Stewart Rowland has been in the pawnshop business for 22 years. He started working in a Ponders Corner pawnshop in Lakewood when he was just 16. He stayed there for 19 years, then bought his own shop, Pawnbrokers Northwest, just a few doors down on Pacific Highway.

Rowland has been in business long enough to have seen several ups and downs in the economic cycle.

There’s a common perception that pawnshops are one business that actually does better during economic downturns like this one. We talked to Rowland to see if that really is the case.

Everybody seems to think when the economy goes down, business at pawnshops goes up. Is that what happens?

I don’t believe so, no. It changes. But I wouldn’t say it goes up.

How does it change?

Your loans are going to increase, and your sales inventory is going to go up because people can’t afford to get their stuff back. And you’re also going to have people just selling stuff rather than pawning it.

That’s good for you, right? How is that different than saying business goes up?

The problem is, you have more inventory, and if people don’t have money, they aren’t buying. When the economy is bad, we have to lower prices in order to make sales.

Now that I think about it, I realize I don’t really know exactly how pawnshops work. Somebody brings something in, right, and you check it out and give them a cash loan based on what it’s worth. How do you decide how much cash they get?

Kind of a general rule is you’ll get about one-third of what an item would sell for used. That’s very general. It can go higher or lower.

And the money you give them is a loan that they pay interest on.

Right. And they have 90 days to come back and retrieve the item. Or they can pay the interest at the end of the 90 days, which extends the loan for 90 more.

And if they don’t pay back the loan, you keep the stuff and sell it. Do they usually come back and get it?

Yes. Definitely. Over 80 percent of people come back for their items. A majority of customers come back in five days or a week or two later.

For a lot of my customers, whether the economy is good or bad, they’re just not good money managers. The more they make, the more they spend. A lot of them live paycheck-to-paycheck, and we see them time after time.

What are some of the most common things they bring in?

I would say there’s no most common items. There’s such a wide range. We get a lot of electronics, jewelry, guns, DVDs, tools, music gear.

For what you give them for most of that stuff – one-third of the used value – it doesn’t seem like it would even be worth it to bring it in.

Ten dollars can put a little gas in your tank. That’s a big thing. People say, “I just need gas money.” I hear that 10 times a day, easy.

If you’re a paycheck-to-paycheck person, gas will be the last expense you think about after you’ve paid everything else – the electric bill and everything. You don’t buy gas until the end.

Do you ever think that maybe you’re taking advantage of these people?

Absolutely not. I think it’s just the opposite. If it weren’t for pawnshops, they’d have to sell their stuff. If they just get a loan, they can get their items back.

Yes, but they have to pay interest, too. What kind of rates do you charge?

That’s really complicated because it’s not a flat rate. There’s a whole page of formulas we use. It’s much, much cheaper than the payday loan places, I can tell you that.

We charge a very fair interest rate. It’s all state mandated. No matter what pawnshop you go to, you get the same rate.

I wouldn’t want to see the rates really go up. I think it should be fair. I don’t like to pay high interest rates, and I don’t want to see anybody else do it either.

If customers had to pay huge interest rates, they’re not going to feel good about the experience, and that’s not what I want.

Is this a good business to be in?

It’s like anything else. If you know what you’re doing, anything can be a good business. But this is a good area here. The military helps.

Why’s that?

Volume. You have, I don’t know, how many thousands of soldiers living on the base. It gives you a larger customer base.

Most of your customers are military, then?

No. Not most. Just as a flat guess, I’d say maybe 20 to 30 percent.

I think a lot of people think of pawnshops as being kind of seedy, dangerous places, where you get ripped off all the time and people are always bringing in stolen stuff.

Pawnshops have really gotten a bum rap over the years. We’re no different than any retail business. Most of the shops are family-owned. They’re just as straight, or straighter, as anyone. They’re just normal businessmen. I’ve been in a lot of pawnshops, and most of them are nice and clean. They might not be as clean as mine, but they’re pretty good. This is like any retail store. It’s just that it’s used stuff instead of new.

One of the biggest misconceptions of people who have never been to pawnshops, like you, who don’t know anything about them, is that we see a lot of stolen stuff.

It’s actually very rare. I think the last time they did a study, it was one-tenth of 1 percent. For example, in three years, I’ve had five items that have come up stolen. And they were from just three different people.

Everybody that pawns anything has to show proper ID, and everything they bring in gets reported to the Sheriff’s Department.

Everything? Really? What about that guy who just brought in those fishing rods? You’re not going to report them to the sheriff, are you?

Yes. Everything that comes in gets entered in the computer. At the end of the day we electronically report straight to the Sheriff’s Department where they check it against their list of stolen property.

People out there know that. They don’t bring stolen stuff here. They go to the swap meets or secondhand stores or their neighbor down the street.

You’ve been doing this for so long. Twenty-two years. What changes have you seen in the business in that time? And how would you compare this economic downturn to past ones?

I don’t think the business has changed much. Some of the items have changed. There are a lot more electronic gadgets now, that’s about it.

The only thing different might be that you could fill a tank up with gas for $20 then and you couldn’t now. If you were running a little low on gas before payday, you could come in for $20 to get you going for a while.

Now, instead of $20, you need $40.

Rob Carson: 253-597-8693

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