’s Pawn #3 Big Buffalo Pawn Shop LLC Family 1st Pawn Gold-N-Pawn Humboldt Pawn Indiana Loan Co Jessup’s of New Smyrna Loan U.S.A.

Gretna, LA Columbia, SC Bentonville, AR Delta, OH Republic, MO Weatherford, TX Eureka, CA Fort Wayne, IN New Smyrna Beach, FL Springfield, MA

Mister Money of Appleton #57 Money and More of Iowa City Mountain Man Pawn Newnan Plaza Shop & Pawn The Pawn Shop Van’s Pawn Mart

Appleton, WI Iowa City, IA Fayetteville, AR Newnan, GA Sulphur Springs, TX Macon, GA

10 YEARS 3 CLiCk Media* 51 Pawn & Gun, LLC America’s Super Pawn #2 Associated Buyers LLC Autopawn of Daytona Bell Pawn Best Collateral, Inc Big Brother’s Pawn #2 Carl’s Pawn Shop D.C. Pawn Digital World Empire Loan Empire Loan Gold N’ Pawn Hemet Pawn Herman’s Pawn Shop Hickory Pawn & Gun Hilo Loan Shop Inc J and L Cash Depot M & M Pawnshop Corp Max Pawn McPike Pawn Modell Collateral Loans #8 Money Mart Pawn & Jewelry #17 Money Mart Pawn & Jewelry #18 Money Mizer of Dothan Money To Go Mr. Pawn Boulder City Mr. Pawn Mesquite Naperville Jewelry & Coin Exchange, Inc Naranja Trading Post & Pawn South Pawn Max 3 Pawn USA & Audio Pawn USA & Audio Platinum Jewelry & Loan Pronto Pawn #1 Pronto Pawn #3 Pronto Pawn #4 Provident Jewelry & Loan #2 Quik Pawn Southern Cash & Pawn, Inc Stallcup Group, Inc* Taylor Pawn The Castle The Castle The Castle The Castle The Hock Shop Toppenish Pawn & Trade Tom’s Pawn Central Treasure Coast Jewelers & Music Watch Certification Services of America* * Industry Partner Member

SUMMER 2019

New York, NY Bogue Chitto, MS Sarasota, FL Roseburg, OR Daytona Beach, FL Belton, TX San Mateo, CA Rogers, AR Parkersburg, WV Minden, LA Fredericton, NB, Canada Providence, RI Worcester, MA Norwalk, CA Hemet, CA Collinsville, IL Hickory, NC Hilo, HI White Oak, TX Houston, TX Las Vegas, NV Taylor, MO Richmond Hill, NY Pearland, TX Houston, TX Dothan, AL Maryville, TN Boulder City, NV Mesquite, NV Naperville, IL Naranja, FL Tampa, FL Bentonville, AR Rogers, AR Lancaster, CA San Antonio, TX San Antonio, TX San Antonio, TX Fort Myers, FL Texas City, TX McComb, MS Keller, TX Taylor, TX Hazard, KY Lexington, KY Mount Sterling, KY Somerset, KY Port Huron, MI Toppenish, WA Swainsboro, GA Vero Beach, FL West Palm Beach, FL

NATIONAL PAWNBROKERS ASSOCIATION

membership

NPA Visits North Carolina Pawnbrokers In Tim Collier’s “Message from the President” column in the Spring 2019 issue, he mentioned that one of the NPA’s strategic goals is to develop a pilot program in which Board members and members-atlarge visit with potential members in a selected state to share information about the association and the benefits of joining. The first test run of this new program was conducted in North Carolina in March of this year. Following is a recap of those visits.

Tim Collier/ Johnny Whiteside WILMINGTON, NC

Tim and Johnny started their North Carolina store visits in Wilmington. First stop was at Pawn USA where they met with Janet Monterose, one of the partners. Pawn USA has six stores in the area. The second stop was at Pawn South which has 10 locations. JACKSONVILLE, NC

After leaving Wilmington, the team headed to Jacksonville. Their first stop was Cash Point Pawn where they spoke with owner, Ernie Gurganus, a former member. Next stop was ParkN-Pawn. Chris Heath, the owner, 18

NATIONAL PAWNBROKERS ASSOCIATION

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was down the street at Heath’s Pawn, a beautiful new store that was recently rebuilt due to a fire. Chris owns both locations with his uncle, Harold Heath. Tim and Johnny then visited Woodson Jewelry, Music & Pawn, a current member. Robert Gasperson, Sr, the owner, gave a tour of the store. His wife, Susan, attended Pawn Expo last year. GREENVILLE, NC

The next city on the agenda was Greenville. Tim and Johnny visited Jolly’s Pawn and met the store’s new owner, Mark Forster. They then headed over to Doc’s Pawn & Gun which had been a member for 22 years until 2016. The last stop was at Village Pawn, where they

met owner, Brandon Craft. Village Pawn is a 25-year member and has a very upscale store on a busy corner location. GOLDSBORO, NC

In Goldsboro, Tim and Johnny met with Swop Shop owner, Johnnie Carr, a 23-year NPA member, and his gun assistant, Johnnie Bryant. Next, they met with James Smith, owner of Boulevard Pawn – a 25year member. James has six stores in the area. SMITHFIELD, NC

Smithfield was the next city. There, they visited with Zodiac Pawn’s owner, Jim Lassiter, who shared stories about his store’s history and operations.

FAYETTEVILLE, NC

After leaving Zodiac Pawn, the team headed to Rhudy’s Pawn in Fayetteville where they met owner Kenneth Phillips and John Curley, part of the jewelry sales team. Rhudy’s Pawn has a very large operation in a great location that is based around a jewelry store, audio store, and gun operation. They have been members for 27 years. Next up was Parker Pawn where owner Melanie Keefe, and her district manager, Ashley Haney, showed their new location and building. Melanie has four locations and is part of the Pawn Leaders Mastermind Group. Fayetteville’s next stop was Jim’s Gun Jobbery, a former member with three locations, where they met with general manager Trey

Pugh. From there they pulled Ron Ruple off the lawnmower on his day off from Bragg Pawn Shop, a former 11-year member from 2007. Jery’s Pawn, a current NPA member, was the next stop. Jery said 30% of his pawns are MLA and he welcomes all military. After leaving Jery’s, Tim and Johnny headed to Cross Creek Pawn where they met with James Cimaglia, the manager. He showed them the store and said anybody who isn’t a member of NPA doesn’t know what they’re missing. The last two stops on the schedule were Boulevard Pawn and Military Pawn, which are within two blocks of each other. Clyde Webb is the owner of Boulevard Pawn; Wayne Harris is the owner of Military Pawn.

Boyd Naylor/ Alan Sheppard GASTONIA, NC

Boyd and Alan visited 18 stores in the Greater Charlotte area over a two-day span. In Gastonia, their first stop was at Bobby’s Pawn Shop where they spoke with owner Troy Messick. Next stops were at Bill’s Pawn, Sam’s Pawn (soon to be closing), and National Pawn (one of Bob Moulton’s stores). LAKE NORMAN, NC

From Gastonia, the team headed to Lake Norman where they visited Lake Norman Pawn. Then it was on to Kannapolis where they stopped at Discount Jewelry and Pawn, Reid’s Pawn Shop, Jewelry Tim Collier, NPA President, with Jim Lassiter, owner of Zodiac Pawn, Smithfield, NC

SUMMER 2019

(Continued on Page 21)

NATIONAL PAWNBROKERS ASSOCIATION

23 More Stores Sold! Stallcup Group facilitates the sale of 4 separate companies in Texas and Ohio!

January – April, 2019: Stallcup Group, Inc., an Exit Strategy Consulting firm, announced its successful facilitation of the sale of Fiesta Pawn, Action Pawn - Austin, Uncle Sam’s Pawn Shop, and Uncle Ben’s Pawn Shop. All are independentlyowned business that comprised of 23 pawn shops located in Texas and Ohio. Stallcup Group served as the exclusive financial advisor to the sellers in these highly successful transactions.

Stallcup Group’s thorough analyses of the sellers’ financial data, and the unique attributes and characteristics of both the company and individual stores helped ensure their client achieved all of their selling goals. Here is what other clients of Stallcup Group have to say about their successes: “Stallcup Group’s dedication to the sale of my company resulted in a 12%-15% higher closing price than the initial offer letters from various buyers. To my surprise there were multiple facets of negotiations above and beyond the final purchase price that the Stallcup Group handled with expertise. These results were tangible and financially beneficial. There is no doubt the results would not have been nearly as profitable without Stallcup Group.” – Mike Fisher, Regent Jewelry & Loan, 4 stores in TX “Ultimately, I was most impressed with Stallcup Group’s financial modeling, which is extremely sophisticated, and their ability to package information in a way that buyers want to see.” – Craig McCall, 12 stores AZ/NV

Why Stallcup Group? We have more than 32 years of experience in the pawn shop industry and have closed over $230M in transactions since founding the business in 2009. We are the leader in Exit Strategy Consulting, and solely represent pawn shop owners. All Stallcup Group’s clients have realized a purchase price increase of 10-50% from initial offer to final closing price. 20

NATIONAL PAWNBROKERS ASSOCIATION

SPRING 2019

Steve Stallcup

steve@stallcupgroup.com

817.479.3880

STALLCUPGROUP.COM

membership (From Page 19)

NPA Visits North Carolina Pawnbrokers

& Loan Co, Inc., and Kwick Cash Pawn and Jewelry. At Lincolnton Pawn, they met with owner Anthony Morrison, a current NPA member. Next, they went to Boger City Pawn where they met owner Harold Fulbright. CONCORD, NC

The next city on the schedule was Concord and the first visit was at Hal’s Pawn and Gun. The owner’s daughter was happy to see the “Women in Pawn” article in the Winter 2018 issue of National Pawnbroker and will be spending some time with Tonia Sheppard in Asheville. At Concord Jewelry & Pawn, Boyd and Alan met with owner

Lane Jarvis. He made plans to spend some time with Alan Sheppard at his store. Next stop was at Kwick Cash Pawn, a former member. At Ian’s Pawn, the owner said he is closing his store when his lease expires. City Pawn was the last stop in Concord. HICKORY, NC

Hickory, NC was the last city on the schedule where Boyd and Alan visited two stores: Hickory Pawn & Gun and FPS Pawn Shop.

Bill Dawson/ Lauren Kaminsky

Loan & Jewelry owned by Alan Horwitz. Since Bill and Lauren’s visit, Alan and his store have joined NPA. WILSON, NC

Next, they stopped in Wilson where they met with Phillip and Rachel Jordan at Pioneer Jewelry Music & Pawn. Phil also gave Bill and Lauren a tip about a great local restaurant – Parkers. They tried it and Lauren can attest that it was indeed delicious. ZEBULON, NC

Bill and Lauren visited several stores in the Raleigh-Durham area. One of those was Reliable

Another stop was Zebulon Pawn Shop in Zebulon where they met owner Jim Slaughter. Unfortunately, Jim shared that he is selling his store.

