- April 5, 2013
Pawnshops: life placed in pawn
A loan secured against something valuable is a fast way to get some cash, and people are using it for ages. For some it is almost a “lifestyle”, whereas for others ― the way of survival.
There is one more week to get a pension. But the lonely pensioner purse is already empty today. A grey-haired woman wraps carefully her husband wedding ring into her handkerchief with a trembling hand; put it into her pocket and goes to the nearest pawnshop. There, the old lady will receive few notes with the Jonas Basanavičius image in exchange. The very day she will get her pension, the woman goes to the same pawnshop to buy the dear to her heart thing back. To get it back, so that she will hand it over to the pawnshop assistant temporarily again, she knows her very well, since she comes there every month practically.
― This is not an exceptional story ― says Rūta, working in Vilnius pawnshop at Žalgirio Street for 2 years. ― I have such pensioners as our customers quite often, trying to sort out their financial problems with the help of our service.
For many people – she adds – who have a small income, regular “visit” to the pawnshop is the way of survival if not a lifestyle. It is forced by the circumstances, though.
― People, especially elderly people, who come to place something valuable in pawn in my shop, explain often, why they do that. I heard many very sad stories about old parents forgotten by their children, bankruptcy, theft, illnesses, sudden deaths and other disasters― says Rūta. ― I listened to the people carefully at first, trying to comfort them, but very soon I got tired and got to understand that I have to keep the distance, be not so much taken by the tragic stories, otherwise I will go mad.
Apart from the pensioners there are students and businessmen very often visiting her pawnshop – she adds. The young people pawn jewelry, cell phones or cameras. It happens sometimes – says Rūta – that parents come to her and ask her not to take the things from their children.
― Yet, not every our pawnshop customer has got some serious financial problems. I meet businessmen quite often, for example. They need cash immediately, and they do not have it right now. They place their expensive smart phone or tablet, then. And they come back for it after few days usually – says Rūta, contradicting popular belief that regular visitors to the pawnshop are alcoholics, lacking a few bucks for the bottle. ― If an antisocial person comes I ask him/her to leave, simply.
She remarks that practically all pawnshop clients promise to come back and buy the pledged thing back. And it happens most of the time; only 30% people do not come back at all.
The pawnshop assistant says that it is hard to understand sometimes why people place the things in pawn, since they receive back only 50% of their market value. It would be more sensible to sell phone on internet, for example. The main reason is probably a need for instant cash, as selling on internet takes more time.
What do you have to do when placing something in pawn?
― It is obligatory to have your identity document with you to sign the pawn agreement ― says Rūta. ― It does not mean that the client is honest, though. I did have aggressive swindlers coming here with the stolen things and presenting their own passport, but it only made the police work more easy.
― If somebody places in pawn technical equipment, he needs a warranty to present; we do not take the old gadgets. I look up the present value of the things on internet. If it comes to jewelry, its authenticity is checked with the special reagents. I do not have to be a serious expert, because I do not take pieces of art or antiquarian stuff.
Items are placed in pawn for a definite time, depending on agreement. If the owner will not come back for his valuables, or will not extend his agreement, things may be sold. The pawn item is getting more expensive by 10% after 2 weeks, in Rūta’s pawnshop. Interest value of the deposited thing worth 100 LIT is 19% after a month. The more valuable thing, the lower is the interest.
The pawnshops services are some form of loan in a way. Interest is similar to the one given by fast credit companies. It would seem right to say that they are the big competitors to the pawnshops. But Rūta says that the situation is slightly different.
― We have many customers. Many people do not trust in the fast credit companies, especially elderly people. They prefer to meet face to face with the human being, instead of talking to the phone. They feel safer in the pawnshops, because they do usually know the person they are talking to – says the pawnshop assistant. ― There are quite some people as well, who come to us, because the companies do not want to give them a loan.
If there is no cash, people will pawn almost everything. Rūta admits that there were attempts to place in pawn quite strange objects, during her time.
― People were coming with the refrigerators, and other kitchen equipment, when I worked for a bigger pawnshop. Especially elderly people – quite often – tried to place the musical instruments, for ex. pianos – says Rūta. ― The old ladies bring their furs, and other clothes, even shoes, now. They feel very offended, when I do not want to take it. And I do not take it, because the clothes are not new, they come from Soviet era. Who is going to buy an old moth-eaten fur? And no one will take a new fur, because it is too expensive. If anybody can afford an expensive fur he/she will not look for it in the pawnshop…
Yet Marina, working in Vilnius pawnshop at the Kalvarijų Street, remembers, that such expensive, high quality furs, were regularly placed in pawn some time ago.
