68: State of Pawn with Tim Collier from the NPA

March 13, 2019

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Yigal Adato: 00:00 Hey Pawn family. Welcome back to another episode of the Pawn Leaders Podcast. No, I dunno if I should keep calling it a podcast or as everybody calls it the pawncast. So whenever you like podcasts or pawncast, welcome back to the show. So happy that you take time out of your day to listen to the show. Also really happy for those of you who joined me in the Pawn Leaders Podcast Community and ask questions and just kind of give me feedback about what type of guests you want on the show. Today I had an incredible day. It was week two in the masterclass and we’ve got some incredible pawn brokers in the masterclass learning tips about leadership, about marketing, and about strategy. And I’m helping them grow their business, grow their loan balance, you know, do everything that we talk about on the podcast, but even more, go more in depth and teach them everything I know that helped me grow the pawn shop that I owned with my brother. So today we talked about marketing, which is so important. I really believe that you need to be a marketer in order to grow your pawn shop. You can’t just call yourself a pawn broker. You have to study marketing, you have to master marketing in order to sell, you know, money in order to sell items, even in order to sell, you know your staff for you to be able to employ more people, you have to be able to market the fact that you’re a fun place to work and a great place to work. Now when it comes to marketing today, we talked in the masterclass about how important Google reviews are and for me, I’ve seen such success people using podium.com that’s why I mentioned them every single time on the podcast as well as our sponsor. But I wouldn’t sponsor, I wouldn’t allow somebody to sponsor the podcast if they use and really implement such incredible technology to help the pawn brokers. So podium is really my number one suggestion. If you want to grow your Google reviews, they also have a way for you to be able to chat with your clients through your website and for the listeners to the podcast, they give you a 10% discount on your monthly fee. Go to podium.com/pawnleaders once again, podium.com/pawnleaders and get off the fence. Give them a call, talk to them, sign up and see your Google reviews just increase exponentially. Now back to the guest, this week I have Tim Collier who’s the president of the National Pawnbrokers Association. Now, Tim has been on the podcast before, but I brought him on in order to talk to us kind of about the state of pawn and what the NPA is doing on a federal level, what’s going on with laws that are coming out and what they’re doing to protect the pawnbrokers. So here is my podcast with Tim Collier, the president of the National Pawnbrokers Association.


Yigal Adato: 02:47 Hey everyone, my name is Yigal Adato and this is the Pawn Leaders Podcast, a podcast that help you make more money, stress less, and live an epic life all while working at the pawn shop.


Yigal Adato: 03:05 Tim, welcome to the show.


Tim Collier: 03:07 Yigal, thanks for having me on. How are you doing?


Yigal Adato: 03:10 Very, very good. You know, I was looking at my notes and I went back to my website and you were actually episode seven that was released on February 12th, so exactly. I have two days ago. Last year we did the episode, so glad to have you back on. And basically I brought you back on to talk about kind of the state of pawn when it comes nationally because you’re the president obviously. So happy to have you on.


Tim Collier: 03:36 Thanks. I appreciate that. Yeah, a lot of things going on in the pawn industry we tend to follow and as everybody knows, income tax refund checks are starting to roll in. So, people are picking up their pawns and our loan balances are dropping gradually. I don’t know if you’ve seen that out in California yet or not, or heard of anybody that has, but we’ve seen a few trickle in an already. Basically we’re hoping that there’s an extended period of time this year of, of income tax refund checks. Last year was pretty sparse. It came and went very, very rapidly, but hopefully it’ll sustain itself a little bit longer this year. Everything I’ve read the checks are actually a little smaller about averaging about 8% less on a refund this year than what they had because consumers took more money home because of the tax code changes. So hopefully that doesn’t affect us greatly, but things aren’t looking real good for the economy right now. There’s a lot of publicity out there about the economy that’s not as rosy as what the forecasters are saying and not in tune with the low unemployment rate that we’re saying. So, that obviously affects pawns. So, but yeah, it’s interesting times especially in Washington DC where the government shut down and all that.


Yigal Adato: 05:16 So let’s talk about that. I mean, obviously I brought you on because you know what’s happening nationwide. You guys are at the forefront of, you know, fighting for the pawn brokers at the NPA and passing legislation. So what’s kind of happened in the last year on the national level, and let’s talk about what’s happening in 2019 with the plan is, so people out there could kind of hear from you what’s going on.


