Cathy Haggerty, owner of TomCats Pawn Shop, took in a large painting years ago and mounted it on the ceiling inside the front door. Staff photo by David Snodgress
A last bastion for the unbanked and underbanked, pawn shops have had a negative image in popular culture and are subject to multiple regulations. Where stereotypes once acted as barriers to new customers, pawn shops have made changes and have experienced a positive response from consumers.
The 2016 National Pawnbrokers Association’s Trend Survey noted an increase in reliance upon pawn shops by members of the millenial generation, who look to the temporary loan providers as a solution to an uncertain economic future. Reality shows such as “Pawn Stars” have given the industry a new cachet, and pawn shops have become more transparent in the hopes of educating potential customers.
“The first time I walked into a pawn shop, I thought I was either going to get shot or the ceiling was going to fall on my head,” said Cathy Haggerty, who serves as the Indiana Pawnbrokers Association’s southern vice president and owns TomCat’s Pawn Shop in Bloomington.
Raised on a farm in northern Indiana, Cathy Haggerty’s only experience with pawn shops came from the movies. Pawnbrokers were depicted as a greedy bunch dressed in cheap suits, willing to skirt the law just to make a buck. Just as the general population’s acceptance of the industry has changed, so has Haggerty’s. After 30 years in the business, Haggerty is intimately familiar with the more than 15 statutes and regulations that federal, state and local governments impose upon pawn shops.
Safeguards against illicit practices begin before a pawn shop even opens. To obtain a license, owners must have an existing business with a net worth of more than $75,000; have two years of finance-related experience; participate in an interview at the Department of Financial Institutions; submit to a criminal background check; provide a surety bond up to a maximum of $200,000; notify city police and county sheriff’s departments of their intent to open a pawnbroking business; undergo a third-party audit every year by the Department of Financial Institutions; and more.
Shop owners and employees also become adept at detecting behavior that may indicate an item brought in for pawn may not have been legitimate.
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