Will Pawn Shops Persist as a Back-to-School Shopping Destination?

When one thinks of the (now expanding) back-to-school shopping season, certain retailers and retail segments come to mind: Walmart, Amazon, Target, Dollar General; Department stores, dollar stores, warehouse clubs, and e-commerce outlets.

However, as CNN Business recently revealed, a seemingly unlikely back-to-school shopping destination is increasingly on consumers' radars: pawn shops.

The outlet's Vanessa Yurkevich noted that Americans seemed to be heading to pawn shops to save money on BTS purchases, with families expecting to lay out 2% less than last year on back-to-school buys, according to National Retail Federation data.

“With the way the economy is right now, people realize that they can go to a pawn shop anywhere in the United States, and they can save tremendous amounts of money,” Les Gold, owner of American Jewelry and Loan in New York City, said.

“People are struggling more, and that’s why more people are looking for better deals. They don’t have the money, and they still want their children to have a laptop," he added.

Pawn Shops Seeing Growth in Apparel and Electronics, Including Laptops, Signaling Back-to-School Spending on the Rise

According to data provided by EZPawn, a chain with nearly 500 locations spanning the U.S., merchandise sales ticked upward by about 4% last quarter.

More significantly, growth tied to increased sales in BTS categories such as boots, shoes, electronics, and laptops more specifically was in evidence.

One major factor which could be spurring sales and interest at pawn shops is a lack of tariffs, according to USA Pawn, which operates six locations in Mississippi.

“Tariffs are not a factor here at our company simply because our customers are the ones that supplies us with the merchandise,” said Renita Parker, a regional director for EZPawn.

Pawn Shop Business Could Be Signaling Economic Warning Signs

Coinciding with a notable swing in customers trading in their scrap gold — “We’ve seen a big jump probably in the last three weeks. I feel that they’re selling their jewelry and gold to buy school supplies,” said Nick Fulton, managing partner at USA Pawn — overall booming business at the nation's pawn shops could be an ill omen for the American economy as a whole, as Yurkevich underscored.

“You can’t imagine what’s going on in the economy right now unless you live in the pawn shop. Pawn shops help these people survive by either loaning them money on their merchandise, or selling them merchandise less than if they went anywhere else,” Gold said.

“In reality, the economy isn’t as good for my clientele, they’re struggling. We’re not talking about the people that are getting a paycheck once a week and they’re surviving. A lot of the people that we deal with don’t get a paycheck every week. They’re surviving day-to-day," he added.