Tim Collier: 05:42 Sure. So as far as what happened last year, there really wasn’t a whole lot that did happen, there were still some instances of some bank discontinuance, which we always are looking at, and I’ll talk a little more about that in a second. But with it being an election year it was really, you know, kind of quiet, that’s gonna change. Obviously, whoever’s in the majority, party-wise they choose their leadership and with the Democrats taking over in the house, Maxine Waters is now chair woman of the House Financial Services Committee. So she has a very aggressive agenda that she’s looking at to roll back some of the things that president Trump and his appointees at the CFPB have laxed a little bit as far as military lending act enforcement and some things that affect pawnbrokers. So we fully anticipate that to become a challenge as we move forward. And it never fails to amaze me, we seem to get thrown under the bus by people all the time. I’m sitting here looking at an article that was in the American banker and the head of the Consumer Bankers Association talking about the government shutdown said, what are these families supposed to do to make ends meet despite the best efforts of our banks? The answer is awfully similar to what some furloughed federal employees were forced to do, turn to more expensive sources of cash, like payday and title lenders, online lenders and pawn shops. American families should be able to rely on their banks instead of being forced to resort to less regulated, more costly lenders. Every time we turn around, we’re having to fight the establishment so to speak because they don’t understand that, you know, it’s a non-recourse transaction and these are things that these people have to do. They can’t go to the bank. They don’t have an option.


Yigal Adato: 08:00 Yeah. The bank’s not gonna lend them $50.


Tim Collier: 08:03 No, that’s not gonna happen. So, um, unfortunately we battle that all the time. So anyway, it has been fairly quiet leading up, but again, we anticipate that that’s going to change. We fully feel that as time moves forward, particularly next election cycle, it would not surprise me one bit if the Democrats took back over majority control of the Senate and possibly even the White House, which means all of the things that have been laxed during the Trump administration with the CFPB and military lending act and all those things will possibly be ramped back up again. So, we’ve got to keep our eye on that, but I was talking about the economy and it not looking as good as and as rosy as what some people had forecast. I read a story in the Washington Post earlier this week that even though unemployment is sitting at 4%, there’s over 7 million Americans who are 90 days or more behind on their car payment.


Yigal Adato: 09:09 I saw that.


Tim Collier: 09:09 Yeah. And I mean that car payment is typically the first payment that people make because they’ve got to have their car to be able to get back and forth to work. So if that many people are behind on their car payment, can you imagine the title loan lenders and how close they are to repossessing literally millions and millions of cars. So, would that be in the case I see the economy probably you know, taken a little bit more of a downturn as we moved through the year. And so I think that could affect pawn drastically to where you find more and more people coming in that haven’t had to use your services in the past.


Yigal Adato: 09:58 Yeah. And I think the most important thing, the most important thing for people to remember is even though they might be thinking, you know, yes, I’m going to do more business is to serve that customer so well that they walk out and they praise pawn shops as opposed to somebody writing an article like you just read a statement from.


Tim Collier: 10:16 Absolutely. Absolutely. It’s the key is service and you know that, I know that. We have people that write reviews on our Facebook page and on our website talking about how we’ve helped them in a time of need and how gracious we were and how we made it painless for them to have to come in. Because you’ve got to realize when somebody has to come into a pawn shop and bring a valuable that they have in and get an advancement of money they don’t feel good about that. I mean they have to do that. They’re put in a position where they’ve got to come in. So the pawnbrokers got to be cognizant of that so that they make them feel just as comfortable as they can and not worry about the Almighty dollar on the tail end, but taking care of the customer on the front end because that’s what it’s all about. If you take care of a customer, they may not need the money in the future as rapidly or as readily. But they may take advantage of your services because they want to go on a trip. And if you make it comfortable for them to do that, then they might use your services as opposed to going to a bank when they could go to a bank just because they know it’s going to be a quick turnaround time and it’s less hassle to do it that way.


Yigal Adato: 11:38 Yeah. And I think for me, almost every successful pawn shop that I’ve been in, the mission statement has something to do with community and as opposed to just let’s make more money, you know, and I think that’s what’s important about the NPA. Like it’s coming together as a community to help what’s going on in our industry. Like you talked about in 2019 the troubles that we might face with the Democrats coming in and tightening the belts some more. So kind of walk us through a little bit more, Tim what else is on the horizon for the NPA or anything like big that’s happening. A big push that is really important for people to join and even donate some money. You know, the biggest thing I have issues with is when somebody says, oh, it’s so expensive. No, it’s more expensive is if somebody passes a law, cutting out your interest, that’s more expensive.


