Editor’s note: This article originally appeared in the 2018 edition of the Best of Texoma magazine.
What is a wooden leg worth as security for a small loan? How about a pair of old hearses or a set of false teeth? Those are just three of the unusual items pawned at Texoma pawnshops over the years.
Lending money goes back as far as money goes back, but for centuries, in the Middle East, Asia and Europe, the practice was closely controlled by the religious institutions of the culture, which generally prohibited lending for interest. This prohibition, often skirted or ignored, gradually began to change as the practice of pledging personal items as collateral for small loans was accepted as a practical means of the poor to borrow in tight times.
In ancient Greece and later in Rome, the practice was allowed, but regulated by the state, and Roman law became the model for most modern European states. In Italy, the practice was sanction by the pope, and the business spread over the rest of Europe, although it was not until the 18th and 19th centuries that pawnshops became generally accepted, although often looked down upon, as part of the financial structure of most countries.
The business has “second class” status in the eyes of many people, but in fact, the modern pawn business is really just a small loan operation dealing in transactions secured by tangible assets. They offer people small loans that banks would not bother with, under conditions set by local and state authorities.
The basics of the business are generally understood. The client brings in an item, the pawn broker decides how much the item might bring if the customer defaults, and agrees to make the loan for a fixed period of time at a fixed interest rate. The customer can redeem the item at any time by paying off the loan and accrued interest, or he can extend the time available by paying in part. If no effort is made to redeem the item, the pawn broker takes ownership and puts the item up for sale in his shop. But there is more to the business than that.
Most pawnshops sell merchandise not associated with the loan business. Laura Raulston is a licensed pawn broker with J&S Pawn in Denison. In many ways, the pawn business is just a retail store with a twist. She explained how it works. “In addition to the unredeemed pawn items, we have a lot of new items for sale. We order them wholesale to maintain our inventory.” The most popular sellers at J&S are guns, tools, and musical instruments — particularly guitars — and many of those items are brand-new.
“We have a lot of regular customers who come back to pawn things again and again,” Raulston said. “They’ll redeem them, then when they need some cash, they come in and pawn them again.” The most Raulston will loan on something is $1,250.
Cindy Kuneman, the owner of F&I Pawn is a second generation pawn broker in the operation her parents, Forest and Innette Marr, started in 1972.
“My dad married a lady whose people were from Syria, and when her grandparents came to his country, they would loan money on shoes,” Kuneman said. “They would lend someone a quarter, and be paid back when the borrower got the money.”
These days there are not many people pawning their shoes, but if they had a pair of Air Jordans — well, you can see the possibilities. Back at F&I, Cindy Kuneman explained the system in a bit more detail.
“The customer has 60 days to redeem his item,” she said. “He can pay off the loan or make a payment. He can make a payment forever if he wants to.”
Kuneman said her customers default on only about 20 percent of the items they pawn, so much of the merchandise in the store comes from other sources.
“Many of the really nice items you’ll see in the store we buy from estate sales,” she said. “We also buy from auctions. When you buy something from us, it is nice clean merchandise that works well, and the public can buy it at a discount price so they don’t have to spend the money like it was new. My dad used to say the only difference between a new diamond and a used diamond is the price.”
Most of the items people bring in are not that unusual, a DVD, watch or a piece of jewelry, but every now and again the strange and odd item comes in. Kuneman was the pawn broker who took in the hearses mentioned at the top of the story.
“There was an older gentleman in town who owned a funeral home,” she recalled. “When he needed to borrow money, he would bring them to me — old Cadillac hearses — and we’d put them in storage and he would come back and get them. Well, he passed away, and I got the hearses. I put them on eBay and sold them to a guy from California.”
She will take almost anything of value.
“We’re here to make loans,” Kuneman said. “We help people who need a thousand bucks and can’t go to the bank. If you need money, it’s tough to borrow money, so those are the people we cater to.”
The decisions the broker makes as to value are usually delivered on the spot. There’s no waiting around.
“Generally we can figure the value of something, but if we can’t we have some experts we can call on to appraise things,” Kuneman said.
The folks at Best Pawn wanted to talk with us, but customers come first, and the day we called they were taking care of business, and that is the one of the ways shops such as J&S, F&I, and Best Pawn develop a strongly loyal customer base.
“A lot of my customers are valuable people who stay with me forever,” Cindy Kuneman said. “We do have a great relationship with our customers. They’ll come in and tell me if they’re sick or something bad is going on in their lives — they’re like family. People write to us, send us Christmas cards, think of us as family.”
And as in every family, there is usually somebody who needs a helping hand every so often.