Consumer Perceptions of Pawn Shops
Over the course of history, pawn shops have been a respectable option for short-term loans. And in today’s volatile economic environment, they can be a saving grace to people who are in need of quick cash but have poor or no credit, no bank account, or no credit card. However, pawn shops are not immune to the effects of the economy, with stiff competition from businesses like payday loans and stringent government regulations. Most notably, they have ongoing image problems, much of which is attributed to how they are portrayed in the media and movies (e.g. Pulp Fiction). More recently, a highly successful reality television show set in a pawn shop has increased positive visibility for the industry and the National Pawnbrokers Association (NPA) is hoping to build off of that momentum by undertaking a new promotional campaign. The campaign would have two goals: to improve the image of pawn shops and to get more people to step foot into the stores. In late summer of 2010, the NPA sought the assistance of a Communication Research masters-level class at the University of St. Thomas in Minneapolis, MN. With help from the class, the NPA would benefit from the findings of multiple, small, qualitative research studies. The information collected could be useful to the NPA in developing messaging and positioning strategies for a national campaign. This report is a result of one of the qualitative research studies performed. The intent of our study was not to focus on existing pawn shop customers, but rather to gauge general awareness and opinions of pawn shops and their relevance in peoples’ lives. We were aware that our study sample would likely not reflect the average pawn shop customer. The question we had was whether our study sample would represent potential pawn shop customers. Our study focused on knowledge, experience and perceptions of pawn shops, as well as lending and shopping habits. In our analysis, we learned that people did not completely understand the services and value that pawn shops can offer. Additionally, people did not consider them as an option for short-term loans, either because they were not aware of the service or they were not considered convenientviewed as convenient. People did consider pawn shops as a retail shopping option for bargaining and getting good deals. As for general opinions, there was a lot of indifference. People do not seem to care to use them; however, they are not willing to disregard them. This presented a potential opportunity to increase awareness, address common misconceptions and change opinions. We concluded that the only way to do these is to close the education gap. Pawn shops need to better promote their services and find ways to educate consumers. Moreover, pawnbrokers should consider placing an increased emphasis on retail opportunities. As short-term loans are the primary driver of revenue for most shops, we also recommend that they continue providing this service and improve upon it if possible.
Our team expanded upon the charge provided by the National Pawnbrokers Association (NPA) and developed the following research problem: The negative perception of pawn shops are keeping consumers from using them for lending and/or retail. The purpose of our research project was that of understanding. We wanted to learn more about people’s habits, knowledge and experience with pawn shops and how that influences their perceptions.
We started our research with a preliminary literature review. We reviewed the NPA websites, participated in a conference call with NPA staff, and reviewed a previously completed study about pawn shop users. Up to this point, the NPA’s most reliable source for understanding pawn shop customers was a study done in 1998 by the Credit Research Center School of Business at Georgetown University. The study, called “Pawnbroking in the U.S.: A Profile of...
Please join StudyMode to read the full document