NATIONAL PAWNBROKERS ASSOCIATION

RALEIGH-DURHAM, NC

SUMMER 2019

business solutions

Otherwise Engaged By Katie Reich-Storer

iamonds have long reigned supreme in the bridal market, symbolizing a couple’s ultimate commitment. But in recent years, the classic solitaire has given way to more daring designs in terms of cut, style, shape, and color. We look at the trends making their way to the forefront of the bridal market in 2019.

FANCY-SHAPE

Classic yet classy, round-cut diamonds have always been the goto stones for an engagement ring. But oval-shaped center stones and solitaires are now in vogue, in part influenced by celebrity endorsements from stars including Serena Williams, Ashley Greene, and Kirsten Dunst. In an industry where size does matter, ovals have the advantage of seeming larger than square or roundcut diamonds of the same weight. Their flattering, elongated style that can make fingers look longer also contributes to the cut’s growing popularity. And oval stones are not the only fancies that are becoming fashionable. Pear, princess, and cushion shapes are also in demand. THREE IN A ROW

When the UK’s Prince Harry and U.S. actress Meghan Markle announced their plans to marry in 2017, all eyes were on her stunning engagement ring — a center cushioncut stone flanked by diamonds. The trilogy style is thought to represent a couple’s past, present, and future, but it’s not just this romantic notion that makes it a popular choice. Its versatility means you can combine stones of any shape and color, making it a great option for anyone wanting to customize a ring. ROSE GOLD

From smartphones to home accessories, rose gold is definitely having a moment. It’s also becoming a firm favorite among brides looking for an alternative to platinum or white gold. Adding to its allure, many of the Hollywood elite, such as Blake Lively, Alison Brie, and Lauren Conrad, have 22

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

been seen wearing rose gold, and it’s big on Instagram and Pinterest. HALOS

For those in the market for maximum impact, halos, which look bigger than the simpler solitaire, have the edge. This year, designers are taking the trend up a notch by setting even larger diamonds in the halo, according to Josette Patterson of California-based Mark Patterson Design. Halo designs are becoming more adventurous, too, with more artistic shapes appealing to those seeking a more intricate look. STACKED

Showing no signs of abating, the stacked-jewelry trend has now reached the bridal market. Fashion-conscious brides are being spotted sporting multiple wedding bands. The look can be formal, incorporating dainty diamonds and matching bands, or more contemporary, with a mix of metals and stone shapes. Designers are also adapting engagement rings to include double bands so they appear stacked.

CUSTOMIZATION

Another driver in the bridal market is the desire for a unique piece. Not content with selecting a ring from stock, brides-to-be are looking for a point of difference in the size, shape, or style. Tamara Toms, a certified gemologist appraiser and general manager of Carreras Jewelers in Richmond, VA, has seen this trend toward customization firsthand. “Almost all of our bridal is custom of some kind. Usually, they want to change something — metal color, head size, or even subtracting side stones or adding side stones.” Her store also does a fair amount of designing from scratch using clients’ family stones. It either handcrafts the setting or uses computer-aided design (CAD) before casting. For Jennifer Gandia, owner of Greenwich St. Jewelers in New York, made-to-order jewelry is bigger than ever. “Our custom business, meaning true custom, is up 25 percent this year, but we also do personalization [of existing designs], and the majority is still personalized.” GOING DIGITAL

LAB-GROWN DIAMONDS

It’s hard to ignore the increasing popularity of lab-grown diamonds. Alongside higher demand from millennials looking for affordable engagement rings, has come a growing acceptance. As a result, more retailers will be pushed into getting in on the act. “If retailers see that they’re losing business to stores selling lab-grown, they’re going to sell what they have to sell,” says Liz Chatelain, owner of Texas-based consumerresearch firm MVI Marketing. “And when a retailer has lab-grown stones, the conversion rate for millennials is about 70 percent. The reason is that customers can get a bigger look for less money, and millennials don’t have a problem with lab-grown at all.”

Whether it’s by adding an online store to a brick-and-mortar business or by building a community online, retailers need to incorporate the digital world into their future. With the purchasing power in the hands of millennials, if jewelers want to capture their attention, they must join in the digital conversation. This doesn’t have to be at the expense of a hands-on customer experience, but rather a means of driving customers into a store and building relationships with them. Gandia, whose store has been online since 2006 and e-commerce-ready since 2009, is a strong proponent of mixing digital with brick-and-mortar. “You have to be where [the customers] are, which is online and on social SUMMER 2019

media,” she notes. “You need to hire consultants and marketing agencies and in-house webmasters. And if you don’t, it’ll be curtains, and that’s what happening to a lot of us.” COLORED GEMSTONES

Colored gems are an important niche market, especially for brides who are searching for something different or for a ring that will look fantastic without breaking the bank. Blue sapphires, said to symbolize faithfulness and good luck, can create a stunning engagement ring when teamed with smaller diamonds. For those with a smaller budget, aquamarine and morganite make eye-catching center stones. Complementary diamonds will give the ring that extra sparkle. SOLITAIRES

With all the options available in the bridal market, one surprising trend is the resurgence of the solitaire. For some, the clean, simple lines of a solitaire diamond ring can’t be beaten. It’s a style that continues to see rising demand even in fashion-forward cities such as New York. “For some people, so much turmoil happening in our world makes them not want to take risks on big investments,” Gandia reflects. “Maybe with an engagement ring, [choosing a simple solitaire is] about feeling safe.”

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. The Group supports over 20,000 clients in 121 countries and has offices in New York, Las Vegas, Antwerp, Ramat Gan, Mumbai, Surat, Dubai, and Hong Kong. Additional information is available at www.Diamonds.net.

NATIONAL PAWNBROKERS ASSOCIATION

Dear members of the National Pawnbrokers Association, Your business deserves an insurance company that offers more than just a policy to manage risks. Jewelers Mutual Insurance Group’s commitment to protecting every business that sells jewelry has expanded to exclusive programs designed to help our policyholders grow, too. We want to extend our benefits to the pawn industry as well, because after all, what business isn’t looking to get ahead in today’s competitive environment? Plus, to cover the unique risks that pawnbrokers face, we’ve collaborated with other companies to enhance our insurance offering so you can have the best of both worlds — comprehensive insurance coverage and opportunities to improve your bottom line. Visit Booth 306 at the NPA Expo to experience our consultative approach to learning about your business. If you’re not attending, you can learn more at JewelersMutual.com/Pawn, or contact us at pawn@jminsure.com or 800-336-5642, ext. 2118 for a free risk assessment and quote.

Sincerely,

John Fierst

Vice President, Commercial Lines Jewelers Mutual Insurance Group

P R O U D LY S U P P O R T I N G T H E N A T I O N A L PA W N B R O K E R S A S S O C I A T I O N

800-336-5642, ext. 2118 | JewelersMutual.com/Pawn | pawn@jminsure.com

business solutions

Looking Back to Forecast Future of Pawn by Emmett Murphy, 3 CLiCk Media

Have you ever wondered how the pawn industry is faring nationwide? Are pawnbrokers making more or less loans? What are pawnbrokers doing to make more money and expand their businesses? The NPA Trend Survey provides insight into these questions and more. The association conducts the trend survey annually by surveying members with questions relating to notable business trends, retail practices, marketing tactics, and forecasting. The survey has been conducted since 2013 to compile long range trends and their potential implications. These results are distilled and shared with journalists, lawmakers, and the industry at large, to provide a recent snapshot of the state of the pawn community and where it may be heading. The most recent Trend Survey, which was conducted in spring 2019, focuses on pawn industry trends for the 2018 calendar year. Captured in this survey was a notable result which indicated that 52 percent of pawnbrokers surveyed cited growth in their retail sales in 2018 as compared to the previous year. This trend of growth, of up to 25 percent, has been partially driven by pawnbrokers embracing online sales options. “American consumers

are becoming accustomed to buying online, and this shift has moved pawnbrokers to adapt their brick and mortar retail model. Pawnbrokers are utilizing more online sales platforms, as well as engaging customers via social media as an advertising option,” said Tim Collier, pawnbroker and NPA President. Pawnbrokers report that online sales either increased or stayed the same in 2018. Almost three quarters of the pawnbrokers surveyed use eBay to sell online. Other websites reportedly used for online sales are Craigslist, Buya, and OfferUp. 85 percent of pawnbrokers operate a website and report using social media for marketing – including Instagram, Twitter, and YouTube – with over 80 percent of pawnbrokers using Facebook. 19 percent of pawnbrokers surveyed don’t engage in online sales at all. SUMMER 2019

While pawn stores show growth in their retail sales, the number of pawn loans are reported to be on the decline. Non-recourse collateral loans are a primary service that pawnbrokers offer to customers who don’t have access to traditional banking services and credit. However, nearly 40 percent of NPA members surveyed reported a decrease in loans being made to customers. Mr. Collier added, “The decrease may be attributed to loan-seekers not owning items with intrinsic value, such as gold jewelry, which makes for solid collateral when obtaining a pawn loan. Consumers either sold their valuable gold jewelry at the height of the cashfor-gold era or simply don’t possess items with a solid resale value.” This downward shift has steadily continued over the last six years. Over 83 percent of pawnbrokers report pawn loans as their most common transaction. A typical pawn loan is $150 with 80 percent of loans being redeemed within 30 days or less. When surveyed year over year, however, pawnbrokers remain optimistic, as most predict that all business will continue to grow in 2019. The NPA Trend Survey needs your continued support in order to provide these types of insights. Only about 20 minutes are required to complete the survey’s list of questions. This is your opportunity to share your input and help the pawnbroking community understand where the industry is heading.

NATIONAL PAWNBROKERS ASSOCIATION

business solutions

Choosing the Right Refiner TOP QUESTIONS REFINERS THINK YOU SHOULD ASK

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

If you take buy or loan on jewelry, working with a refiner is an important part of your operation. The refining company you work with must be both dependable and trustworthy, and selecting the right one can make a big impact on your bottom line. The more information you have, the better your partnership will withstand the ups and downs of the market. We asked several NPA Industry Partner member companies that provide refining services what questions pawnbrokers should ask when selecting a refiner.

Mid-States Recycling & Refining Jack Brown Midstatesrecycling.com

Would you allow us to visit and tour your facility as well as personally witness the melting and sampling of our material? There are several companies that refer to themselves as refiners, but actually do not have any capability to actually process your material and provide a proper assay (analysis of the material). By touring the facility, you can determine what that company’s actual capabilities really are. Additionally, any refiner that is not willing to allow you the opportunity to witness the processing and sampling of your material is not providing you with the level of transparency you should demand from your refiner. Will you allow us to lock in the price of gold or silver before we ship our material and can we get a partial advance payment once it’s been received? In recent years, we’ve noticed more pawnbrokers running into short-term cash flow problems that require them to ship their gold and silver scrap more frequently and in smaller quantities. To provide advance funding the day the metal is received, the refiner needs the assurance that the pawnbroker has executed a verbal contract to sell the refiner a given quantity of gold, silver, platinum, etc. This is done through the pre-lock of the metal price. For the benefit of the pawnbroker, it establishes the market price their payment will be based off of without any risk of adverse market fluctuations after the metal has been processed and assayed.

