ONLINE FOCUS: Your Pawn Shop is an Institution…
Esteban Hermann: …actually we have been around for 40 years…
Then you will probably have a good overview of how people act in times of crisis and will be able to quickly see when things get serious.
Hermann: I think so. The financial crisis at that time had a significant impact on our daily lives. And of course also Corona. But none of this can be compared to the current situation.
Pawn shop: “Unprecedented influx”
What are you observing?
Hermann: An unprecedented influx. Very recently the beginning of the year has also been added.
What do you mean?
Hermann: January and February are usually the most expensive months of the year, it has always been that way. All insurance policies expire at the beginning of the year and additional payments must be made…
We are used to more customers coming during this time. But this year is extreme. It is not surprising, after all, that there are huge price increases in various areas of life.
Rising CO2 prices have an impact on fuel and energy. And the tax exemption has recently disappeared in the restaurant sector. Two examples with notable consequences for the daily lives of many people. By the way, these days not only are more clients visiting us. A different group of people comes than the previous one.
Sarcastic: “I can be grateful to the government”
Namely?
Hermann: Well, the poorest of the poor have never been part of our customer base. If I want to lend something, I have to be in possession of assets. And the poor generally have nothing. What is new is that customers come much more from the middle of society than before.
They are people like you and me who say: “I can't pay the electricity bill anymore” or: “Gas has become so expensive that I can't do it any other way.” Unlike before, many freelancers also come.
Bankruptcies are increasing overall. “I would never have imagined having to go to a pawn shop”: this comment is also repeated more and more. This is something we didn't know before.
How do you feel when you hear something like that?
Hermann: Of course, you could sarcastically say: I can be grateful to the government. Business is good. But seriously, of course you're conflicted. The people who come to us are usually completely uneasy. That's not nice.
How do you react to uncertainty?
Hermann: As professional as possible. What is striking is that clients now often give explanations. Sometimes it almost seems as if the other person has a guilty conscience. According to the motto: “I can't help it that it turned out like this. The orders stay away.” Or: “I have tax debts…”
“Customers are not supplicants”
And what do you say then?
Hermann: We don't even get into things like that. Clients are not supplicants, that should be very clear. You know, over the years a certain sensitivity develops. The last thing you should sound like is arrogance. The most important thing is professional and friendly interaction.
Wouldn't comfort here and there be appropriate? People obviously want to go deaf and hear that it is not their “fault.”
Hermann: Convenience would certainly be wrong. That's just not our role, even if the other person has tears in their eyes…
…because it releases something to which he or she is very attached?
Hermann: Yes, exactly. In those moments we remain objective. Despair is often offset to some extent by something else.
Because?
Hermann: I'm not alone, this can happen to anyone; Anyone who comes to borrow something from us these days will see it immediately. People are queuing. Sometimes we serve ten clients at the same time. Because people increasingly come with multiple items, we face a big challenge. Where once there was a single watch, now it is the collection of watches.
It's probably relatively emotional when it comes to jewelry, isn't it?
Hermann: That's true, at least from time to time. A while ago a woman came to me who wanted to borrow a beautiful ring. She had received it as a gift for the birth of her son. She now needed money to pay for this child's school books.
“Sales have also become more difficult”
Excuse me if I ask again: Does something like this really not affect you personally?
Hermann: I think if that were the case, I wouldn't be able to do this job. Take as an example this man, a craftsman, who came some time ago. He had worked for an authority, that is, for the State. Apparently, the State is not necessarily the one that pays the fastest.
In any case, the craftsman had to borrow against the clocks in order to pay the debts to the tax office. In the end, the State owed him debts. This is, of course, a story to shake your head at.
But you know, once I start this… I have to put it bluntly and see for myself that the store is working. We must not forget: Selling has also become more difficult.
What do you mean exactly?
Hermann: Well, sales are nowhere near what they used to be. For example with watches: from Rolex to AP… Prices in general have fallen drastically and, of course, we notice it clearly: we have to sell adjusted to the price.
So the bottom line is that business isn't so good after all?
I can not complain. The pawn business is our most important business area. In general it can be said that around 90 percent of borrowed goods are returned.
What does that mean?
Hermann: People bring us their things and receive cash directly in their hands. The law stipulates a deposit period of three months. Customers pay interest and storage costs for storage in a secure area with safes. After three months and an additional one-month waiting period, the item can be recovered. As I said: in most cases this happens.
What good is all this if in the end nothing is sold?
Hermann: Temporary liquidity. You wouldn't believe how relieved many customers look when they leave the store with their money. Now let's move on, something like this.
A mother recently came and brought us her son's iPad. Being able to buy food, that's exactly what she said. She could have received about 300 or 400 euros for the device. But it was clear that she wanted to activate it again and that she would not be able to raise the 300 or 400 euros. Then they mortgaged the iPad for 200 euros.
“There are many signs that times are not getting better”
Did the mother recover the device?
Hermann: If she has. No big words. By the way, that's also typical. When customers return, they are simply happy. So we don't find out how the guy turned the corner.
We'll only know if it didn't work. For example, the woman with the ring she received when the child was born. She ended up being auctioned… I'm afraid it will happen more often in the future…
Do you think you see the current situation as more of a beginning?
Hermann: In fact, we expect long-term growth. There are many signs that times are not getting better. At least not for our clients…
You could call that sarcastic again.
Hermann: Maybe, but ultimately, that's our business. And you have to look at it this way: without us, people would be even worse off.
Our offer makes it possible for many people to obtain liquidity. In short, something like a postponement. I don't see anything indecent in the pawnshop business.