On East Street in Bedminster, there’s a cluster of pawn brokers offering quick loans to customers against the value of their personal goods in what’s often dubbed “the world’s second oldest profession”.
Despite the dubious reputation that these businesses may have, Jack Woodman of Jack’s Cash, one of the few independent pawn brokers in the area, prides himself on doing things a bit differently. He runs his business with transparency and competitive pricing, which means he is increasingly offering a lifeline for other business owners in the area during the cost of living crisis.
With inflation at a 40-year high, energy bills soaring, and wages stagnant, it’s unsurprising that demand for pawnbroking services is currently at record levels.
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H&T Group, which is the country’s largest pawnbroker with more than 250 stores across the UK, including one on East Street, recently recorded that demand for its pledge lending, where customers pawn goods, is the highest its ever been.
Jack says he first noticed a boom in demand for his shop's services during the pandemic when he was able to keep his shop open as it was classed as an essential service. Every day after banks closed at 2pm, he said a queue would start to form, as only two people were allowed to enter the shop at a time, keeping him and his staff busy until closing time at 5pm.
The most significant difference he’s experienced since the cost of the living crisis took hold has been not just the number but the variety of people who visit. Speaking to Bristol Live he said: “The biggest change is the different types of clientele.
“We've actually got other business owners in the Bedminster area who come to us. So, for example, a business might use jewellery [as collateral], buy stock with the money we issue them, sell the stock, make a profit and then buy their items back.
“We get all walks of life in here, and that’s very good; I find it really interesting; I like to hear the stories.
“A lot of people can think quite badly of pawn shops, but we're quite proud in the fact that when we don’t take advantage of people. We're affordable. I think that's probably why we've done so well.”
Jack assesses each person and item individually on a case-by-case basis, whether it’s someone looking for a little bit of extra spending money for their holiday or for loans ranging into the thousands to keep their business afloat. Typically the interest rate is around 10 per cent on a loan that can be available in as little as fifteen minutes, coming with considerably less risk than other alternatives available outside of traditional banking or to those with a poor credit rating.
One of these options is payday loans which can be up to a maximum of around £1,000, with interest paid at an APR (Annual Percentage Rate) of around 1,250% - 0.8% per day, according to MoneySupermarket.com. There are also doorstep lenders who visit customers' homes to collect payments, charging a similar interest rate or higher.
Like pawnbrokers and payday lenders, licensed doorstep lenders are regulated by the Financial Conduct Authority (FCA). But some operate illegally without a license from the FCA, meaning they don't keep paperwork, they might change rates and repayments, or use violence, threats and intimidation to enforce demands.
Jack said: “With us, it’s pay as you go, you’re not tied in, there are no hidden clauses, you’ve got a retail premise you can go back to. Whereas with a lot of these payday loans, you’re taking something out online, suddenly you’ve got the money in the bank and then a big bill every month, whereas here I think it’s a lot less seedy.”
The idea of charging higher rates isn’t something that makes much business sense to Jack anyway, as a lot of his trade is repeat custom from people who have had a good experience with him before. He said: “When you’re a business, it's better to make a smaller profit often than to rip someone off them once.”
If individuals do struggle to meet their payments, Jack described his approach as differing from some of the bigger buyback companies. He said: “We like to be a bit more lenient. You know, we're real people as well. Things do happen which is beyond your control.”
Jack estimates that around 75 per cent of people buy back their items but said before the cost of living went up, it was closer to 85 per cent. He said: “We give everyone what we call a 'grace'. And then there are some situations where people can then pay on a deposit scheme. We don't want people to lose their items.”
Jack’s been trading for seven years, and although he mainly deals with jewellery and watches, he also specialises in "prestige" items which can range from supercars, pawned by car dealers to finance their next purchase, to ultra-rare Pokémon cards. All this means that he and his staff of three, including his mom, have to have expertise in a wide range of subjects.
Stepping into his store, you are met with a warm and friendly welcome, and it feels more akin to visiting a jewellery shop than a pawnbroker; you can even get a watch strap and battery fitted for a very reasonable price. Jack says that customers travel from far afield to browse some of the unique items he has on display and that often, people looking to upgrade to a new piece of jewellery simply decide to trade in something they already own in part payment.
With each transaction, he draws on a wide range of skills, from dealing with figures to subtly questioning the item to gauge its authenticity. For Jack, transparency is key to his businesses, weighing out gold in front of the customer and making sure they understand the terms they're signing up for.
Whether they're looking for a loan or to simply sell their items, Jack said he always tells them to head down to the other shops on the street for a quote before making a decision. "Nine times out of ten," he said, "they come back."
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