Will you provide me with a physical sample from the melt (if requested), and will the final settlement report provide all data from the refining lot, including both before and after-melt weights in addition to the assay and details of all metal pricing and processing charges? A complete settlement report documenting all of the relevant information about the refining lot is the only way a pawnbroker can track and monitor important details about their final recovery. The assay is only one small piece of the overall puzzle. The before and after-melt weight is equally as important, as it allows the pawnbroker to track the history of the melt loss percentage (burn off of lower value base metals in the alloy). Often, when a yield appears to be lower than expected, it is not a factor of the assay itself, but an excessive melt loss that is not being reported by a refiner. How long have you been in business and what is the background and technical training of your key employees and technicians? These questions get right to the heart of the credibility of the refiner. There are several operators who jumped into the refining business during the 2010-2013 “cash for gold” boom who had no background or technical training in the precious metal industry. Several new operators are actually owned by disenchanted sales persons with no technical training whatsoever that were employed by several of these “fly-by-night” refiners just to make a quick buck, and did so through highly unethical business practices.

SUMMER 2019

NATIONAL PAWNBROKERS ASSOCIATION

business solutions How can the “other refiner” offer us free shipping, free diamond recovery service, and higher percentage payment on our material with no assay or processing charges than you’re able to? They can’t and still make a profit. Whenever you come across a refiner that is offering you a deal that seems too good to be true - it is. Take the time to do the math and determine for yourself if what is being offered seems reasonable and enables the refiner the ability to make a profit based on the deal they’re offering. Fortunately, most pawnbrokers that fall for these pitches only make the mistake one time.

Plasma Optical Emission Spectrometry. This unit provides superb resolution, stability, and detection limits for reliable results. It also provides a wide variety of optional features that are guaranteed to enhance the capabilities of their organic analysis within their lab. Without sophisticated metallurgical testing equipment, you are probably speaking to someone with a furnace and little else to determine the true value of what you are intending to send in for refining. The refining business requires extensive and sophisticated testing equipment that costs a lot and takes training to use. While a fire assay is a standard in the industry to determine gold and silver, it cannot do anything with platinum group metals referred to as PGMs (platinum, palladium, rhodium, and iridium). Find out how promptly you will be receiving payment. Most real refiners will get you payment within 24 to 48 hours from receipt of the goods for refining depending on what you are sending in for processing.

Precious Metal Refining Services, Inc.

Can I get referrals? How long has the referral been doing business with you? Have there been any issues, either business or environmental, that have become a concern but never resolved? Just being a slick talker on the phone does not guarantee a good return; integrity will do that for you. I know many of you really don’t have time, but you must take the time to call several referrals as it’s your money at stake!

Sheldon Goldner PMRS-refining.com

How long have you and your company been in business? You must do your due diligence and ask the questions. If the voice on the telephone sounds young, they could be relatively new to the industry, but the company they work for may have been around for some time. They must be in business for at least ten or twenty years. Why several decades? Because no one remains in this extremely competitive business unless they have the experience, financial strength, integrity, and reputation to sustain themselves for so long. What equipment do you use to determine the value of what I send in for refining? If the refiner states they use an x-ray fluoroscopy machine and they do a fire assay for determining the value of the gold and silver, then you are not speaking with a real refiner, but rather a smelter who melts material down to send out to a real refiner to determine actual values. A real refiner should be able to tell you that they use either an atomic absorption flame analysis machine or an ICP Unit, which stands for Inductively Coupled 28

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

What is my “gut feeling” of the person I am speaking with? Don’t minimize that instinct that you have developed over the years of building your business. Do business with people who want to build a relationship with you. What makes your refinery different or better than the others? Do you offer services above and beyond the competition? Are you a fullservice refinery? Do you offer stone removal of the melee from the jewelry? Will you offer to buy my stones or return them at no charge? Do you charge for that service or is it something that you provide as a “free” service? There is nothing wrong with that as one has to offer some kind of value-added service to set themselves apart from the others. Everyone must make a profit so ask yourself if this refiner who just offered to pay you 99.99

percent for your material have assay fees, refining fees, accountability, shipping fees, and any other charges that allow him to make a profit? 99.99 percent by itself just doesn’t work; no one can work for free. What can you tell me about your company? Ask for some information to learn about the company, who they are, how they have evolved over the years, and what their values and competencies are in that which they do for you. You want to know if they were willing to make the investment into their own business in order to grow it. While no one can be 100 percent certain that who they are considering to do business with is legitimate, at least asking some of the above questions might even the playing field and give themselves an advantage by knowing what to ask, when to ask it, and to follow their “gut” with all of their experience – not only in life, but in business.

Geib Refining Corp. Peter Spector Geibrefining.com

Do you work with any pawnbrokers on the NPA board? This is important because the NPA Board represents some of the brightest and best pawnbrokers. Ask the refiner to supply you with some references that you can call and talk with. Do you do “stone digestion” on premises or send it off-site? The answer should always be on premises. Also ask if you are getting credit for gold, silver, and if there is platinum and/or palladium contained in the materials. Don’t go with a refiner who credits for gold only … or sends back platinum vs adding it to lot and paying for it. Another thing to ask is: How do stones come back? Are they in one bag or are they separated with diamonds in one parcel and color stones in another parcel? Are the white goods frosted – clouded or etched? There should be no extra cost for this service. Are you, or have you been, a sponsor of the regional and national trade shows? If so, for how long? You want to know if they are just showing up thinking that booth and travel cost is enough. Not every company can sponsor shows, but those that do should get extra consideration for putting their best foot forward. (Continued on Page 56)

SUMMER 2019

NATIONAL PAWNBROKERS ASSOCIATION

Pawn Expo

PAWN EXPO 2019 National Pawnbrokers Association Annual Convention and Trade Show

July 9-11, 2019 • The Mirage • Las Vegas, NV

Why Pawn Expo? Pawn Expo is the only national convention and trade show for the pawn industry. Attendees learn new ways to strengthen their company, connect with fellow pawnbrokers, and do business at the trade show featuring over 100 different companies. Leave energized and equipped with the latest industry knowledge.

What’s New in 2019 3 Pawnbroker to Pawnbroker panels

Identification of Lab-Grown Diamonds seminar

Fake or Fabulous – Designer Jewelry

For additional information and to register, visit NationalPawnbrokers.org or call (817) 337-8830. 30

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

Convention and Trade Show Highlights Education Expand your knowledge with 12 information-rich sessions including: n

n n n n n

Pawnbroker to Pawnbroker panel 3 discussions Fab or Fake – Designer Jewelry How and When to Use an Auction House Firearms Dealer Liability A Deep Dive – Lab-Grown Diamonds Innovations in Security Technology

Networking Create invaluable relationships with industry experts and build connections with other pawnbrokers.

Pawnbroker Mix & Mingle

Young Professionals Game Night: Let’s play some games! Spend the evening playing a variety of games while getting to know your peers.

Catch a Wave Farewell Bash The closing reception is the final Pawn Expo event. Attendees come to celebrate a great convention and to visit with old and new friends alike, while making their final memories of the event.

Trade Show Meet with over 100 suppliers of pawn products and services and make money selling your diamonds at The Marketplace.

The Monday night reception focuses on making connections at Pawn Expo from the moment you arrive. Special attention will be given to first-time attendees.

Annual Awards Luncheon The Awards Luncheon will recognize the 2019 NPA Annual Award winners including Pawnbroker of the Year, Industry Partner of the Year, and more.

Welcome Celebration – Denim & Diamonds The welcome reception is the convention’s premier social event, boasting the highest attendance of all the convention events. Come to celebrate the kickoff of Pawn Expo and see old friends and meet new ones.

The Certified Pawn Professional (CPP) designation program has over 100 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 2019. Additional registration required.

SUMMER 2019

NATIONAL PAWNBROKERS ASSOCIATION

Pawn Expo

Pawn Expo Speakers KEYNOTE

ALSO

Leadership in Times of Crisis

Roberto Doering – CEO, EyesOn

Captain Richard Phillips

Innovations in Security Technology

While we all aspire to live bravely in the face of life’s significant challenges, few of us are tested to live bravely before the guns of hostile Somali pirates who threaten our leadership and authority, our lives, and the lives of our colleagues. Before Somali pirates hijacked his cargo ship and held him captive for five days, making him the center of a riveting international drama which played out live on television, Captain Richard Phillips was as normal as each of us doing our best at work and home. Captain Phillips will share how planning and practice in our life and business prepares us to respond quickly and effectively when a crisis strikes.

Edward Lewand – Consultant, Appraisal Service Fake or Fabulous – Designer Jewelry Meredith Meuwly – VP of Appraisal Service, Heritage Auctions When and How to Use an Auction House Joseph Kavan – Senior Partner, Kutack Rock LLP Firearms Dealer Liability Miriam Tashey – VP, Professional Gem Sciences Laboratory, A Deep Dive – Lab Grown Diamonds Beth Anundi – Co-owner, Capital Pawn Attracting Female Customers Gina Barkan – Owner, Pawn USA Attracting Female Customers Lynden Miller – District Manager and Marketing

GENERAL SESSION

Director, Money & More

Lightbox Live

Attracting Female Customers Danielle Yanke – Account Executive, IMI

Sally Morrison DeBeers Lightbox jewelry line is a digital brand that was announced shortly before the jewelry industry trade shows in May 2018. In September 2018, the brand began trading online offering its jewelry direct to consumers.

Building Your Digital Community Seth Gold – VP, American Jewelry & Loan Building Your Digital Community Lauren Kaminsky Goldman – President, E Z Pawn Corp Building your Digital Community Joshua Davis – President, Gold N Connection

Sally Morrison, the CMO of Lightbox, provides a review of the first few months of the brand’s operation in the U.S. and a discussion of the brand’s ongoing activities. Drawing on proprietary research and customer

Ask the Experts Sam Shocket – President, King’s Jewelry and Loan Ask the Experts David Ashe – President & CEO, La Familia

feedback, the session will provide a point of view on the lab-grown

Pawn & Jewelry

space and consumer attitudes in this rapidly changing landscape.

Ask the Experts

Highlights Pawnbroker to Pawnbroker Panel Discussions Ask the Experts

Women in Pawn – Attracting

Building Your

Peer-to-Peer

n Pick the brains

More Female Customers

Digital Community

Pawnbroker

n Find out how to

n Learn how to

Roundtables

of 3 successful

pawnbrokers as

make your store more

expand your social

they answer pawn

appealing to bring in

presence beyond

industry questions.

more women buyers.

basic social media.

