Pawn shop business on the rise as inflation squeezes income
Pawn shops across Jamaica have seen an uptick in business over the past months, including Cashwiz, as more people look for ways to earn quick cash amid rising cost of living.
Rising inflation is partly what’s been fuelling Cashwiz’s decision to add at least three new stores across the island between now and mid-2023, one of which was open to the public just last week, making its second location in Kingston and sixth branch in Jamaica.
Regional Manager for Jamaica, Cargill Brown, told the Financial Gleaner that while the move was intended on capitalising on record sales numbers, its also a strategic one, aimed at providing greater convenience to its clients in the corporate area.
Cashwiz’s newest location is in Springs Plaza. It’s other Kingston branch is in Cross Roads.
By 2023, its aiming for a third Kingston store to be based downtown; and another in Montego Bay.
Brown has no worries about the new Kington store cannibalising the business of its existing Cross Road branch, noting that the company’s built up reputation of “trust” over the years, along with the increase need for quick cash in this period of high inflation is driving traffic not just for Cashwiz’s business, but for the industry.
The pawn market largely targets Jamaica’s unbanked and underbanked population, many of whom face difficulties in getting financing from traditional lending institutions. Over the years some Jamaicans have relied on pawn to meet short-term financial needs and as business within the industry grows, so too have the number of operators.
Online directory FindYello lists nine pawn shop operators in Jamaica.
“We were seeing record numbers as more customers became more confident in buying, selling or trading items with us and so to capitalize on that growth we wanted to expand. Our parent company Simple Management Group is also expanding so we believe its an opportune time for us to expand in Jamaica,” Brown said.
“Based on the nature of items that we take, we also felt it best for us to be closer to our customers,” he added.
Cashwiz largely trades new and pre-owned valuables including jewellery, electronics, household appliances, musical instruments, tools and motor vehicles. Many of those are considered fast-moving goods in the pawn business, but even Pawn Shack Outlet, a business which has for the most part steered clear of purchasing items such as phones, laptops and jewellery from customers for security reasons, is also seeing an uptick in business.
Pawn Shack Outlet, which operates a single location on Molynes Road, Kingston, mainly pawns furniture and household appliances. Manager Laurene Douglas said that over the company’s six years of operating, business was at the lowest point at the onset of the COVID-19 pandemic.
Pawn Shacks’ customer base is largely made up Jamaicans migrating to foreign lands who would sell their household items in exchange for cash to help with travel preparations. But when the travel economy closed in 2020, many of that business went with it.
“Since the economy reopened, business is bouncing back and at a faster rate because of the rising cost of living. We have many customers coming to sell us items, some of which uncommon items like a toilet seat just to get cash to buy food,” Douglas said.
“But the challenge that we are having is getting a buyer for some of those pawned goods. People don’t have the cash to purchase goods as they would like,” she added.
Pawn Shack Outlet, like Cashwiz, wants to expand its business, but for now doesn’t have enough cash to support its short to medium-term objectives.
Cashwiz, on the other hand, has the support of its parent Simply Management Group, and wants to grow to 15 stores by 2024. A budget for Cashwiz’s expansion plan was not disclosed.
Headquartered in Florida, Simple Management Group is the parent company of the Simple Pawn business which independently operates a chain of pawn shops in Central Florida. Its second subsidiary, Cashwiz, has a chain of non-traditional financial and retail stores spanning 10 Caribbean countries and 18 locations.
Cashwiz made its d?but in Jamaica in 2012, and opened its flagship store in Portmore, St Catherine, in 2017.