More people turn to pawn shops as inflation takes its toll
The incredibly high inflation and skyrocketing energy prices have more and more Netherlands residents turning to pawnshops to pay their bills. Dutch pawnshops are noticing more clients, and from higher and higher income groups, RTL Nieuws reports.
Pawning is surrendering property in exchange for money with the option of buying it back within a few weeks or months. That happens at an interest rate of about 4.5 percent per month, according to RTL. Those who don’t buy back their items in the set time forfeit them.
Pawnshop chain Used Products, with 53 branches in the Netherlands, told RTL that its pawned items in storage grew by 34 percent in the past six months. “We are the feelers for society. These are signals that we know are a harbinger of what everyone will recognize in six months to a year,” director Berthold Bakker said to the broadcaster.
Goudprijs BV, the parent company behind the dozens of Goudwisselkantoor branches, said the value of its stock has grown by 16 percent since January. Remarkable, according to director Johan de Ruiter, because pawnshops usually see a dip during the summer months. “People then get their holiday pay and usually don’t need extra money. This year there was hardly any dip, which is really a break in the trend.”
Pandhuis Den Haag, a municipal institution, saw the number of customers who pawned something increase from about 8,000 in the first half of last year to 12,000 in the same period this year. “People tell us that prices have risen, it is more difficult to pay your bill at the cash register, energy prices have skyrocketed,” financial assistance manager Jan van der Hulst said to the broadcaster.
All the pawn brokers RTL spoke to noticed that the customer type also seems to be changing. “We see not only the traditionally vulnerable income groups but also the dual earners and self-employed appearing more and more at our purchase counters,” Bakker of Used Products said. In 2019, the average transaction value at Used Rpducts was 90 euros. Now it’s 128 euros. According to Bakker, this is an indication that the clientele is changing. “The traditional target group of pawnshops hardly have expensive things, people who come now do.”
Arjan Vliegenthart, director of the budget institute Nibud, is not surprised that pawnshops are getting busier. His institute has repeatedly warned that more and more households are struggling to make ends meet. About a third of families are struggling financially, he said. “This is a very logical consequence of people falling short and getting creative in ways to get more financial resources.”
Nibud does not disapprove of pawning but does warn people to be careful of the interest costs. “We see that people only go to a pawnshop when they have their backs against the wall and have no other option to borrow elsewhere. It is also relatively expensive. For many people, this is an emergency measure.”