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

JULY 11

JULY 10

JULY 9

JULY 8

Pawn Expo Schedule Start Time

End Time

Event

2:00 PM

7:00 PM

Convention Registration

3:00 PM

6:00 PM

Board of Directors Meeting

6:00 PM

7:30 PM

Pawnbroker Mix & Mingle

7:30 AM

5:00 PM

Convention Registration

8:00 AM

9:00 AM

Annual Membership Meeting and Breakfast - Members Only

9:15 AM

10:30 AM

9:00 AM

5:00 PM

The Marketplace

10:45 AM

11:45 AM

General Session: Lightbox Live - Sally Morrison

12:00 PM

1:30 PM

1:45 PM

3:00 PM

Seminar: Networking in the Fast Lane

1:45 PM

3:00 PM

Seminar: Security Technology - Roberto Doering

3:15 PM

4:30 PM

Seminar: Fab or Fake - Designer Jewelry - Edward Lewand

3:15 PM

4:30 PM

Seminar: When & How to Use an Auction House - Meredith Meuwly

Opening Session Keynote: Leadership in Times of Crisis - Captain Richard Phillips

Annual Awards Luncheon

6:30 PM

8:30 PM

Welcome Celebration - Denim & Diamonds

7:30 AM

5:00 PM

Convention Registration

8:15 AM

9:30 AM

Seminar: Firearms Dealer Liability - Joseph Kavan

8:15 AM

9:30 AM

Seminar: A Deep Dive - Lab Grown Diamonds - Myriam Tashey

9:45 AM

11:00 AM

Seminar: A Deep Dive - Lab Grown Diamonds - Myriam Tashey (Repeat)

9:45 AM

11:00 AM

Seminar: Women in Pawn - Attracting Female Customers - Pawnbroker Panel

11:15 AM

5:30 PM

Trade Show

11:45 AM

1:00 PM

Trade Show Lunch

4:00 PM

5:00 PM

Trade Show Reception

8:00 PM

11:00 PM

Young Professionals Game Night

8:00 AM

12:00 PM

Convention Registration

9:00 AM

10:00 AM

Trade Show Continental Breakfast

9:00 AM

1:00 PM

11:30 AM

12:45 PM

Trade Show lunch

1:15 PM

2:30 PM

PAWNBROKER ROUNDTABLE: Compliance - Failure to Comply Can Sink Your Ship

1:15 PM

2:30 PM

PAWNBROKER ROUNDTABLE: How to Lower Your Forfeiture Rate

1:15 PM

2:30 PM

Seminar: Building Your Digital Community - Pawnbroker Panel

2:30 PM

2:45 PM

Break - Coffee

2:45 PM

4:00 PM

PAWNBROKER ROUNDTABLE: How to Attract Loans on Higher Value Items

2:45 PM

4:00 PM

PAWNBROKER ROUNDTABLE: How to Attract Top Employee Prospects

2:45 PM

4:00 PM

Seminar: Pawnbroker to Pawnbroker - Ask the Experts - Pawnbroker Panel

5:30 PM

7:00 PM

Catch a Wave Farewell Bash

Trade Show

Thank You To Our Sponsors

SUMMER 2019

NATIONAL PAWNBROKERS ASSOCIATION

business solutions

How to Grow Your Loan Base By Steve Mack, Bravo Pawn Systems

hat is the secret sauce of growing your loan balance? More customers, more product, better communication, analytics, quality underwriting, and healthy retail. Add that to the busy, multi-tasking day of a pawnbroker, and it sounds like a heavy lift. Growing your loan base is only achieved if you sustain the higher dollars over time. After all, the goal of a pawn transaction is to make loans that do not default and are paid with interest.

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

MORE CUSTOMERS

MORE PRODUCTS

Pawn customers are loyal repeat clients. Most pawn customers pay their pawn obligations. They are GOLD. Every customer should be treated as the most important one in your portfolio. While this may sound like an obvious tip, it is one of the most overlooked aspects of customer retention. Examine the way your customers are being treated daily. Then ask yourself how these interactions could improve. The most cost-effective investment in increasing more customers is to extend the life of your current customers. Conducting physical transactions is more expensive and time consuming for customers. Technology and non-collateralized lending products continue to emerge offering these consumers more options. The simple suggestion to acquire customers is to market and advertise. First, you need to set a new priority and effort level of customer acquisition. A pawn transaction or sale is the standard practice in acquiring customer information. Today, the number one priority in every customer interaction is to acquire their information. Any conversation has to include, “Can I have your name and mobile number?” with a meaningful value proposition. Gather their email address for bonus points, and upload to social media to find likecustomers. You don’t have a customer unless they are on your mobile application. A simple name and mobile number are all you need to send the customer your company’s application download. Each customer on your application is worth between $500 and $1000 to your overall company value.

Pawnbrokers today can not be picky. The pipeline of products is shrinking. Every social platform is engaging in the commerce of trading/selling/buying personal assets between the community. This instant liquidity within the community is offering a very competitive transaction. The safety issues associated with Craigslist are dissipating. The high value, cream of the crop categories are being seized by online specialists.

Traditionally, pawnbrokers were specialists, targeting specific items that they were familiar with. Today, there are robust “Product Estimator” and “Quality Assessment” tools guiding pawnbrokers in unfamiliar terrain. Traditionally, pawnbrokers were specialists, targeting specific items that they were familiar with. Today, there are robust “Product Estimator” and “Quality Assessment” tools guiding pawnbrokers in unfamiliar terrain. Generally, back storage rooms are underutilized. Even if you do not wish to overcrowd your retail space, SUMMER 2019

the merchandise does not have to hit the front floor, but rather can be sold online via omni-channel. Selling online is more profitable and quicker than the traditional method of waiting for someone to come in and purchase. Liquidate, even at a lower margin, as the increase in turnover rate accelerates your annual return of capital. Simply put, you have more profit dollars at the end of the year. “Product Estimators” and tech predictive analysis should allow every store to have a unique value estimate, broken down by manufacture model. This monthly adjustment puts the control of your dollars into your pawn portfolio in a controlled, opportunist, and low-risk business model. Lending $5 - $10 extra on each pawn makes an average single store an extra $100k per year. COMMUNICATIONS

Talk to your customers. Be consistent, coherent, and concise. Utilize text, email, and mobile notifications, and use preemptive communication to mitigate loan defaults. Make sure that your communications have a healthy balance of positive messages to create a more conducive image to your business model. INFORMATION – ANALYTICS

There are two parts of the analytic pawn puzzle: products and customers. Pawn requires in-depth analysis for both. Pawnbrokers are some of the best authenticators in the world. With the right tech tool, they can become even better. The best pawnbrokers today lend the most money on properly assessed products to the bestknown customers. This can only be accomplished with data-driven

NATIONAL PAWNBROKERS ASSOCIATION

business solutions information so all the dots can be connected. Pawnbrokers need to be good listeners with highly developed customer service skills. Lending too much to the wrong customer turns a good pawn customer into a defaulting transaction. Undervaluing the product deteriorates the customer’s confidence in the abilities of the pawnbroker and results in fewer return visits. Data is only good if it is utilized, updated daily, and has statistical volume. QUALITY UNDERWRITING

If you pawn, you must underwrite. ABC of lending in any financial institution and transaction requires underwriting. Testing and authenticating are the backbone of the pawn transaction. Consistency

is essential. Objectivity builds the portfolio foundation. Categorized, weighted, evaluative questions broaden the depth of expertise creating higher underwriting and optimized lending opportunities. HEALTHY RETAIL

As my grandma would say, “There is a balance in the pawn transaction, a yin and yang.” This resonated with me early in my pawn operation’s philosophy. When I knew strongly that I could sell something fast and easily, I would lend more. What I mean by healthy is sell fast, efficiently, and for the highest amount. Even if I lost margin, I made up in interest revenues. It is the job of your staff to create a healthy retail environment along with attainable goals. This way, it is easier to build a strong lending,

buying, and customer winning business model. This is an easy business to be negative in. However, if customers and employees are winning, you will reap the rewards. Building a correctly executed loan base is critical in sustaining customers and building long term value. Adopting these methods, a refreshed philosophy, and tech tools available today ensure pawnbrokers a bright future.

Technology, pawn, and innovation – that’s what Steve Mack is all about. As a fourthgeneration pawnbroker, former owner of 50-store chain, SuperPawn, and Harvard Business School grad, he has the vision of how technology can help pawnbrokers reach their fullest potential.

THE FUNDS YOU NEED TO GROW YOUR PAWN SHOP Discover PawnBroker Financing (“PBF”), a direct lender to the pawn

Financing options for the Pawnbroker Industry are typically limited and very restrictive. PBF allows owners in the pawn industry to obtain the cash they need in a timely manner. “Get a Fast Approval for your Pawnbroker Line of Credit”.

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

membership

Online Anti-Money Laundering Course FOR PAWNBROKERS AND DEALERS IN PRECIOUS METALS THE NPA OFFERS an online Anti-Money Laundering course for pawnbrokers and dealers in precious metals through Interactive Learning Group. The course will provide the fundamentals for detecting and preventing money-laundry activity. Crafted by an industry expert, course attendees will learn: n How to properly file an 8300 n Timelines and reporting of an 8300 n OFAC requirements governing your business n Policy/procedure and record-keeping requirements n Suspicious Activity triggers n When to file a Suspicious Activity Report (SAR) The course includes a certificate of training that will meet federal training documentation requirements. It can be taken from any computer with log-on credentials. NPA member rate - $29.95 Non-member rate - $39.95 A 10% discount will be included at checkout for orders of five or more students. For more information, visit NationalPawnbrokers.org/Education/Online courses.

Full-Service Printing & Promotional Warehousing & Distribution Multi-Store eCommerce Sites Visit: store.apperson.com or call: 1.800.473.6761

Apperson is a member of the National Pawnbrokers Association

Apperson.com

SUMMER 2019

NATIONAL PAWNBROKERS ASSOCIATION

business solutions

San Juan 3 store, 2 days after Hurricane Maria’s passing.

Open for Business LA FAMILIA’S UNFORGETTABLE HURRICANE EXPERIENCE

By David Ashe, President, La Familia

ith 14 La Familia stores in Florida, and 21 in Puerto Rico, the 2017 hurricane season was one to never forget. We were affected by two storms: first, Hurricane Irma swept through Puerto Rico and Florida, and then the big one, Hurricane Maria, the “one-hundred-year storm” as the insurers refer to it, hit Puerto Rico squarely. Maria caused widespread

devastation in a small island that’s only 100 miles wide and 35 miles north to south, leaving it completely without power, communications, working roadways or airports, to mention just part of the damage. BUSINESS IMPACT

How did this affect our pawn business, and more importantly, what did we learn? The main impact was felt on pawn loan balances. While our initial thoughts were that people

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

who had suffered from personal losses would need urgent pawn loans to carry them through days without access to banks, and pay interruptions from work due to temporary or even permanent closings, we experienced the opposite. It felt like a giant tax season. Customers came in to redeem loans in record numbers. In Florida, where impact from Irma was limited, loan balances dropped 10 percent in the two months following the storm, and then quickly bounced back. In

Puerto Rico, loan balances dropped 28 percent over a period of four months, and a year after Maria, were still six percent under pre-hurricane levels. Why would pawn loan balances drop like that? This was a powerful reminder that our customers are mainly driven by liquidity. We knew that, but what we didn’t know was how much catastrophic events, such as hurricanes, bring liquidity into our neighborhoods. On one hand, FEMA was writing people $500 checks on the spot right after the storm. On the other hand, local banks in Puerto Rico issued extensions of mortgage and car loans where, in some cases, consumers didn’t have to resume payments until well into the second quarter of 2018. Further, many customers faced weeks and even months without electricity or cell phone services, so they didn’t have to pay those bills, either. As a result, many of our clients had cash in their pockets, and ran to our pawn shops to pay off their loans. Slightly offsetting the impact from our pawn losses was an increase in retail sales. Since we were, in some cases, the only retailers open for business after the initial post-storm weeks, retail sales bounced back to normal, and in some cases above normal, very quickly. LESSONS LEARNED

