GIVE A WEDDING SPEACH

Pawn in the new SA

A few weeks back I was sitting chatting to some friends. While it may not be considered typical male conversation, we were talking about the weather. It had been very unseasonable all around the country.

“This weather is really strange,” one of my friends said. “It’s so bad that I just don’t know what items of clothes I should pawn.”

While he may have been making a joke it got me thinking to something another friend had remarked some time ago.

“You know Matt,” he had said to me. “You can always tell when an area is in decline by the number of second-hand shops that starting springing up in the neighborhood.”

I sensed that there could be a story here and I decided to poke around a bit. I trust that you will find what I discovered as interesting as I did.

The first thing I needed to do was establish if there was a difference between pawn shops and second-hand shops. There does seem to be a difference between the two. Pawn shops are businesses that loan money against an item of personal property that is used as collateral. The word pawn comes from pignus, the Latin word for pledge and the items pawned are referred to as pledges or pawns. Let’s look at an example of how a pawn shop would work.

Let’s say you have a gold wedding ring that you wish to pawn. The first thing the pawnbroker would do is evaluate the ring and then tell you how much he is willing to loan against it. He would also tell you how much interest you have to pay to get the ring back and within what time period you have to pay the money back. Let’s say he is prepared to loan you R300 at 25% interest and the ring must be reclaimed within three months. You then have up to three months to pay the pawnbroker R375. Do this and he will return the ring. If, however, you do not pay this money back within the stipulated time period the ring would now become the property of the pawnbroker. He will sell it to recoup his money.

I was amazed to learn just how old the pawn business is. Pawnbrokers were operating in China more than 3000 years ago. In the west pawnbrokers existed in the Ancient Greek and Roman Empires. In 1338 King Edward III of England pawned his jewels to raise money for his war against France. King Henry V did pretty much the same thing in 1415. It is also known that Queen Isabella of Spain pawned her jewels in order to raise the money to send Christopher Columbus on his expedition to find an alternative route to the Indies. Even more surprising was to discover that there was even a patron saint. Saint Nicholas is the patron saint of pawnbrokers.

The pawnbroker’s symbol has always been three spheres suspended from a bar. Some people joked that it stood for: “Two to one you don’t get your stuff back. The three sphere symbol is attributed to the Medici Family of Florence, Italy, owing to its symbolic meaning of Lombard. This refers to the Italian province of Lombardy, where pawn shop banking originated under the name of Lombard banking. The three golden spheres were originally the symbol which medieval Lombard merchants hung in front of their houses.

Second-hand shops operate on a slightly different basis. Instead of offering a loan on items of personal property they will buy it outright and then resell the item. It is safe to assume that second-hand shops originated from pawn shops. There are very few genuine pawn shops left in South Africa but a whole heap of second-hand shops. Some of the larger second-hand shops have become franchises and branches can be found around the country. Some of the larger second-hand shops also have what they call a ‘buy back’ option. This is similar to pawning the item whereas they will buy the item from you and you have the option to buy the item back, with interest of course, within 30 days.

With South Africa’s high unemployment rate and an economy that is shaky it is no wonder that more and more second-hand shops are opening. A friend of mine introduced me to 31-year-old Brian*, someone that has become a regular patron of second-hand shops. Although reluctant at first he was willing to share his story with me. It is a story that is all too common.

“After completing my degree I worked for an investment company,” Brian tells me. “When I was 24 I secured a bond and bought myself a two-bedroom flat. Everything was going pretty well until six months ago when I was retrenched. I wasn’t all that worried because I thought I would find work pretty quickly. I had no idea of just how many people were in a similar situation.”

For the past six months Brian has been unemployed. At first he used his saving to pay his bond and other monthly expenses. Within three months, however, his savings had been depleted. At first he would apply for any job that was advertised, but now he can no longer afford the petrol to drive to interviews.

“I started selling bits and pieces of my possessions to second-hand shops,” he says. “At first it was the luxury items such as my digital camera, video camera and DVD player. Then it was the hi-fi, television and eventually I started to sell off my furniture.”

When I spoke to Brian he had basically emptied his flat. His microwave, fridge, stove, lounge suite, dining room suite – it had all gone. Just a week before he had sold his bed.

“I’m sleeping on the floor now,” Brian says with a wry smile. “All I’ve got left in the flat is a pillow, a blanket, some clothes and the curtains. I’ve got nothing left to sell but my car. And I can’t sell my car because my bond hasn’t been paid for the last three months and I’m probably going to lose my flat. So I suppose I’ll end up living in my car.”

Brian would sell something to the second-hand shop and then use the money to buy food and electricity for the next few days. Like Brian, many people are battling to make ends meet and off loading personal property to a second-hand shop is often the only option they have. The second-hand shops know this and often take full advantage of the fact.

Frank* works as a buyer for a large second-hand dealer that has branches throughout South Africa. He was willing to speak to me on condition that I did not use his real name. What he told me was most disconcerting.

“We advertise a lot on television, radio and in the newspapers. Our advert tells people that they should bring in all their unwanted and unused goods to us and we will pay them cash for these items,” Frank says. “But we all know that about 99% of the people that bring in an item for sale are not selling it because it is unwanted or unused. They’re selling it because they’re desperate for money. And because they’re desperate we know we can offer them far less than the actual value of the item. Once we’ve bought the item we can then resell it at a much higher price. The mark up we add is normally high and never less than 200%.”

While there is nothing illegal about what they are doing, it does leave a bad taste in the mouth. It is almost as if most second-hand shops prey on a person’s desperation. Maybe their slogan should be “Your desperation – our opportunity.”

Hennie runs a second-hand shop in a suburb that has seen better times. He is an independent second-hand dealer and is not part of any franchise or chain. There are hundreds, if not thousands, or similar shops around the country. He was more than happy to speak to me.

