How bad is the economy? Even pawnshops have not emerged unscathed from last year's recession.
"Business is getting slower and slower. That's because even badly cash-strapped, customers don't have many pawn-worthy valuables left," a pawnshop owner surnamed Chen told the Taipei Times yesterday.
PHOTO: CHEN CHENG-CHANG, TAIPEI TIMES
According to statistics from the Taipei Pawnshop Association, last year over 30 out of the city's 276 pawnshops were forced to shut down due to slow business.
After one month of preparation, Chen says he is set to launch a new breed of pawnshops in Taipei County -- 7-Eleven style, with broad aisles and brightly lit. He said that the shops would be spacious and feature customer-friendly counters and huge outdoor neon-light signboards to attract clients.
"To compete with banks, we'll emphasize quality service," he said, adding that he would start operating the franchise the moment the government gives him the license.
At another Taipei pawnshop, sitting behind an iron-barred counter, traditional pawnshop owner Lee Ren-chung (李仍中) said his business is also on the decline.
"The best business I've ever had was probably some 10 years ago [when the economy was good]. Whereas, with the stock market at a low point, customers can't afford to pay back loans," Lee said.
As he spoke, a client surnamed Chen came in to extend his three-month NT$7,000-loan contract on a gold necklace for another two months.
However, when it comes to small-denomination loans, Lee said he believes people still prefer to seek help from pawnshops because "it's convenient and cash is usually in hand within minutes, as long as the collateral value is agreed upon."
According to Lee, his client's gold necklace has an estimated market value of NT$10,000 and the loan costs the client 9.5 percent of the loan sum (NT$665) per month for "interest and storage charges."
If Chen fails to pay back the loan, the item will be forfeited to the pawnshop, which will re-sell it to potential buyers at a discount price.
Pawnshops will consider anything of value, but gold, diamond watches and jewelry remain the most popular collateral, Lee said.
The ability to accurately appraise the collateral's value is key to minimizing risk, he said.
"We once lost big time when some people put fake diamond watches up as collateral and disappeared with the loans," Lee said.
Always ready to throw his sales pitch, Lee said that pawnshops could be a good place to find bargains on used gold and jewelry. "The discount can sometimes be up to 50 percent off," he said.
As tough times trigger further belt-tightening, some people are desperate to sell anything they can for cash.
"Tea leaves, mobile phones, binoculars and professional cameras are things I've heard my colleagues say they have received as collateral," said the owner of Ching Cheng Pawnshop (
The middle-aged shop owner said that his shop specializes in the pawning of automobiles, offering clients 60 to 70 percent of their vehicles' actual worth.
"The auto pawn business is unstable. Sometimes, we may not get a single deal in a month, while, at other times, we may get more than we can handle. On average, the forfeiture rate is as high as 30 percent," the owner said in his sparse office -- free of iron bars -- with a half dozen cars parked in back.
When an owner can't pay up, the pawner simply cuts a deal with second-hand car dealers and sends the forfeited cars to them for re-sale.
Pawnshop dealers agreed that, when it comes to price, everything is negotiable and loans can be granted to any citizen over the age of 20 with an ID card.
Foreigners are required to show either a passport or an alien resident certificate.
A minimum 4-percent monthly interest rate and a storage fee are charged on all deals.
Three-month contracts are standard and are extendable indefinitely.
If the owner of the pawned item fails to pay back loans within five days after the three-month contract expires, the item is forfeited and becomes the legal property of the pawnshop.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his