What did we learn from this? Our most important lesson was a reminder of how dedicated and hardworking our staff is. Despite facing tremendous personal difficulties and even losses, every single one of our employees in Florida and Puerto Rico showed up on time as per our agreed-upon storm plan, to clean up the damage and try to open for business as quickly and resourcefully

Guaynabo 1 store

Arecibo 1 store back open on November 1, 2017, with the sweet sensation that comes from overcoming disaster.

as possible. I will never forget how our employees rose to this challenge. Pawn shops simply cannot afford to shut down operations – our customers’ property is in our back rooms, and the pawn cycle never stops. Being there for customers who need cash, or need to make a payment, is more critical in our line of business than anywhere else in the retail world. The best piece of advice we can SUMMER 2019

give anyone is to have a detailed plan covering employee and customer communications, asset and pawn protection, and most importantly, backup power supply and communications. Parts of Puerto Rico were without power for over six months after Maria. We thought we were covered having a backup power generator in each store. Not so. It turns out that once you have been running a power

NATIONAL PAWNBROKERS ASSOCIATION

business solutions generator non-stop for a week, it needs significant downtime for oil and filter change, and parts will start breaking. As a result, we had to acquire smaller power generators to act as backups to our backup! Another critical element is the fuel supply. After Maria, all the island’s diesel and gasoline supplies were stuck at the port terminals, and the bottleneck was getting it distributed to practically every business and residence on the island that needed diesel or gasoline for their power generators. For weeks, there was no way to get fuel to keep the generators running and stay open, and we had to overcome this by renting two big panel trucks and scrounging fuel bladders, manual pumps, and diesel (luckily pawnbrokers are great at scrounging!) to build makeshift fuel

tankers. For drivers, we assigned some of our staff who have truck driver licenses, and for protection, we assigned some of our other staff members who had firearms and carry permits. We called it “Operation Mad Max”, and it saved our stores. Today, we have our own 2,000-gallon tanker truck that we bought used, and we have ensured that each of our stores have fuel capacity to last at least a week on full generator power while they can be resupplied. Finally, check your insurance policy! The aftermath of a disaster is no time to learn about the small type that says what you are covered for, and more importantly, what you are not. If you have business interruption coverage, make sure it covers the likely scenarios, and that it covers you for enough time for business

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

to get back to normal. If you have a large enough claim, then consider the services of claim preparation experts (many of the big accounting firms can help), rather than go it alone against an insurance company that will be looking for every single technicality to avoid paying you. This is when you learn if all the promises they made to sell you the policy had any meaning. I still have some post-traumatic stress reactions when remembering Maria and its aftermath, but they quickly fade next to the feelings of accomplishment and gratitude that come from our team having executed so well on our plan, and how resourcefully they dealt with all the setbacks. It may sound trite, but we came out way stronger as a result.

membership

Notice of NPA Annual Membership Meeting July 9, 2019

by Kerry Rainey, Secretary, National Pawnbrokers Association

NOTICE IS HEREBY GIVEN that the annual Membership Meeting of the National Pawnbrokers Association will be held at The Mirage in Las Vegas, NV, on Tuesday, July 9, 2019, from 8-9 a.m. At the meeting, the membership will ratify the slate of candidates provided by the Board of Directors for the election of Directors and receive reports from the Officers and the annual report. In addition, the membership will transact any other business that is brought before it in accordance with the bylaws of the association. The individual listed as the representative of the Pawnbroker Member with the Association shall be considered the voting delegate. An alternate delegate may be selected if the representative is unable to attend the Annual Membership Meeting. The alternate delegate must be an employee, officer, or owner of the Pawnbroker Member. An Alternate Delegate form must be submitted at least three (3) weeks in advance of the meeting. If no Alternate Delegate form is submitted and the representative of the Pawnbroker Member is not in attendance, their vote shall be forfeited. All other forms of proxy voting are prohibited.

nF or more information, contact Dana Meinecke, NPA Executive Director, at Dana@NationalPawnbrokers.org or (817) 337-8830.

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SUMMER 2019

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NATIONAL PAWNBROKERS ASSOCIATION

pawn expo presenter

“One of the biggest assets you can provide your customers is a rolodex of experts that you can contact for identification, research, and values no matter what the object may be.” - MEREDITH MEUWLY

When It’s Time to Phone a Friend By Meredith Meuwly, ISA CAPP

he auction house is your friend. In fact, the auction house can be your best friend when you need some help. From dinosaurs and gold doubloons to Dali prints and comic books to Tiffany lamps and Hermès handbags, the auction house has a global network of experts at your fingertips. No man is an island, and no person knows everything. One of the biggest assets you can provide your customers is a rolodex of experts that you can contact for identification, research, and values no matter what the object may be. The auction house is a onestop shop for expertise in a variety of categories. While generalists can make educated guesses, auction specialists have decades of experience in their respective fields which, in turn, enables them to provide helpful and reliable information on a tremendous range of subject matters.

Norman Rockwell’s Original Study for Tough Call

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

At Heritage Auctions, many of our specialists have published books, curated exhibitions, edited price guides, provided expert witness testimony, and lectured on their fields of expertise. The ability to tap into this network for research assistance is invaluable. In today’s world of global communications, knowing what is real and what is false can be a difficult navigation process. By having an auction specialist on your team, deciphering the oftentimes subtle difference between skewed and accurate information will be less of a challenge. Auction specialists are eager to impart their knowledge with you and your clients as they discuss the history of the object as well as ways to maximize the value of the object. With the development of the world wide web, once “rare and scarce” finds can now be located by the dozens and shipped to you overnight from anywhere in the world with the click of a mouse. Although the internet has exposed the not-so-rare items on the market, it has brought great attention to the truly rare and unique items causing their values to soar. The international marketing capabilities of an auction house can draw attention to your object not only from their stable of collectors that acquire specific items, but also a crossover market of potential bidders that will become new collectors. One of my favorite stories is when Heritage Auctions sold Norman Rockwell’s Original Study for Tough Call in August 2017. Arguably the most famous of all baseball-related Rockwells, the painting is officially entitled, “Tough Call,” but is known alternately as both “Game Called Because of Rain, Bottom of the Sixth” and “The Three Umpires.”

1949 issue of The Saturday Evening Post.

The family of legendary umpire John “Beans” Reardon always thought the artwork was a print. The study for the 1949 cover of the Saturday Evening Post was gifted to Beans by the artist and inscribed “My best wishes to ‘Beans’ Reardon, / the greatest umpire ever lived, / Sincerely, / Norman Rockwell”. The family contacted Heritage to sell the print, and through phone conversations and a subsequent examination of the artwork, we discovered it to be much more. The Heritage marketing machine took over and positioned the painting in the Platinum Night Sports Collectibles auction with heavy cross-marketing to the American Art collectors. After advertisements and press releases, the story was picked up by multimedia outlets – even Forbes magazine wrote a story on the unbelievable find. The end result was a resounding success as the auction bidding soared past the $300,000+ pre-sale estimate to set a new world auction record for a study by the artist at $1,680,000. Would you have recognized this so-called print as an original artwork? SUMMER 2019

Would you have the resources to position this artwork for a recordbreaking sale price? By partnering with an auction house, their expertise and marketing capabilities can only benefit you by maximizing the value of important fine art, numismatics, and collectibles. Most importantly, auction houses reward their partners by offering referral fees, also known as introductory commissions, for leads on potential consignments. Fees vary from auction house to auction house, but in general, are a percentage of the hammer price or of the seller’s fees obtained. The auction house needs your help in finding more extraordinary works to sell, and referral fees insure that your part in bringing the items to auction is properly rewarded. By the simple step of making that phone call to an auction house like Heritage, you have not only been of tremendous service to your clients, but also to yourself. Building significant relationships in today’s world to increase the services you can provide to your clients is vital to maintaining and growing your business. Your ability to provide significant assistance outside of your own specialty fosters client loyalty and respect, and in doing so, will increase your own worth to them.

Meredith Meuwly is Vice President, Director of Appraisal Services at Heritage Auctions. She joined the company in 2007 as Senior Consignment Director in the Fine & Decorative Arts Department and currently manages the Appraisal Services department. Meredith is a certified appraiser of personal property and the Director of Education for the International Society of Appraisers. For more information, visit ha.com.

NATIONAL PAWNBROKERS ASSOCIATION

business solutions

Workers’ Compensation and Employers Liability Compliance and Risk Transfer

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

he purpose of workers’ compensation is to compensate people who are injured or contract an occupational disease as a result of their employment. This system views such injuries and diseases as the cost of doing business. Each state has its own workers’ compensation laws which outline how workers are to be compensated for work-related injuries. Although the benefits paid

may vary from state to state, every jurisdiction provides three basic benefits, and some provide a fourth. The workers’ compensation benefits are as follows: 1. Medical; 2. Disability including Lost Wages; 3. D eath benefits; and in some jurisdictions 4. Rehabilitation. Most workers’ compensation insurance policies also include

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

Employers Liability Coverage. As noted above, when an employee suffers a work-related injury or illness, workers’ compensation will typically pay for the employee’s medical bills and other benefits previously discussed. However, employees can still file suit for additional damages if they believe that their employer’s negligence caused or contributed to their injury or illness. It’s the Employers

Workers’ compensation insurance is compulsory in most states. Employers who fail to provide workers’ compensation benefits are usually subject to fines and other potential penalties. Liability Coverage that will cover the related attorney fees, court costs, and settlements of the employer. Therefore, it’s the Employers Liability Coverage that ultimately protects the Named Insured from lawsuits filed against them by their employees for these types of injuries. There are several other types of lawsuits that are typically covered by Employers Liability including: n T hird Party Claims, i.e. when a subcontractor files suit against the Named Insured for getting injured at the Named Insured’s premises while performing his/her duty as a subcontractor; n C are and Loss of Services Claims such as consortium and loss of companionship; n C onsequential injury to a spouse or immediate relative—for example: a husband learns of his wife’s work-related injury and suffers a heart attack; n D ual Capacity Claims, which are those wherein the employer is sued in a capacity other than as employer. Workers’ compensation insurance is compulsory in most states. Employers who fail to provide workers’ compensation benefits are usually subject to fines and other potential penalties. Some states, which are called monopolistic states, require that workers’ compensation benefits be purchased directly from the state fund. The monopolistic states are

North Dakota, Ohio, Washington and Wyoming. Unfortunately, Workers’ Compensation policies offered through the state funds in monopolistic states do not include coverage for Employers Liability. To close this gap in coverage, most insurance companies will allow a business to purchase what is called Stop Gap Liability. Simply put, Stop Gap Liability is an endorsement which adds the Employers Liability Coverage back into the Named Insured’s Commercial General Liability Policy. Businesses in the monopolistic states should not only purchase the workers’ compensation benefits from their state fund, but they should also have their insurance broker add Stop Gap Liability Coverage to their Commercial General Liability policy. The fact is that pawnshops deal with all sorts of situations that could result in an employee getting injured. We’ve had actual instances where employees have been injured by weapons that accidentally discharged, armed robberies that have resulted in physical and mental injuries, employees being injured by lifting heavy objects and, unfortunately, we have even had clients whose employees have been killed. If a serious injury occurs, there would likely be hospital bills, disability benefits owed, rehabilitation costs, and possibly death benefits that need to be paid. There could also be a lawsuit filed SUMMER 2019

by the employee alleging that the employer’s negligence caused or contributed to the injury. Lawsuits could also be filed by unrelated third parties or by spouses. These claims often turn into very costly events that could seriously affect the financial well-being of a business. Workers’ compensation insurance policies will not only protect the business, but they will help provide the needed benefits to your employees should they get injured on the job. Since injuries or illness sustained by an employee while in the course of their employment and resulting Employers Liability related claims are generally excluded under a General Liability policy, business owners should always purchase a workers’ compensation insurance policy and Employers Liability Coverage. Doing so will ensure that you are always in compliance with local workers’ compensation laws, and it will provide your business and your employees with the proper protection should an unfortunate incident occur.

