3-On Your Side: Online Pawn Shop
By Jim Donovan
PHILADELPHIA (CBS) -- They've been around for centuries, catering to people who need money fast. Long before there were banks and ATM machines, pawn shops were the answer. And as 3 On Your Side consumer reporter Jim Donovan finds, there is a new twist.
Pawn Stars, it's one of the hottest shows on cable TV.
Millions of viewers tune in each week to watch people strike a deal.
They're offered quick cash loans, using personal property as collateral.
Which got Damion Pugh thinking.
"Pawn Stars put the idea in my head," said Pugh.
When he needed to come up with some money fast, his Breitling watch was the answer.
"Maybe I should try a pawn shop and see what I can do with that," said Pugh.
But instead of going into a local shop Damion used Pawngo, a web based pawn shop.
"The more I read, the more and more it appealed to me," said Pugh.
"We're going to loan 50 to 75 percent of current market value. The high end watches really hold their value," said Pawngo CEO, Todd Hills.
"The price they gave me was very solid price," said Pugh.
First, you enter a description of your item online and Pawngo sends you a preliminary offer.
If you accept it, you print a fed ex label and send your items to Pawngo, which pays for the shipping and insurance.
That's important, since they're dealing with high value items.
"Our average loan is 2,000 dollars versus the brick and mortar average loan is about 200 dollars," said Hills.
Items are evaluated at their Denver headquarters and a formal offer is prepared. If you accept, the money is wired into your bank account.
In exchange for his watch Damion received a loan of $1125. At monthly interest rate of 6 percent.
"My payments are roughly 67 a month," said Pugh.
After 90 days he can repay the loan, and get his watch back.
Extend the loan for another 90 days.
Or let Pawngo, keep the watch and sell it.
"85 percent of the people who come to us to get a loan actually pay the asset, pay for the loan and get their asset back," said Hills.
That's Damion's plan.
"If I can get my watch back, I will get my watch back," said Pugh.
"It's safe it's secure, it's private," said Hills.
That exactly what chiropractor Alexis Ferguson was looking for when she was selling a ring.
"I tried Craig's list and it was a little scary, I didn't want to meet with strangers. I tried a brick and mortar pawn shop and they offered me an insultingly low amount for it and then I tried Pawngo and they gave me very fair offer," said Ferguson.
Pawngo offered her four times what local shops had offered her.
"I upgraded some equipment, I bought some gym equipment and I'm really happy with the results," said Ferguson.
Partially funded by the founders of Groupon, Pawngo has made over 2,000 loans since June. With jewelry and watches the top two items they receive on a regular basis.
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