― The pawnshops were treated differently in the Soviet era. They are some kind of “banks for needy persons”, nowadays, since most of the clients are people having more or less serious financial problems. They live “from pension to pension”, or “from salary to salary” – explains Marina. ― Whereas several dozen years ago they were simply placing their valuables in deposit, paying some 15-20% off their values. People could afford it.
Knowing that the valuables will be kept well, women were placing their own furs in the pawnshops, for summer time, this way. As Marina says, well-off people were coming to pawnshops to pawn their valuables – for example – if they were planning long journey, and they were afraid to leave their valuables, such as jewelry or antiquarian things, at home.
― So they used to leave their high value stuff at our shop and they could go away for several weeks or months – says Marina.
That means that there were better times for the pawnshops during Soviet era, and business used to bring higher income, than after regaining freedom.
― Apparently we are free and live in democratic Europe. But if you judge by our clients, the new era has brought happiness not to everyone – says the woman. ― Folk coming to our shops were people with some dignity in the eyes, sometime ago. I can see mostly a shame today…
There are some clients, though, with no shame as well, the shame described by Marina. For some regular clients, visiting the pawnshops becomes their lifestyle. 32-year old Edward living abroad at present is a good example.
―We did have a big problem with our son. He was a jolly fellow drinking a lot together with his big, cheerful crowd. But he could not afford everything he wanted, since he did not like to work… – complains his 56-years old mother Olga. ― He started borrowing money from his friends, but he never gave it back. He lost their confidence and started not receiving the loans any more.
But this is not the end. Edward began to borrow money from fast credit companies – he was taking money from one of them to repay his loan to the other one.
― He came to the pawnshop at last. First time he placed his cell phone in pawn. The money finished quickly, and my son decided to get something bigger and more valuable from home – says Olga with sad face. ― His choice was the new computer bought for him by his parents for his birthday. He left the computer in the pawnshop for 100 LIT only! When we learnt about it we gave him money to buy his present back.
It seems that Edward treated the situation as a very good “business plan”, since he was placing the computer in pawn and got it out 7 times, each time with his parents’ money.
― I went to the pawnshop many times asking the assistant not to take my son’s valuables in. It worked only once – the third time, when I started to cry – recalls Olga. ― Edek did not want to understand how much pain he gives to me by doing so. I am his mother and can forgive him everything, his drinking, irresponsibility, debts. My husband though, demanded our son to move out. So he moved out, left the country.
Edward was not at home for last 7 years. He was talking to his mother time to time by phone at first; he got offended by his father and stopped talking to him. There are no phone calls, no e-mails for last 2 years, though. Olga knows how he is getting by abroad from common friends who live there as well. There is no good news. At the beginning Edward went to Ireland and found a job on site, but he lost it soon and got indebted to many people. He left for Great Britain, so that he did not have to pay his debts, and the whole scenario was repeated. As we know the man wants to come back to Lithuania. He can not do it though, since he would be imprisoned immediately – his debt for different quick credit companies exceeded 30 thousand LTL.
THE PAWNSHOP’S HISTORY
The pawnshop institution was born more than 3000 years ago in ancient China, where the short term security loans were given to the peasants. The services were offered in the specialized shops after some time. The pawnshops were very popular in the ancient Greece and Rome; they allowed the beginner traders to start their business. The Italian traders specialized in this business in England, they were known as Lombards. The King Edward III placed the crown jewels in 1388 year in pawn with the Lombards, to get funds for the war with France, and allegedly the Spain Queen Isabella I of Castile sponsored Christopher Columbus trip to the Indies by placing her jewelry in pawn.
The pawnshops spread to Germany, France, Netherlands and Poland within few centuries. They reached to Russia in the mid of XVIII century. The first pawnshop in Vilnius in Lithuania was open in the year 1889. The first one in Kaunas was open in XX century – 1924 year. In Klaipeda even later – in 1964 only.
Tłumaczenie Jadwiga Granowska w ramach praktyk w Europejskiej Fundacji Praw Człowieka, www.efhr.eu. Translated by Jadwiga Granowska within the framework of a traineeship programme of the European Foundation of Human Rights, www.efhr.eu.