Gary Wasserman is Vice President of Wexler Insurance Agency, Inc, located in Coral Gables, FL. It is one of the world’s largest privately-owned independent insurance agencies specializing in providing insurance to the pawnbroker trade. For more information, email Gary at gwasserman@ wexlerinsurance.com.

NATIONAL PAWNBROKERS ASSOCIATION

young professionals

NPA Young Professionals Group – What’s It All About? by Randi Nell

THE NPA YOUNG PROFESSIONALS (YP) group is for any NPA member (both Pawnbrokers and Industry Partners) under the age of 40. Our Facebook page helps us get to know each other and serves as a way to stay connected throughout the year. Going to Pawn Expo and the NPA Legislative Conference is always more fun when you can look forward to seeing friends. Even though the NPA YP group is primarily a group of younger pawnbrokers, we have quite a mix of talent and experience. Many are just getting started in the industry, but there are also those who own or manage their own stores. So, whether you feel like you have something to teach, something to learn, or are just looking to make a few friends, the NPA YP group is an excellent place to be. At Pawn Expo, we have a few activities that are just for YP’s. Last year we had a Meet and Greet cocktail hour with the NPA Board of Directors to get to know them better.

At the YP Luncheon, Kara Blakeman, Classic Jewelry and Loan, talks about upcoming YP activities.

We also had a YP luncheon and got a chance to catch up between sessions. This year, in addition to the luncheon, we are going to have a Game Night on Wednesday, July 10. We look forward to seeing everyone there! n If you would like to learn more about the NPA Young Professionals group, email Brittany@NationalPawnbrokers.org.

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The Power of Habit By Charles Duhigg

CHARLES DUHIGG IS A REPORTER for the New York Times and also a Pulitzer prize winning author. His book, The Power of Habit, spent 120 weeks on the New York Times bestseller list and has changed the way many people think about their habits on an individual and an organizational level. Filled with findings based on research, it explains how habits are formed and how they can be changed. Companies used the information in identifying the routines of their customers to help sell more products. Habits (both good and bad) play an important role in our lives and consist of three parts: cue, routine, and reward. Most people think it’s the routine that creates the habit, but according to Duhigg’s research, it’s actually the cue and the reward. Keep the cue, replace the routine, and keep the reward to form a new habit. And those who think they have no willpower will be happy to learn it can be strengthened over time as well, thereby changing one’s life.

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SUMMER 2019

NATIONAL PAWNBROKERS ASSOCIATION

industry partner spotlight

“Focus on your strength and deliver customer service that is superb.”

Diam INC.

Simplex

The Simplex Diamond buying team

Diamonds – Always and Forever SIMPLEX DIAM

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

lthough Simplex Diam has been in business for 36 years, Yogesh Madhvani, the company’s president, has been in the business even longer – 43 years. He was visiting a friend back in 1976 and found the business to be very interesting. After training as an apprentice for a year, he had an opportunity to move to the U.S. where he started the company as a partnership with a $1 billion+ global diamond company. Today, there are 11 employees in the New York office. They buy several thousand carats of loose diamonds every month and have bought some of the largest diamond and jewelry liquidations. While the last few years have been a little more difficult for diamond buyers, Simplex Diam responded to the challenge by widening their supply base and continuing to buy diamonds despite the market. The lab-grown diamond trend also presented a challenge, but Yogesh says they have not seen as many as they had expected. They are also seeing some new trends in the pawn industry. One is that pawnbrokers are expanding their product line and are selling (and buying) more designer handbags. They are also using more certifications to help value and sell their diamonds. Yogesh has assembled a great team that has been together a long time; some have been with him for as long as 20 years. To anyone just starting out in the business, Yogesh says, “Focus on your strength and deliver customer service that is superb.” The company has provided consistent reliable service for over 35 years and has become one of the most recognized buyers of bankruptcy auctions for some of the largest retailers and wholesale companies. You can find them at a number of trade shows including: JIS, JA, SJTA, JCK, CAPA, IJO, the Hong Kong shows, and of course, NPA’s Pawn Expo. You can also visit their website at Simplexdiam.com which includes tutorials.

membership

National Pawnbrokers Association New Members FEBRUARY 1, 2019 – APRIL 30, 2019 PAWNBROKERS Alaska

North Carolina

Alaska Fast Cash Fairbanks,

Parker Pawn Shops •

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Big Steve’s Gold & Pawn •

Express Pawn • Lincoln

Mountain Home iPawn • Little Rock United Pawnbrokers • Jonesboro California Capital City Loan & Jewelry, Inc • Sacramento (4) Elliott Salter Gives Instant Loans • West Hollywood Western Loan & Jewelry • Los Angeles Florida Glades Pawn LLC • Sebring Simple Pawn • Kissimmee (2), St Cloud Georgia Tom’s Pawn Central •

New Jersey Fast Cash on the Spot, LLC • Toms River Ohio Best Pawn Shop • North Randall Oregon A Cut Above Pawn • Beaverton Texas Harrisburg Pawn • Houston M&M Pawn LLC • Fort Worth W R Harris Loan Inc • Katy West Virginia Fast Financial Services LLC • Inwood

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Massachusetts LBC Boutique & Loan • Somerville Maryland Champion Pawn & Jewelry • Baltimore Chestertown Jewelry and Pawn Inc • Chestertown

INDUSTRY PARTNERS Fortuna Auction • New York, NY PawnMate • Ontario, Canada Trident 1 • Southlake, TX Yehuda Co • New York, NY

Mississippi Dad’s Super Pawn • Pascagoula

SUMMER 2019

NATIONAL PAWNBROKERS ASSOCIATION

pawn expo presenter

Lab-Grown Diamonds –

What Does the Future Hold?

By Myriam Tashey, Professional Gem Sciences Laboratory

he pawn business has a unique and important role to play in writing the story of labgrown diamonds. Actions taken by this industry will go to great lengths to determine the value of this new product in the coming years. Before we dive in, let’s get up to speed on the market as it stands today. Over the past few years we have seen a stark change in their price

as lab-grown diamonds began to appear in the marketplace in sizable quantities. Two years ago, a generic lab-grown stone was priced next to its natural counterpart, typically being sold in a retail environment for about 20-30 percent less than a natural diamond of like quality. Today, that number has fallen dramatically. Spurring the fall was De Beers’ strategic decision to enter

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

the business. In September 2018, that firm rolled out its new Lightbox line of lab-grown diamond jewelry marketing them as a fun, affordable product, and selling them directly to consumers for $800 per carat. Most of that line sold out and they are ramping up production accordingly. They broke ground on a new facility in the U.S. and boast an output target of 200,000 carats of polished

lab-grown stones annually. This comes in addition to the estimated 500,000 carats a year that already enter the pipeline. Many analysts have suggested that De Beers’ decision to forge into the market was a calculated maneuver to push down their price and bolster the position of natural diamonds. It has certainly had that effect, but may also be the industry giant hedging. A recent survey of 2000 millennials in the U.S. indicated that approximately 55 percent of young women getting married would accept a laboratory-grown diamond engagement ring. The numbers are similar for young women in China and Japan. Millennials appear okay with synthetics. It’s no surprise given how lab-grown stones are typically marketed—as an eco-friendly, ethical alternative to mined diamonds. Regardless of whether this marketing is true, it fits a narrative that millennials are all too eager to embrace. De Beers is only the most recent actor to enter the market. Retailers like Brilliant Earth, Diamond Foundry, and Rogers & Hollands have had a running head start, while Helzberg Diamonds and J.C. Penney have also waded into the waters. These companies do not subscribe to cheap pricing models and are hoping to buck the trend of falling prices. At the time of publication, the online retailer MiaDonna has numerous five and six carat labgrown diamonds listed for sale on their website for around $10,000 per carat. Complicating the picture are low-cost Chinese firms waiting in the fray, ready to scale production for growing U.S. and global demand. Since diamond synthesis technology was first developed,

production costs have dropped dramatically. In the early days the process cost thousands of dollars to produce a carat of polished diamond. Today, the same size stone can be produced for a few hundred dollars. This is where we find ourselves: growing demand, falling prices, and falling production costs. What is a pawnbroker to take away from this? Herein lies the industry’s pivotal role in the story. Pawnshops loan on, and buy outright, millions of carats of diamonds every year. The industry up-cycles significant quantities of diamond back to jewelry manufacturers. Through retail sales and the ability to loan on an object, pawnbrokers convey value to diamond jewelry. What would happen if a pawnbroker said “no” to lab-grown diamonds? What if a shop chooses not to loan on a lab-grown diamond and elects to treat it similar to lab-grown ruby or emerald? And what if that cascades more broadly en masse throughout the country? Conversely, saying “yes” - providing that loan or buying the object - will go lengths toward legitimizing labgrown diamonds in the marketplace. This remains the big question swirling about the sector.

the right price to pay for a piece of jewelry, you have to positively know what it is you are looking at. Get Informed and Know Your Story

Detection

The best thing that you can do is to be aware of market fluctuations; take a class, train your staff, and make sure they’re using equipment properly. Stay informed about the trends and have a narrative ready. If you do retail lab-grown diamonds, be ready to explain why. And if you don’t, make sure your staff understands that and is able to articulate why not. While many forecast doom and gloom, history shows us that the industry will survive this epoch of change as it has done time and time again. There were similar periods of panic and an according adjustment following Cubic Zirconia and Synthetic Moissanite’s entrance to the market. When Rapaport began publishing prices, the trade recoiled that this would be the end of the diamond business as we know it. Glass-filled rubies, 14 karat gold plumb, beryllium enhancement, and so on and so on – each time the pawn industry has proven to be resilient. When the dust settles these things found their niche and the market consolidated accordingly. The same will undoubtedly be true for lab-grown diamonds.

Today, everyone should be investing in good quality equipment in order to identify these stones. The wait-and-see period has passed and enough lab-grown diamonds are entering the marketplace to justify the urgent need for tools that accurately detect them. In order to make an informed call and know the proper amount you can loan, or

Myriam Tashey is co-founder of Professional Gem Sciences Laboratory. She has been in the jewelry business for more than 40 years and, along with her husband, runs a full-service gemological laboratory in Chicago. In addition, she teaches classes and mentors young professionals.