“I’ve had my shop here for the past 15 years,” Hennie tells me. “Back then this was still a pretty decent neighbourhood. Since then it’s become a bit run down. When I first started my business here I would get maybe five to ten people a week come in and want to sell me something. Most of the stuff they sold back then was furniture. They would buy a new bed or lounge suite and then sell the old one. I would buy it, add a bit of a mark up and then resell it. For the last couple of years though it has gone mad. I easily have 50 to a 100 people a day come in here and try and sell me something.”

During the past few years Hennie has seen enough to write a book.

“I had a guy come in here that had been unemployed for four years,” Hennie tells me. “Then he finally got a job, but he had a huge problem. He couldn’t afford the petrol to drive to his new job. I open my shop at 7.00am from Monday to Saturday and every morning this guy would pull up outside and come running in. He must have had a really good quality tool set and every morning he would come in and sell me a spanner from this set. I would give him R10 for it and he would drive straight across the road and put in R10 petrol. This continued every day, Monday to Friday, until he received his first pay cheque.”

I asked Hennie what the strangest item was that someone had tried to sell.

“I had a guy come in her one day and try and sell me his false teeth,” Hennie said.

Hennie told me that business is so good that he cannot keep up because his shop is not big enough.

“If I had to buy everything that people wanted to sell I would have to have a warehouse to store the stuff. I’ve come very fussy about what I buy. If it’s not good quality I don’t buy it. Also if I have the slightest suspicion that it is stolen property I won’t touch it.”

This leads to another very touchy subject – stolen property. South Africa does not only have a high unemployment rate, it also has one of the highest crime rates in the world. No one can say with any certainty just how many houses are broken into each day because in most cases the police are reluctant to even open a docket unless it is for insurance purposes. What we can say for certain is that the number of daily housebreakings is scary. It is one thing for thieves to break into a house or car and steal anything that isn’t nailed down, but they have to get rid of the goods somewhere. All too often this is where second-hand dealers come in.

I’m not implying in the least that all second-hand dealers are dishonest and act as fences for stolen property. Many of them, however, are unscrupulous and have no hesitation in dealing with items that are or may be stolen. This is not a new problem, nor is it unique to South Africa. Many countries have had laws in place for centuries to counter this problem. In England King James I introduced an Act against Brokers that was aimed against pawnbrokers dealing with stolen property.

With the amount of stolen goods on the market, South Africa has continually had to update the laws that regulate the trade of second-hand goods. The latest law, Act 6 of 2009, the Second-hand Goods Act of 2009, was updated on 1 April 2009 and was put in place: “To regulate the business of dealers in second-hand goods and pawnbrokers, in order to combat trade in stolen goods; to promote ethical standards in the second-hand goods trade; and to provide for matters connected therewith.”

This act is 21 pages long and states the laws regulating the second-hand industry in South Africa. What it boils down to is that every second-hand dealer in the country has to be registered and must display a certificate from the South African Police Services (SAPS) stating that they are registered to trade as a second-hand dealer. I asked Hennie how this law works.

“Let’s say you bring a DVD player to me and want to sell it. The first thing I need is proof of your identity,” says Hennie. “I will make a photocopy of your identity book, passport or driver’s license. I then have to complete a second-hand register. This is an official document and I must record your name, address and contact details. I must also include a full list and description of everything I bought from you, including serial numbers where relevant. The police can come into my shop at any time and ask to check my register. Once I have bought the item from you there is a holding period, normally seven days, before I can resell the item. This is supposed to allow the police time to track down stolen items.”

I asked Hennie if this system really worked and he just shook his head and said nothing. In some countries second-hand shops must give a list of all newly-purchased items and their serial number to the police, to allow the police to determine if any of the items have been reported as stolen. This is not the case in South Africa, however.

To complete my story I decided to see how easy it was to sell second-hand goods and how the process worked. The first items I sold where two computer games. One of them was a budget game that retails in shops for R29.95. The other game was a recently released game that is very popular and currently retails for R399.95. I took both the games into a well-known second-hand franchise and said I wanted to sell them. The shop has two separate sections – one where you can buy goods and the other where you sell your stuff.

The buyer asked me how much I wanted for the games. I told him that I wanted R30 for the first game and R200 for the second game. I thought that the price I asked for the second game was more than fair. After all it was brand new and I was selling it for half the price that it was currently retailing for. I was offered R20 for each game. This seemed to be the amount they offered for any computer game.

I then decided to try my luck even further. Hennie had a number of second-hand car radios in his shop. It took some convincing but I finally got him to agree to lend me five car radios. I then dressed in some shabby clothes and went to a notorious area where there seemed to be a second-hand shop on each corner.

I went in to a total of six of these shops, offering the five car radios for sale. Now I may not be in the second-hand business and I must admit that I know very little about how it works. But even I would be suspicious if some guy dressed in shabby clothes walked into my shop and tried to sell me five car radios with wires hanging out the back of them. I may as well have put stickers on each radio saying; “recently stolen!”

Yet five of these six shops were prepared to buy the radios with no questions asked. The top offer I was given was R200 for all five radios. The lowest offer was R100 or R20 per radio. None of these five shops even asked if I had any form of identity. It was more than obvious that they were prepared to buy property that was more than likely stolen. One of the shops, to the guy’s credit, just told me to “get the hell  out of his shop.”

Are second-hand shops places where you can go and look for a bargain? Are they places where you can go and sell unwanted items and make a little cash? Or are the merely dealers in stolen property? At the end of the day I suppose they are a mixture of all three of the above. I am not sure whether they are a boon or a burden to society. One thing I do know, however, is that they are here to stay.

About the Author

Matt Tennyson has been a journalist and editor for the past 25 years. He is currently based in South Arica.

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