Tim Collier: 12:33 Absolutely. Absolutely. And of course, one of the staples of the NPA as far as our participation at the national level is the legislative conference that we host in Washington, D.C. each year that’s coming up, the end of April, 1st of May, a two day conference. We fly in one day and have a meet and greet reception and then have a debriefing that morning with our lobbyist in Washington, D.C. and all of your appointments are scheduled for you, in advance so you can visit with members of Congress, both in the house and in the Senate from your particular, state and district. And we give you talking points, go over those. So you’re real familiar with them. And we just tell our story, I’ve been going for many, many years, even before I was on the board. And, you know, it’s all about telling the story and nobody can tell our story like a pawnbroker, you know what we see from a day to day basis, on the front lines of people needing money. And so you can explain to these people in Washington, D.C. who most have never set foot in a pawn shop, let alone know how it works. They might think they do because they’ve seen Pawn Stars of course, you know, I always liked to tell when I ask somebody in an office in Washington, do you know anything about the pawn business? Oh, yeah. I have seen Pawn Stars, well I’ll take that as a no, because that’s not the pawn business. And then we go into our spiel and explain to them that it’s a short term non-recourse transaction and we actually hold merchandise for the consumer for 30 days and allow them the opportunity to get it back. So if they need to borrow money in the future, they’ve got that collateral to be able to use again. So that’s coming up and one reason that’s so important, and this is something else that just transpired in the last few days. There was a, I don’t know if you saw this or not, but the merger announcement between BB&T and Sun Trust Bank. So there was a actual press release issue back in 2014 that was from Sun Trust. And this was when some of the first bank discontinuance came about. And it basically said that consistent with our loan standing industry practices, we always review our relationships in the range of business and risk considerations we have to look at. We’ve decided to discontinue relationships with three types of businesses, payday lenders, dedicated check cashers and pawn shops due to compliance requirements of our bank. And that was straight from the press release of Sun Trust. Now that they’ve just announced and it should be finalized by the end of the year that BB&T is going to merge with Sun Trust. That’s exactly when we see more of these bank discontinuances take place because the BB&T customers that pawnbrokers do business with BB&T are going to start getting these letters because Sun Trust is going to adapt their policy in with the BB&T customers. So unfortunately that’s something that’s on the horizon and that’s why we have to keep working with the folks in Washington with both the Senate Banking Committee and with house financial services to make sure they understand that we’re legally licensed businesses that are regulated heavily at the state and the federal government level. And that, you know, we do not put people in a debt trap that’s hard to get out of like some of the other types of small dollar lending do. And we’re actually a positive alternative for them as opposed to a negative alternative.


Yigal Adato: 16:40 So, you know, when you talk about that in Washington the first thing that comes up for me is connections. When I was at Cashco Pawn I was the president of the [Incomprehensible] support, excuse me, the business association. And I would meet with government officials and walk them into my store and every time they walked in they’d just be like, wow, like this, you know, we have a beautiful pawn shop and they just be like surprised and have no idea. And when they saw that we’re small business and that we’re employing their constituents and that their constituents are walking in by the droves, their eyes open wide. And I always,


Tim Collier: 17:19 Absolutely.


Yigal Adato: 17:19 Yeah, I always think that like, you know, successful people have some of their success because of connections. So if you’re sitting in your pawn shop today and you haven’t met with your council member, you haven’t met with your mayor, you have no connections, start reaching out. You know, it’s really, really important for somebody to start reaching out and making a connection, a relationship of some sort so that person could walk in and see what type of business you have and know that you’re serving the community as opposed to giving them a high, expensive cash like the banker wrote that article that you read.


Tim Collier: 17:53 Absolutely. And the key there is, if you haven’t done anything along those lines in the past, it’s not too late by starting now and starting at the grassroots level, at the local level with city councilman and things of that nature. These are the people who are the young and up and comers, the people that are going to work their way up the leadership ladder. I mentioned earlier that Maxine Waters was now chairman of the House Financial Services Committee since the Democrats took over the majority in the house. And Maxine Waters started out as a council woman in California. And so I know through Kappa and the folks I know out in California that they have relationships with her from the past when she was at the state legislature. So, we’re going to try to utilize those to the best of our abilities to remind her about how we as pawnbrokers helped her back when she was an up and comer back in the day. And then to again tell our story, but there’s nothing more powerful than inviting someone that’s either already in office or running for office to come by your pawn shop see your operation, meet you, meet your employees, see the type of business that you run. It opens a lot of eyes because they just really don’t get a chance to do that very often. And they’ll learn a lot from you just by being there.