WHAT SHOULD PAWN STORES BE DOING?

SUMMER 2019

NATIONAL PAWNBROKERS ASSOCIATION

How to Protect Yourself from Fake Bullion Purchases By Jack Brown - Opera0ons Manager, Mid-States Recycling & Refining I recently wrote an ar0cle for PawnLink.org highligh0ng the growing frequency our pawnbroker customers were being exposed to and taken advantage of with fake bullion and replica coins. Many of these defrauded, poured, and extruded precious metal investment pieces started out as legi0mate bullion products coming from reputable refineries and banks. Scammers would then drill out actual gold or silver from these pieces and back-fill them with materials like lead or tungsten rods. Scammers then increased their level of skill to produce replica coins and bullion through min0ng, electropla0ng, and even cladding over low value base metal to look like authen0c precious metal currencies and investment bullion.

Pawnbrokers, coin dealers, jewelers, and other second-hand buyers became beJer trained on ways to iden0fy many of the fake pieces coming in off the street using scratch and acid tes0ng, cuLng bars and coins in half, using templates (The Fisch) to measure diameter and thickness, and even rudimentary electronic gold tes0ng instruments – all to minimize their exposure to fraud. Now, it appears these metal plagiarists have brought their counterfei7ng sophis7ca7on to new levels by mimicking encased cer7fied bullion collectables. Most oSen produced in Asia and typically marketed through websites like eBay and Alibaba, the counterfeiters have been able to produce alloys that can oSen fool some of the newer electronic instruments developed to minimize exposure to making a bad purchase or loan. With the percep0on that cer0fied “slabbed” coins bring higher resale value than their loose counterparts, most pawnbrokers and coin dealers are reluctant to tamper with the plas0c card certs or hard clamshell enclosures to do the proper verifica0on of the metal inside. Most pawn associates lack the advanced numisma0c knowledge to detect flaws in the substandard relief of the min0ng, off color, or detail to the edge reeds among other clues. Addi0onally, there may be characteris0cs of the casings that may help iden0fy a fake like air bubbles trapped under the hologram s0cker, differences in the quality of the labels’

prin0ng or deficiencies in the edges of the encasement. OSen with card mounted bars, one can spot a fake by simply being familiar with what the proper thickness of the actual ingot itself should be. The picture below shows the kind of glaring differences between the thickness of a real fine gold bar vs. a plated replica.

Coin cer0fica0on agencies like NGC and PCGS provide free authen0fica0on of their cer0fied products; however, this requires one to ship the item back to that specific cer0fying agency for this service. Doing this makes the likihood for a dealer to secure an onthe-spot purchase much more difficult and oSen results in lost business or upseLng customers looking to sell legi0mate items. Companies that manufacture instruments to detect illegi0mate bullion (Sigma Metaly0cs Precious Metal Verifier Pro) con0nue to evolve their technology to keep up with the producers of fake bullion products. These instruments have the ability to provide verifica0on of authen0city even through the thick plas0c casings of sealed coins and bars, but they are not inexpensive and s0ll require the operator to be well-versed on their use and limita0ons. Is there a simple answer on how to protect yourself from being the vic0m of fake bullion flooding the market 100% of the 0me? Absolutely not. You might consider adjus0ng your purchase offer of slabbed or carded bullion to reflect scrap or loose coin values, enabling you to remove the metal from their encasements (with the customer’s approval) to perform more diligent tes0ng of the metal. There are a mul0tude of YouTube videos and ar0cles wriJen in coin publica0ons and internet chat forums frequented by knowledgable pawnbrokers and experts in the field of numisma0cs that address this growing problem. At this point, the best approach is to u7lize the most current technology available and commi> to con7nuous numisma7c training for yourself and your employees to minimize poten7al exposure. Next Issue: Tips on Tes0ng Jewelry Scrap.

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community involvement

Thank You for Your Support FBL DONATIONS 9/1/18 – 4/1/19

NPA WOULD LIKE TO THANK all of the members who have donated to the Future Business Leaders (FBL) scholarship fund since last September. The program relies on your generosity and without it, we would not be able to offer financial awards to these deserving students. The FBL program was started in 2003 and has awarded over $150,000 in scholarship money. Winners are selected based on academic performance, community leadership, and a written essay. Applicants are the children, grandchildren, customer, employee, or individual sponsored by a member in good standing in the NPA. If you would like to contribute to the scholarship fund, send your check to NPA, PO Box 508, Keller, TX, 76244. You can also donate online on the NPA website. A Pawn USA Clermont, FL

Clark Loan & Jewelry Inc Aberdeen, MD

Leo Marks Jewelers Toledo, OH

Royal Loan San Diego, CA

A To Z Pawn & Resale Palos Hills, IL

Diamond Gem Lending Co Portsmouth, OH

AAA Gun & Pawn Shop Deland, FL

Dixie Pawn, Inc Manassas, VA

Lincoln Square Pawnbrokers, Inc New York, NY

Sam Light Loan & Mercantile Co St Louis, MO

Alpha Gold Exchange Baltimore, MD

Dynasty Jewelry & Loan Ltd Norcross, GA

Longhorn Cash, Inc Athens, TX

Shane’s-The Pawn Shop, Inc Chicago Heights, IL

Atlas Loan & Jewelry Co, Inc Bellflower, CA

Family 1st Pawn Republic, MO

Lowell Jewelry & Loan Lowell, MA

Sterling & Knight Jewelry & Pawn Villa Park, IL

B & B Inc Portsmouth, OH

Fulton Loan Office, Inc Atlanta, GA

Batesville Gun & Pawn Shop Inc Batesville, MS

Gardena Jewelry & Loan Charlotte, NC

Berry’s Pawn of Madison Madison, TN Big Daddy’s Pawn Shop Little Rock, AR Big Dog Pawn & Jewelry West Jordan, UT Big Tex Pawn Shop Odessa, TX Bill’s Pawn Shop LLC El Dorado, AR Buchwald Jewelers Inc Miami, FL

Gasperson Inc Swansboro, NC Glines & Rhodes Attleboro, MA Greenmount Loan & Jewelry Baltimore, MD Greenville Pawn & Bargain Greenville, MS Herman’s Pawn Shop Collinsville, IL Jery’s Pawn Hope Mills, NC

Capital Pawn Montgomery, AL

Jewelers’ Row Money Loan Inc Philadelphia, PA

Carson Jewelry & Loan, Inc Carson City, NV

K & K Loans Buckhannon, WV

City Pawn Shop Montgomery, AL

Larry’s Jewelry & Pawn Florence, AL

Naperville Jewelry & Coin Exchange Naperville, IL Nathan’s Lynnhaven Pawn Shop Virginia Beach, VA

Sumpter’s Jewelry & Collectables Charlotte, NC Sylacauga Pawn Sylacauga, AL

National Pawnbrokers Outlet Waterford, MI

Ted’s Pawn Shop Norwood, OH

Navajo Trading Co Farmington, NM

The Pawn Shop Sulphur Springs, TX

Ohio Loan Co, Inc Dayton, OH

Tri-State Pawn & Jewelry Inc Ashland, KY

Old South Pawn Mason, GA Pawn Express of Troy, Inc Troy, AL Pay Less Jewelry Fort Lauderdale, FL Pine Ridge Pawn & Jewelry Naples, FL Poplar Jewelry & Pawn Parkville, MD

Uncle Ben’s Pawn Shop Cleveland, OH Uncle Dan’s Pawn Gun & Archery Elizabeth, KY USA Loans Little Rock, AR Westside Loan Office Los Angeles, CA Worldwide Jewelry & Pawn

Quik Pawn Texas City, TX

Bristol, IN

R J Cash Enterprises, Inc Miami Gardens, FL SUMMER 2019

NATIONAL PAWNBROKERS ASSOCIATION

multi-store owner profile

“We have to say ‘no’ a lot, and there is an artful way to do that without offending the customer. The most successful employees are the ones who have mastered this art.”

Bob Simpson, Secretary & Treasurer, El Bufalo Pawn

Be Different EL BUFALO PAWN

Over half of all NPA pawnbroker members are part of a multi-store operation. To get a closer look at all the decisions that are made on how, when, or if you should expand your pawn business, we are featuring a series of articles on pawnbrokers who own more than one store.

With 11 stores and 65 employees, Bob Simpson of El Bufalo Pawn in south Texas is a busy guy. Whether he’s visiting a store, hiring and training employees, or cooking up a new marketing campaign, he strives to stay on top of his business. He and his partner cousins, who both had previous pawn experience, opened their first store in 1995. They now have nine stores in Laredo, TX, plus one each in San Antonio and Lytle. Bob’s biggest challenge with a large operation is auditing, checking, and visiting stores. “So many employees also means many employee challenges. There is always some employee ‘scandal’ going on somewhere. You have to get word of it, and tackle it right away before it festers and makes things even worse,” he says.

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

To set their stores apart from their competition, they try very hard to be different – especially to be more flexible and friendly. “They open at 9, so we open at 8:30. We open an hour earlier on Sundays too. They close on July 4, we are open on July 4. They do 60-day loans, we do 90-day loans. They pull items right away after pull date, we automatically hold items for one week and longer if they have left payments on them earlier. They do 3-month layaways, we do 10-month layaways. They do not cash checks, we do.” When hiring employees, Bob looks for customer service and sale experience. “You have to be a people person to succeed in a pawn shop. We have to say ‘no’ a lot, and there is an artful way to do that without offending the customer. The most successful employees are the ones who

have mastered this art.” He also looks at longevity with previous jobs and flexibility. “For Laredo employees, we ask that they can work at any store so changing schedules is much easier.” Bob developed an employee manual that shows new recruits how to deal with various business transactions, including opening and closing procedures, security procedures, testing jewelry, spotting fakes and counterfeits, handling layaways, handling check cashing, handling money transfers, making deposits, etc. He uses email as the primary communication method to keep everyone on the same page. Each manager has their own email that they need to check throughout the day as does each store. “The NPA alerts are great in that I can easily forward them out to all the stores. For more urgent notifications, we will have someone call all the stores, or the stores that might be affected by the notification,” he shares. How does Bob decide when and where to open a new store? He looks at some key factors before making his decision such as: distance from the nearest competitor and his own stores, in and out traffic flow, number of people that live within a few miles, socioeconomic demographics, and cost of purchasing/ renting. To fund his first store, he and his cousins went to work after college and saved – a lot! They put together an SBA loan package and took it to their local bank, but it was declined unless their parents co-signed. “That was not going to fly,” Bob said. “We revamped our SBA loan package and took it to another local bank who approved us. We have been with them ever since. The CEO told me that one of the bank auditors specifically called us out as a customer to drop, but thankfully, he knew he had no obligation to do so and stuck with us. Each new store was another loan with the same bank (IBC Bank) and they have financed all of our stores.” He also advises, “You will spend less time inside the individual stores, so you will need to have a crew you can trust. And never presume anyone is 100% trustworthy. Anyone can fall given the right circumstances. Audit, audit, and audit. Change the person auditing. Send the supervisor to check on things. Have quarterly manager meetings to train and talk about things going on inside their stores. And of course, make sure you have access to capital. You never know how fast loans will grow or how long a store will take to become profitable. Make sure you have a cushion.”

