There’s a shop that’s been on our high street for thousands of years. In fact, it’s one of the oldest professions in the world.
Pawnbroking is a business that’s constantly changing, even though the basic principle of secured lending has stayed the same across the centuries.
And in these modern times, pawnbrokers have evolved offering other services such as cashing cheques, unsecured loans, foreign exchange and money transfer.
H&T is leading the way with that change, making its stores open and bright and inviting to all customers.
H&T is the UK’s largest pawnbroker with a history dating to 1897, when the first store opened on Vauxhall Bridge Road, London.
Now the chain has three stores in the Portsmouth area – Kingston Road, Buckland, High Street, Cosham and West Street, Fareham.
Regional manager Mark Harrold gave me a behind-the-scenes glimpse of this historic profession at the Fareham store.
Mark has worked for H&T for the past 10 years, covering 85 stores in the south.
Mark, 37, explains, ‘Pawnbroking is typically done by people who have gold, whether that’s a gold ring, chain, wedding ring, diamond, watch, and they would come to one of our stores with an idea of how much money they need, and we would see if we could take the item as security for a loan.
‘Customers are entered into a contract of six months which they can pay back in instalments or they can pay the whole amount back at any time.
‘The average loan in the business is about £200, but on my patch I am aware of loans that we have done for over £100,000. What we did for one particular customer was give them their own drawer in the safe. We went to his house to verify his identity and that the jewellery belonged to him and was real gold.
‘That customer has now paid it all back. He was a business customer and used us to finance the refurbishment of his shop.
‘That’s probably the biggest one I’m aware of, but we would consider any size loan.’
So, what makes a pawnbroker different to a bank or credit company?
‘There’s no credit check,’ says Mark
‘That’s a pretty big selling point for us, the fact that we don’t do credit checks.
‘If you think about trying to get finance from a bank, especially in the current environment, customers are telling us they have to jump through hoops to get finance.
‘Through us, if they have an asset, we will lend them the money and they pay a reasonable interest but it means they don’t have to go through all the credit checks they do at the bank.’
The company takes the asset and then if the customer doesn’t pay back the full amount by the agreed deadline, it sells it at auction or in one of its 193 shops.
Mark says, ‘We have a duty of care as a pawnbroker, if the price we get is more than the price we have loaned the customer plus interest, we give the customer the difference.’
Meaning that H&T make money on the interest, not necessarily on selling people’s jewellery.
Mark says, ‘There is an element that does become forfeit, that’s for sure, and if it doesn’t sell at auction it becomes our property and at that point we will try and sell it through our window.
‘Although, we would very rarely send it back to the same store, as it could have sentimental value. You could be one of our customers, whose circumstances have changed, and can’t afford to get the jewellery back and then you have to see it all the time in the window. It’s not a very nice thing to do.’
With people tightening their belts and cutting back on spending because of the tough economic climate, you would expect to see a queue of people looking to cash in their unwanted jewellery, but Mark assures me it’s been a steady increase ever since he joined the company a decade ago.
‘As a business, people think that we should be successful given the state of the economy, however as a company we have been growing significantly through the years. In good times and bad, people always find themselves outside the usual banking environment.’
With more than one million people in the UK without a bank account, which makes the chances of getting credit slim, pawnbrokers are an attractive option for a short term loan.
H&T’s interest starts at two per cent per month and goes up on a sliding scale to 8.99 per cent. So if you were to borrow £100, the maximum interest would be £8.99 per month.
Although it works out more expensive than a credit card, most of the customers either cannot get credit, don’t want credit or just want a short-term loan.
It’s also cheaper than using a pay-day loans company.
Mark says: ‘The good thing about pawnbroking is, that if they can’t afford to pay the money back, then there’s no fall back. We don’t go back to the customer saying you owe us money and we are not sending bailiffs to their house.
‘People can be fearful of credit, that they have to pay it back. If they don’t, they could get a county court judgment against them.
‘People don’t borrow money with the thought that they are not going to be able to pay it back, but sometimes circumstances can change.’
With the rise of gold buying companies
‘It still amazes me with all the publicity around gold, that people don’t know they have some value stashed away in their jewellery box.
‘They don’t realise that you can even sell broken jewellery.
‘My mum always had broken earrings in her jewellery box, that kind of person doesn’t realise that they can still bring things like that to us and we will give them a fair price for it.’
The company has seen some unusual items pass through its door.
The Cosham store had a diamond worth £75,000, which the customer borrowed £10,000 against and paid back.
The shops have also seen a surge in high-value watches
The Fareham store has a limited edition Jacky Ickx Chopard watch. Only 1,000 were ever made, selling for £2,200.
Across the country, they have three limited edition Rolex watches, of which only 135 were ever made.
Mark says, ‘One of the most unusual things I have seen is a walking stick made of ivory, it’s been with us for years.
‘We didn’t lend the guy a huge amount of money because he just wanted to use us as a safety storage. He pays a nominal interest and then it’s safer with us than in his house with the potential of being burgled.
‘We put it in one of our big safes, again the costs associated with doing that at a bank would be phenomenal, with us he just pays a nominal rate.’