Yigal Adato: 19:21 I have a question for you, Tim. You might help others when they’re talking to their government officials, a lot of times I feel that when we’re giving the [Incomprehensible] we’re talking and they ask interest rate, let’s say, and obviously some states charge 20%, 25%, and all of a sudden the government officials like, Whoa, that’s, you know, 200% a year, 250% a year, whatever that is. But then I’m watching shark tank and you know, the five sharks are sitting there and they always ask the same question. They say, what’s your margin? What’s your margin? And, you know, somebody will say, well, I have a 280% margin. They’re like, okay, that’s a great business. I want to invest in. Nobody ever gets angry at that. Nobody ever says that the restaurant that you go that’s charging you $50 for a steak, has a 400% margin, let’s go in and put a law or do something about that. How can a pawnbroker when talking to the government official answer that question when it comes to interest?


Tim Collier: 20:26 So it’s a great point. I like to reference other things that are similar to what you’ve talked about, one of which is, like you mentioned, but along the lines of spending the night when you’re out of town, you don’t go to a holiday inn and stay for three months and pay $99 a night for three months for a 250 square foot room. It wouldn’t cost even in New York City that much or that small of an apartment. But because you’re staying overnight or maybe two nights on business and they’re providing that service and they’re doing the laundry and cleaning the room after you’re gone, they can fetch that kind of price, well pawn is really no different just because the federal government regulates us through Tila to disclose our rights on an annual basis, 90 something percent of our customers don’t leave their things in pawn for a year. So it’s ridiculous that we were ever brought under Tila rates anyway. So you have to explain to them in layman’s terms, and I’ve done this with lobbyists too, I’ve often mentioned, so let me ask you this, tell me you want to borrow 50 bucks? Okay. I want to borrow 50 bucks from you, Mr Lobbyist. Loan me $50 out of your pocket and I’m gonna pay you back in two weeks. What do you think is a fair rate for me to pay you for you loaning me $50 out of your pocket? Five bucks? Five bucks that’d be fair. $55. So that’s $5 in two weeks. That’s 10%. That’s 20% a month. You’ve just quoted me 240% a year, and I’m only loaning you 50 bucks for two weeks. I know, the government is looking at just the opposite. They’re looking at the 240%. So, you have to speak in general terms about how the pawn business is a 30 day transaction or a two weekend transaction even in a lot of circumstances. And one thing we do with my business, if somebody comes in and says, you know, I see that your rate is 15% for 30 days. If I get it out sooner than that, would it be less? And I’ll tell them, you know, we charge a minimum of 30 days because it covers our expenses up front, but if you get it out in a week or 10 days, I’ll discount that down to 10% for you. And it gives them an incentive to try to get back that much quicker and try to get it out. So, that’s something else as a side note that you can sometimes do, especially with first time customers to make them feel that you’re really trying to help them out of a jam.


Yigal Adato: 23:18 Awesome. So for those of you listening who aren’t NPA members, I think it’s prudent for you to give a call and just ask questions and see what’s happening to become a member. It’s the national organization. Obviously they’re fighting for the benefit of you. You might agree with some stuff, you might disagree with some stuff and that’s okay too, but you can’t just get offended. I feel like people get offended for everything these days, but you know, have a conversation call, go to pawn expo, meet other pawnbrokers. Some of the stuff I’ve learned what made us successful was by going to the events like pawn expo. So, super important.


Tim Collier: 23:59 Absolutely. Absolutely.


Yigal Adato: 24:00 Yeah. I want to segue into when we talk about expo, let’s talk about Dixie.