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business solutions (From Page 29)

Having a clear timeline avoids misunderstandings when a situation arises where quick cash is needed. Be sure the payment schedule or quote includes turnaround times for every type of lot you send in from scrap lots to stone removal.

Choosing the Right Refiner

United Precious Metal Refining, Inc. Rafael Amador Unitedpmr.com

What are your fees? Knowing and understanding the fees in advance can lead to a long-lasting and healthy relationship between pawnbrokers and refiners. Ask your refiners for a written quote to include the percentage charged for refining as well as any additional fees and costs including, but not limited to, stone removal, assay, lot fees, etc. Do you settle on x-ray or fire assay? The difference between an x-ray and fire assay can be substantial. An x-ray machine can lose calibration over time affecting the results of the test. X-ray machines are also programmable and subject to user error when being used or calibrated. The oldest and most trusted test for precious metals is the fire assay which uses a scientific process to determine the exact content of fine gold in your scrap lot. An X-ray is conducted within minutes, whereas a fire assay takes several hours. The difference can literally mean hundreds of dollars to the pawnbroker. Can we visit the refinery to witness a melt? Most refiners offer customers the ability to visit the facility and even witness a melt of their own goods. Being able to observe the process is important to many customers who have trust issues when it comes to working with a refiner they are just starting with. Customers can also request a third party to witness the melt and secure a pin at the time of processing for verification. If your refiner isn’t willing to accommodate these requests, you may want to find one that does. What are the turnaround times? Often, customers send in gold scrap for refining when a need arises, such as payroll, taxes, etc. 56

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

How long has your company been around? While being “new” isn’t necessarily a bad thing, most people find comfort in working with a company that’s established, has a healthy client base, and a track record for accurate, honest results. Be sure to ask for references and check to see if the refiner is involved with trade associations and other industry groups.

Noble Metal Solutions Jim Jackson Noblemetalsolutions.com

Can you watch the melting of your metal and understand the analytics in the refining process? Your business’s return percent (what amount you get towards 100 perent) can be different between refineries, but once you understand the analytics (purity of metal), you can spot the differences. Does the refinery have an onsite laboratory for exact analytics, including fire assay, stone removal, chemical processing of prepared sweeps, etc.? Many refineries fail to have in-house and accurate analytics forcing the final results to be determined by a company unknown to the customer. Does the refiner provide a pin core sample from your melt to “umpire” with a 3rd-party laboratory to confirm results/analytics? All refineries who provide accurate results should have no problem letting a 3rd-party laboratory confirm the results reported to the customer.

state news

State Association Updates

MISSOURI Rob Lauer Missouri Pawnbrokers Association (MPBA) rob@pawncenter.com

Two Senate bills directly affecting Missouri pawnbrokers were introduced this past session. The first, SB 243, would place a hold order on all bought or pledged property for a period of 15 open days. The second, SB 442, would have required fingerprinting of customers, storage of transaction records for 10 years, holding all purchased precious metals for 90 working days, and the transmission of information to all law enforcement agencies located within the county and the Missouri Highway Patrol. In addition, we would have been forbidden to purchase from felons as well as had to pay a fee to the state for each transaction. We met with several Senators and were able to keep both bills from being heard in committee. Unfortunately, Senator Wieland has vowed to introduce legislation similar to SB 442 next session. These bills were stopped from passage because of the vigilance and fast action by our lobbying firm, Burton Liese. If you are not a member of the MPBA, and are concerned about the continuation of your pawn business, it is important that you join us (missouripawnbrokers.com) and support the industry.

NEW YORK David Kaminsky, President Collateral Loanbrokers Association of New York (CLANY) david@ezpawncorp.com

It is with great pride and gratification that my first task as CLANY’s newly-elected president is to announce that we have won our first major victory against the New York City Police Department and their illegal search and seizure of pawnbrokers’ and secondhand dealers’ property and the property of our customers. Judge Danziger handed down his longanticipated decision in April. It affirms our claims that for decades the police department has been violating the rights of pawnbrokers, secondhand dealers, and the customers that use these services. While I applaud the hard work, enthusiasm, and dedication of Mark Kriss and Paul Solda, our legal department, and our board and members of CLANY, our fight unfortunately is far from over. New York City will not surrender until it has been beaten. I implore each of you to get involved with CLANY and help us win this fight for our rights. We need your support to continue fighting and changing laws that affect all of us. If you’re not a member of CLANY and you are a pawnbroker or secondhand dealer in New York State, it is imperative to join, or at least help us. To join, go to clany.biz/join or contact Jason Wienger from Paradise Pawn: (718) 298-8900, paradisepawn@optimum.net.

SUMMER 2019

NATIONAL PAWNBROKERS ASSOCIATION

pawnder this

Perfection Triple Frontier. Mine. The Dirt. Losers. Murder Mountain. If you can guess what these five titles have in common, you’re just like me – addicted to Netflix. And I’m sorry to say, there’s no known cure. For those living under a rock, here’s a quick history lesson of the significance of Netflix to our lives. What began as a fun little upstart laughingly took on behemoth Blockbuster by allowing us to rent movies through the mail and – wait for it – return them whenever we felt like it. Yikes, that was scary. Of course, today Netflix is the biggest, baddest, and most important (at this writing) streaming service on the planet. And Blockbuster? Well, Blockbuster is down to one store… in Alaska. As a kid, there were three channels, rabbit ears, and no remote. Wait, I take that back. I was the remote as far as my dad was concerned. Helped me keep off the baby fat from all the Ding-Dongs, Twinkies, and Moon 58

NATIONAL PAWNBROKERS ASSOCIATION

SUMMER 2019

By Rudy J. Klancnik

Pies that littered the pantry. Appointment TV back then meant All in the Family, Good Times, Love Boat, and Fantasy Island. If you grew up in the ‘70s, other than having some really nappy hair, you must remember the epic mini-series Roots. That was a stop-down, gather-infront-of-the-TV history in the making for weeks. Fifty percent – yes, I said 50%!!!! – of Americans watched Roots, according to Nielsen. Today, if Netflix captured more than a 3-5% share of eyeballs, their executives would do back flips. Netflix is the hottest name in show business right now and I’m here for all of it. The good, like Jason Bateman’s Ozark; the bad, like the final season of House of Cards; and the just plain ugly, like Brad Pitt’s War Machine. Oddly, most of their programing sits in the bad category. I mean really, really bad. The aforementioned original movie Triple Frontier doesn’t only have a terrible name, it’s also terribly written.

Then again, I’m pretty sure some random dude sitting at Starbucks right now could bang out a script on his iPad this weekend that Netflix would produce. They’re spending billions making sure people like me think only of them when they think of TV. I think that was Nino Brown’s (aka Wesley Snipes) strategy in New Jack City. Netflix is filled with forgettable shows. The Dirt is basically the autobiographical garbage dump about Motley Crue. Wow, really bad. Mine is a movie about a guy standing on a land mine for 90 minutes, but it felt like 16 hours of my life. In the end, I truly was rooting for the land mine. But still I watch. Each and every night I watch. Netflix is my best buddy, always there with a suggestion, always there to pass the time. The word “binge” used to be closely associated with eating way too much chocolate chip ice cream, chicken nuggets, or slices of pizza. Today, binging means spending 13 straight hours knocking down an entire season of Stranger Things. I’m a huge fan of the series Lost. Same with Sopranos. And West Wing. I couldn’t wait until those shows came on each week. The anticipation and conversation between episodes kept those shows alive and relevant for months. Thanks to Netflix, I now binge through entire seasons in a weekend and don’t have time to talk to anyone about any of it because I’m always watching a new show. Is this all bad? Of course not. Three channels back in the day is bad. With Netflix, I now have a seemingly limitless supply of documentaries about wrongly convicted murderers. Always a go to. I’ve now got endless stories about Pablo Escobar, women behind bars in orange jumpsuits, and I’ve even got Fuller House (college cheating scandal by one of its stars sold separately). If that wasn’t enough – and nothing is never enough when we’re talking Netflix – I’ve got nearly every one of my favorite shows at my fingertips so I can watch them over and over and over again. My wife thinks I’ve got “issues” since I’m now on my seventh re-watching of all seven seasons of The West Wing. Yes, I adore President Bartlet and desperately want to work alongside Josh, Toby, and Sam. And that’s coming from a lifelong Republican. In reality, the only issue I have is I don’t have enough time to watch Netflix often enough.

Netflix is like a never-ending treasure hunt. Or an adult version of Fortnite. You just can’t get enough. Should I rush through Season 1 of Mad Men tonight? Should I check out Cricket Fever, the documentary about the Mumbai Indians? Should I learn something and watch World War II in Colour? Note the spelling of color here. Something you learn quickly on Netflix is that Netflix loves foreign-made shows. The very intoxicating and always out there Black Mirror, for example, is a like a tour de force of Western and Eastern European landscapes and accents. For better or worse, Netflix dominates my life. I’m a bit too old to Netflix & Chill (look it up if you don’t know), but I’m all about Netflix & Still. As in sitting still for so long that my butt cheeks go numb. As I write this column, I can’t help but think about what I might be missing on Netflix. Could they have posted a new season of Mind Hunter or maybe Arrested Development or perhaps they’ve launched a new show about a maximum-security prison that takes place on a distant planet with Germanaccented actors? Either way, I’ve got to go!

SUMMER 2019

NATIONAL PAWNBROKERS ASSOCIATION

calendar of events JULY 2019

SEPTEMBER 2019

July 9-11, 2019 The Mirage Hotel & Casino | Las Vegas, NV Contact Helen Moore: PawnExpo@NationalPawnbrokers.org NationalPawnbrokers.org

September 27-29, 2019 Renaissance Long Beach Hotel | Long Beach, CA Contact Kim Andosca: KAndosca@amgroup.us CaliforniaPawnbrokers.org

PAWN EXPO 2019

CALIFORNIA PAWNBROKERS ASSOCIATION ANNUAL CONFERENCE

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

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Replacement Cost 2 or 3 times pawn value

New York OfƂEG 580 Fifth Avenue Suite 715A New York, NY 10036 Tel: 212-391-5211 Fax: 212-391-5212

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

California OfƂEG 1400 Quail Street Suite 235 Newport Beach, CA 92660 Tel: 949-723-3835 Fax: 949-723-3839

E-mail: info@wexlerinsurance.com

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

BLUESTONE TRADING COMPANY INC. HONESTY | I NTE GRI TY | VA L UE

OUR REPUTATION SHINES AS BRIGHTLY AS OUR DIAMONDS. Bluestone Trading Company Inc. has been in the diamond business nationally and internationally for more than 41 years. Headquartered in Cleveland, Ohio, we manage our business with Midwestern values. We are the trusted source for your loose diamonds, modern and estate jewelry from one piece to entire family and store collections. No deal is too big or too small. Our longevity has helped us gain trust in the industry for our expertise and knowledge to buy and sell goods at the best possible prices. We offer free overnight shipping, same day wire, & overnight check services.

1-888-8 -BLUE www.bluestone-trading.com