Pawn shops, cash advance businesses benefiting from sour economy

COLUMBUS -- Cash-strapped and with little relief in sight, some local consumers are trading in their goods and borrowing against future paychecks.

A local pawn shop and payday advance business have seen the impact the economic downfall has had on local wage earners.

Paycheck Advance, which lends money to customers who need a little extra to tide them over until pay day or an emergency pops up, has experienced a steady flow of customers.

“We haven’t seen decrease, and we haven’t seen an increase,” said Heather Schroder, customer service representative at Paycheck Advance, 2322 23rd St. “After the stimulus checks came out, we stayed even, and it gradually increased since then.”

Business has risen about 20-25 percent at Ski’s Pawn & Gun Inc., 3303 20th St. since summer when gas prices put the pedal to the mettle.

“That’s a pretty good (increase). Our loans have increased since gas went up this summer when people wanted to take vacations,” said Randy Bonczynski, owner of Ski’s.

He said most customers are taking out loans to help cover finances.

“They work like a bank, Bonczynski said, “except we do it on a smaller scale. It’s a 30-day loan.”

Schroder said customers are trying to keep up with the rising costs of everything from gas to groceries.

“Gas prices makes everything higher,” she said. “Nobody’s is paid anymore. They come to us for help.”

Schroder said the way Payday Advance works is customers get a cash advance with a fee of 17.5 percent and can borrow no more than $500, which includes the fee, and workout a payment schedule.

“People need that extra help now to make it to the next paycheck,” she said.

Bonczynski said customers are not to the point where they are selling off family heirlooms, but they need cash.

“Most people are trying to stretch their paychecks,” Bonczynski said.

What they are getting rid of are some of the luxury items they are finding they can do without, such as video games, guns, jewelry, TVs or power tools.

“People need to get by,” he said.

Bonczynski said about 70-80 percent of his customers redeem items for cash and then pick them up when they have the cash to do so.

“If they don’t pick them up, we resell it,” he said.

Bonczynski said it a sign of the times that people are doing what they can to get by.

“I’ve never seen anything like it where there has been such a strain,” he said. “We’re still seeing it. It’s going to continue. We’ve got a ways to go before it gets better.”