Tim Collier: 24:04 Sure, sure. Well before we get to Dixie real quick, I just want to mention that we were talking about the upcoming alleged conference coming that’s coming up the end of April, 1st of May. So I encourage people to try to do that. And then also I want to point out from a do’s standpoint, 75% of the do’s structure for the National Pawnbrokers Association is exclusively earmarked or legislative at lobbying efforts. So it cannot be spend on anything else. So 75% of your money that you spend to join the National Pawnbrokers Association goes directly to our efforts in Washington, D.C. as well as in state association work that we do across the country. So, keep that in mind when you’re looking at that number and you think it’s a high number. Just know that 3/4 of that is going right to speak on your behalf with legislators across the country. And now Dixie, yes, we’ve got the Dixie Pawnbroker Convention coming up, trade show and educational conference. It’s a Friday, Saturday, Sunday, March 22nd, 23rd and 24th. We will be at Orange Beach, Alabama down on the Gulf coast. At Perdido key resort or Perdido beach resort. We start out on Friday with a little sneak preview of the exhibit hall and Trade Show floor that evening and then we’re going to have a Luau outside on the beach that Friday night. And then Saturday, we have Less and Seth Gold coming in and there are keynote speakers from Hardcore Pawn [Incomprehensible] in Detroit. And then we have Jerry Whitehead doing a presentation for us in the afternoon on Saturday. And then Sunday, actually your brother Morris and Jim Littman coming in from Jaggy, and they’re going to be sharing with us the benefits of the appraisal services that they offer to pawnbrokers to help market your merchandise. And then we finish up with Brad [Incomprehensible] on Sunday afternoon. And then we’ll also be giving a legislative update as well as breaking out per state meetings. So, we’ve actually contracted for the next two years after this year with the Perdido resort. So we’ll be down on orange beach for the next three years counting march of this year. So we hope to, maybe draw some pawnbrokers from the Florida and Georgia area that don’t have an affiliation with a particular trade show right now. So maybe they’ll take advantage of having the one fairly close by, even though they’re not part of the four state Dixie region. So we’re excited and matter of fact I heard from a fellow pawn broker here in California, let’s fly down for the Dixie show. So we’ve got folks that flying from all over the country. It’s a great learning experience, a great chance to visit with pawnbrokers from across the country and across the south and learn some things while you’re there. And then also you’ve got the trade show for two days, so you’ll have all of the exhibitors and vendors, although it’s on a smaller scale than what you see it at Pawn Expo we’ll still have 40 plus of booth set up for vendors of all different types. And we’re excited we’ve got some new vendors this year that we haven’t had before. So we’re excited about that.


Yigal Adato: 27:39 Awesome. I was there last year and it was great. I’ll be there this year. It’s funny actually the Pawn Leaders Mastermind, the group I think like 95% of them are flying out to the Dixie convention. So we’re going to have a Pawn Leaders night together that way they just want to learn more, meet other pawnbrokers, connect because this is family, that’s why I call it the pawn family. It doesn’t matter if you’re in the Dixie region, if you’re in the Midwest region, if you’re in California, Florida, if we unite as a family to be able to help the industry then everybody wins,


Tim Collier: 28:14 you bet. You Bet. And just as a side note, I had no idea that, uh, uh, you were bringing a bunch of folks with you, so be sure and tell anybody you talk to they better get on the phone and book the hotel rooms because room block is shrinking drastically. We have very few rooms left in the room block and I want to see you have to pay either a higher rate or have to go to another property and not be right there on premises where it’s really, really convenient and easy to take advantage of.


Yigal Adato: 28:41 Yeah. So to register for the show, just go to dixieconvention.com. I think it’s one of the best URLs. It’s super easy. Very, very cool. And if you want more information, I believe Tim’s in the Facebook group. Go to facebook.com and just search Pawn Leaders Podcast Community. Also, if you’re interested in becoming an NPA member, reach out to Tim, reach out to the NPA, ask your questions. Make sure that you get, you know, you gain knowledge before you just assume something. And that way you can become a part of the national family as well as your state association. Great. Tim, thank you so much for being on.


Tim Collier: 29:21 Oh, Yigal thank you for having me. I appreciate it. Always a good time to visit you and I’m happy to come on [Incomprehensible].


Yigal Adato: 29:27 Then maybe it’ll be February of 2020 so.


Tim Collier: 29:30 Maybe [Incomprehensible].


Yigal Adato: 29:31 Yeah. Hopefully, hopefully thank you so much Tim. Take care.


Tim Collier: 29:34 Thank you.


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Yigal Adato

Yigal is a 3rd generation pawn broker, and is now a mentor, coach and educator with the pawnbroking industry.

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